He has all the employees work extra hours and finally order gets shipped late that night. But this achievement results in increased costs and further delays of other orders.
The next morning, Alex rushes to attend a meeting at headquarters. In route to the meeting, Alex runs into Nathan Selwin in the elevator. Nathan explains why Peach has been on edge. During the meeting, Peach explains the divisions poor performance and hands out new stretch goals for the next quarter. Alex recalls running into Jonah, his old physics professor, at the airport.
Alex is impressed with how well Jonah seems to understand his situation. With no prior knowledge, Jonah accurately predicts high inventories and missed shipping deadlines.
Their conversation is cut short as Jonah needs to leave for his flight. Jonah leaves Alex with a question. Anything that brings him closer to that goal is productive.
Any other activity is non-productive! They discuss how they could go about achieving the goal of making money and the new targets. Alex runs the numbers, the new targets seems almost impossible.
Their conversation goes late, and Alex finds himself in trouble with Julie again. Returning home from work late, Alex is surprised to be greeted by his daughter Sharon.
After tucking Sharon into bed, Alex returns to thinking about his work situation. He realizes that he might need more guidance from Jonah. At work the next morning, Alex tries to call to apologize to Peach about missing his meeting the previous day.
Unable to connect, Alex decides to try Jonah instead. Throughput is the rate at which the system generates money through sales. Inventory is all the money that the system has invested in purchasing things which it intends to sell. Operational expense is all the money the system spends in order to turn inventory into throughput. The head of UniCo arrives for a photo shoot with the factory robots.
This causes Alex to reflect on the viability of the robots. Alex pulls together Lou — the head accountant, Stacy — the inventory control person, and Bob — the production manager to discuss the robots. During the discussion, they discover that the robots increased operating expenses but did NOT reduce any costs.
Not even direct labor. The costs were merely shifted to other parts of the plant. Since operating costs stayed the same and throughput did not increase, the profits of the plant actually decreased as a result of adding the robots! Alex and his team Bob, Lou and Stacey reviewed the meaning of throughput T , inventory I and operating expense OE until they reached agreement and understanding.
Lou, summarized. Throughput is money coming in. Inventory is the money currently inside the system. And operational expense is the money we have to pay out to make throughput happen. Bob was suspicious that everything could be accounted for with just 3 measurements. So Lou explained that tooling, machinery, and the building are all just various forms of inventory. But they were not clear on how what they could do that would not lower the plant efficiency.
So, it was clear that another call to Jonah was in order. To catch up Jonah, Alex needed to take a trip to New York. Jonah listens, then assures Alex that the problems they discussed could be resolved before the deadline.
First, Jonah advises Alex to stop focusing on the robots. And to forget about chasing efficiencies. After all,. Of course, Jonah needs to leave. But he gives Alex another clue. Returning home, Alex argues with his wife about not answering her phone calls. At this point their marriage is very strained. Alex promises to set aside some time for her and his family over the weekend. On Saturday morning, Alex awakes surprised to find his son Dave dressed and ready for the hike he had promised.
During the hike, the troop keeps getting separated and spread out in distance. This helps Alex to discover the true meaning of dependent events as related to statistical fluctuations. A manufacturing plant and a single file hike through the mountains are a good analogy. Thinking about the similarity helps Alex understand the difficulty of making up being on the downside of fluctuations following dependent events. The last event would need to make up the difference of all the down fluctuations to average things out.
To understand this effect more fully, Alex creates a dice game and instructs the Boy Scouts on how to play. The game makes it clear that a balanced plant with statistical fluctuations and dependent events will experience throughput decreasing and inventory going up. This means that Jonah was correct that a balanced plant is not the answer.
The next day, the troop resumes the hike. This time, with new understanding, Alex asks the slowest kid named Herbie to lead. In addition, he distributes some of the weight that Herbie was holding in his backpack. Julie is missing on Sunday evening when they return home from the camping trip. Julie left a note for Alex. In the note, Julie explains her frustration about Alex spending all his time at the office and has again broken his promise to spend time with her.
After several calls to friends and acquaintances, Alex is unable to locate Julie anywhere. He is able to prove his point by completing a large, overdue order using these principles. The starts to buy-in and even the skeptical production supervisor agrees. So now, Alex ponders … now what? The team is beginning to trust Alex and appears ready to proceed. But Alex is unsure about what to do next. Time to reach out to Jonah again.
A bottleneck is any resource whose capacity is equal to or less than the demand placed upon it. A non-bottleneck is any resource whose capacity is greater than the demand placed on it. Jonah continues to explain that Alex should NOT make the mistake of balancing capacity with demand.
Instead, Jonah explained he must balance the flow of product through the plant. Now Alex and his team need to find their bottleneck. They identify the NCX machine and heat treatment. Jonah visits the UniCo plant in person. He shares that every plant should have a bottleneck, and that a system can only increase output by increasing output at the bottleneck. Alex wonders what he needs to do to increase the capacity of the plant? A number of questions were asked and answered.
What is the cost when the bottlenecks NCX and heat treatment machines go down? How much does it cost when the whole plant stops? And, how many working hours are there in a typical month? About hours. He explains that the output of the constraint is the output of the entire plant.
A minute of down-time at the constraint translates into a minute of lost output and throughput for the entire plant! Work for the constraint is prioritized so they work on the most overdue orders down to the least. While this plan is being executed, Alex discovers Julie has been staying with her parents.
When they next talk, he tries to convince her to come home. She declines, insisting that she needs more time. The UniCo team creates a detailed plan to ensure the bottlenecks are fully utilized.
