Archive for the ‘General’ Category
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26
Jul
2010
Theory of Constraints Golden Nugget
#10 MTA + MTO Mixed environment
In many companies, some SKUs are consumed on a regular basis, whether by one or multiple clients, while other SKUs have a sporadic consumption pattern, either because the demand is rare, or because the SKU is customized for a particular order of the client. In these environments, regular consumption should be supplied immediately from stock (MTA), while sporadically consumed SKUs (as well as exceptionally big orders of regular SKUs1) should be made only to clients’ orders (MTO); in other words, they should operate as a partly MTA, partly MTO environment.
The mechanisms to control both the MTA and the MTO in a mixed environment are the same mechanisms used in an environment of pure MTA or pure MTO. The only difference is that when using load control for providing promised due-dates and for determining the time to release the material for MTO, we regard only the MTO production segment instead of taking into consideration the total capacity and load. More explicitly, the way to allocate the capacity in such mixed environments is as follows: first assign capacity for MTA based on the current coverage; then add 20% protective capacity (Note: The needed protective capacity is not 20% of the total capacity, but only 20% of the capacity required by MTA). The capacity remains is allocated for MTO.
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20
Jul
2010
5
May
2010
Theory of Constraints Golden Nugget
#8 – When you say “red”, what do you mean?
(Production)
When we are told that a production company has 20% red orders, what does that mean? Seemingly the answer is clear – it means that if we go to the floor, we will see that 20% of the orders are red. But then again, maybe it means something else – that out of all the completed orders, 20% were finished while being red?
Here we have a situation where one term is being used to describe two different things. This ambiguity wouldn’t be a real problem if the practical implications, stemming from the two different interpretations, where the same. But this is definitely not the case; one of the above meanings of “red” is very important in terms of assessing the state of the operation, while the other has no practical implications and using it leads only to confusion.
In order to clarify the above statement, we ought to better understand the meaning of each definition. The first definition of red percentage is a description of a snapshot – the situation on the floor at a certain moment: how many orders from each color do the production workers see? Figure 1.a schematically shows a distribution of orders’ color on the floor at a specific point of time, under the assumption of a constant stream of incoming orders. The X axis is not a time axis, but rather represents the “age” of an order at the point of time when the snapshot was taken… Click here to continue reading.
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12
Mar
2010
Theory of Constraints Golden Nugget
#6 – Fine tune of the priority system – an exception
(MTO; Production)
The effectiveness of the priority system stems from the fact that it is robust yet simple; only three priority colors, with a strict instruction not to try being super- accurate and pin point which among the same-colored orders should be processed first. That being said, there is one exception – a unique case where refinement of the priority system is very much needed.
The case we refer to relates to situations where there are product families with considerably different production buffers. In such a situation, a product with a relatively long production buffer might have, at some work-centers, touch time which is indeed negligible relative to its own production buffer (< 10%), but is significant in comparison to another, shorter production buffer (> 1/6). Figure 1 schematically demonstrates the described situation… Click here to continue reading.
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25
Feb
2010
Supply Chain article – Golden Rules
Companies need to start using common sense to survive, says business thinker Dr Eli Goldratt. Rebecca Ellinor distils his words of wisdom.
Are we really in troubled times? No, we’re just panicking, says Dr Eliyahu Goldratt. The worldrenowned business management consultant and author of The Goal, which was recently included in The 100 Best Business Books of All Time, has always challenged people to think differently. In The Goal, written 25 years ago when he was a physicist, Dr Goldratt outlined his ‘theory of constraints’, with the premise that the rate of goal achievement is limited by at least one constraining process. He argued that only by increasing fl ow through the constraint can overall throughput be improved.
Originally directed at the manufacturing industry, its central messages hold true today. He now helps organisations to apply his advice, considered so broadly applicable that when he visited the UK this spring the 130-strong audience at his seminar included child psychologists, buyers and senior managers from the public and private sectors…Click here to continue reading
23
Feb
2010
Theory of Constraints Golden Nugget
#5 – Assessing super rapid time at an early stage
(RRR)
To fully enroll the Rapid Response (RR) offer, without taking a risk of deteriorating Reliability, it is required to shrink the production buffer to less than one quarter of the industry lead time. Reaching that stage takes substantial time. Much before that stage – when load control is implemented – the lead time is shorter than half the industry lead time. Since the financial benefits of getting even a fraction of the orders in RR prices are so significant, the S&T tree recommends to start offering RR on a limited volume (less than ten percent of the capacity) immediately after load-control is put in place. We know that the company can safely offer lead times which are half the industry lead time as rapid service, but what can the company offer, at that early stage, as super-rapid service?…Click here to continue reading
25
Nov
2009
Clarke Ching’s Interview
Yesterday, Clarke Ching posted the interview he made about Isn’t It Obvious?
Here is what Clarke Ching writes:
From: Clarke Ching
Date: 24-Nov-09 10:21 AMI’ve just spent the last hour chatting with the Ultimate TOC Thinker … Eli Goldratt about his latest book, which is out now. [I have a copy sitting beside me and it is very, very good.]
http://www.tocthinkers.com/2009/11/isnt-it-obvious-interview-with-eli-goldratt-mp3.html
In the 60 minute interview Eli talks about the books title (it’s kinda obvious why he chose the title when you hear his reason), the three obvious lessons from the book and the three less obvious, but more important, reasons. You’ll also hear about his next book, which he’s currently writing … and the four after that. You’ll hear about the writing process and, I’ll bet, you’ll have reread The Choice and The Haystack Syndrome by the end of the year.
I hope you enjoy the interview and please share.