In doing so, they discover that they need to be clear about the priority sequence at non-bottlenecks as well. Red and green tags are used to map priorities visually. Red tags are for bottleneck parts and should be worked on first. Green tags are for non-bottleneck parts which are second in priority. In an attempt to make up with Julie, Alex asks her out for Saturday. Julie accepts and Alex manages to keep the date. Back at the plant on Monday Alex is excited to hear that their changes are working.
They managed to ship twelve overdue orders! Alex is happy with the progress but needs more. So he asks for suggestions from his management team. The production manager, Bob finds and refurbishes an old machine that was in storage that can do NCX work. With this machine in place, things are finally improving.
New problems surface at the bottlenecks and disrupt production. There is no work for some people while waiting for the bottleneck to finish its batch, so those workers were moved to other departments between batches to keep busy. However, when work was ready for the bottleneck no one was there to do it.
To eliminate this situation, Alex dedicates that there should be one foreman at each bottleneck at all times. Alex and Julie are getting along better. The sudden increase in performance has the team excited. After a short celebration, Stacey dropped Alex home. Alex arrives to find Julie waiting up for him.
Julie becomes suspicious that Alex is cheating on her and again leaves. Now that the new priority system is in effect, the flow of work has increased considerably, while reducing inventory. All the efforts to increase the output at the bottleneck have work so well that the bottlenecks appear to have shifted. Jonah finds this intriguing and decides to make another visit. With those parts being produced on lower priority, lead to the experienced shortages at final assembly.
Jonah and the rest of the UniCo team, which includes Ralph from data processing, predict which products needed to be completed when and schedule their release accordingly. Please login or sign up to comment. Learn what value stream mapping is, when and how to use it, and how to conduct your own value stream analysis. Find out what the 5 Whys are, when and how to use them, and get your free template to get started. Toggle navigation GoSkills. Search for courses or lessons Search.
See resources. See certification. Resources Looking for help with Microsoft Office? Resources Deepen your understanding of popular LSS tools and techniques, and simplify complex LSS concepts with our thorough how-to guides and resources.
Certification Lean Six Sigma certification can fast track your career and boost your pay packet. Resources From accounting software tips, to taxes and financial modelling techniques, our resource center has free guides to help you gain the finance knowledge you are looking for. Resources Explore our resource center to find templates to help you get the job done, job interview tips, insights to tackle your biggest project management challenges, and so much more.
Certification It pays to be certified in project management. Resources Having difficulties adjusting to remote work? Resources We want to help you succeed! Resources Check out our resource center to find answers to common coding questions, interview tips, and step-by-step guides that will help you in your development career. Resources Check out our resource guides to learn more about the graphic design tools that will help you to achieve your design dreams.
Resources From Python to Excel, or Power BI, Tableau and beyond, check out these free resources to help take your data analysis skills to the next level. Want to learn more about the Lean Six Sigma methodology? Enter your email address. Loved this? Subscribe, and join , others. Get our latest content before everyone else. Unsubscribe whenever. Your email address. Joseph Mapue Joseph Mapue wears his writer's hat wherever he goes, crafting top-notch content on business, technology, creativity, and innovation.
Any time lost on the constraint is output lost by the entire system. An hour lost on the constraint is an hour lost for the output of the entire system. Increasing output at the constraint, increases overall output. The constraint is called a drum because it sets the pace for the operation like a drum sets the pace for solders marching.
The rate of output is equal to the output of the constraint. This concept was illustrated in The Goal with boy scouts going on a hike. The slowest hiker, Herbie, set the pace.
In The Race also by Goldratt , it was illustrated with solders marching to the beat of the drum. Improving non-constraints has no effect on overall output. This is why measuring utilization everywhere makes no sense. We see a moving constraint most often in situations where shops have balanced capacity, meaning that the amount of capacity needed at each resource is close to exactly what is needed.
The capacity everywhere is balanced to the demand. The Theory of Constraints diagram above would show balanced capacity if all circles had the capacity at In job shops and machine shops that have changing mix, this balancing of capacity has the detrimental effect of lowering output. The exact opposite of what it was supposed to do.
It is a common misconception that you should constantly be eliminating your constraint. This would be an unending, ever changing process. For example, the Drum Buffer Rope policies procedures and measure would need to adjust each time your constraint moved. How do you leverage or maximize the output of an ever moving and changing target? It would be difficult. It would be far better to be strategic about the placement of your drum.
And for it to be a business decision if the drum moved. After all, the drum dictates the output of your entire organization. Where should you strategically place your constraint? Where do you want it to be? Non-constraints by definition have excess capacity. Excess implies that it should be eliminated. Which resources are easier to hire, less expensive to buy?
The answer to those questions will give you an idea of which resources you want to be non-constraints. So that means that you would want to strategically place your constraint at the resource that is hardest or most expensive to get more of.
Often this resource is the essence of what you do. More on that below. We control this amount of work with the rope. By having a buffer of work in front of the constraint, we can ensure the constraint does not run out of work. In traditional Drum Buffer Rope there are 2 buffers — one for the constraint and a shipping buffer.
The one before the constraints is there to protect the constraint and the shipping buffer protects the due date. Simplified Drum Buffer Rope just has a shipping buffer. The market is considered to be the constraint and the drum is set to meet all the due dates, so the shipping buffer is buffering the due dates. Any buffers are divided into 3 zones — red, yellow, green. To determine if you need more or less, you would look at your buffer statistics. If you never go into the red, you have more protective capacity than you need.
In the picture above the first buffer is buffering the Drum or constraint from resources A and B. So that buffer will help you with sizing resources A and B. The second buffer is buffering the Due Date. The reason we do that is because job estimates are just that, estimates.
0コメント