Constraints Management
Intro to the Theory of Constraints (A lecture introducing a portion of the Physical side of the Theory of Constraints) James R. Holt, Ph.D., PE Associate Professor Engineering Management
[email protected] http://www.cea.wsu.edu/engrmgt/
© Washington State Universit
1
The Goal by Eliyahu Goldratt • The goal of a manufacturing company?
Mae money!
The Goal by Eliyahu Goldratt • The goal of a manufacturing company?
Mae money!
Measuring the goal • "et profit • Cash • #eturn on In$estment (#%I) &or a manufacturing enterprise' the goal can also be measured by • Throughput • In$entory • %perating epenses
efinitions
Throughput* The rate at +hich the system Throughput* generates money through sales, • "ote that the money is generated through sales and not production because if you produce something and don-t sell it' you ha$e not really had throughput, (.ou-$e /ust put it into in$entory),
In$entory* All the money that the system has In$entory* in$ested in purchasing things +hich it intends to sell, %perational Epense* Epense* All the money the system spends in order to turn in$entory into throughput,
"ote that all the definitions ha$e 0money1 in them
Throughput* The rate at +hich the system generates money through sales, In$entory* All the money that the system has in$ested in purchasing things +hich it intends to sell, %perational Epense* All the money the system spends in order to turn in$entory into throughput,
efinition • 2ottlenec* Any resource +hose capacity is e3ual to or less than the demand placed upon it, • %ptimi4ation of a plant* 2alance flo+' not capacity,
efinition • Types of elapsed time*
5etup time 6 The time a part spends +aiting for a resource' +hile the resource is preparing itself to +or on the part, Process time 6 The amount of time the part spends being modified into a ne+' more $aluable form, 7ueue time 6 The time the part spends in line for a resource +hile the resource is busy +oring something else ahead of it, 8ait time 6 The time the part +aits' not for a resource' but for another part so that they can be assembled together,
The Theory of Constraints (T%C) • T%C I5*
A set of Pro$en 5olutions • rum 2uffer #ope (2#)' Critical Chain Pro/ect Management (CCPM)' #eplenishment' 5ales9Mareting' :uman 2eha$ior' Measurements' 5trategy
An Approach to Problems • &i$e 5teps of Continuous Impro$ement
Tools for isco$ery of "e+ 5olutions • 8hat to Change' 8hat to Change to' :o+ to Cause the Change (The Thining Process Tools)
Process Theory Input
Larger Process
Input
Input
Process
Output
Process
Input
Process Output
Output
Output
Input
Process Output
5ystems Concepts • %rgani4ations 9 5ystems eist for a purpose • That purpose is better achie$ed by cooperation of multiple' independent elements lined together
• Each Inter;lined e$ent depends in some detail upon the other lins,
• The system o+ner determines purpose
There is a 08eaest
$ariation and changing +orload mae it impossible to balance e$erything, • %ne element of the system is more limited than another, • 8hen the +hole system is dependent upon the cooperation of all elements' the +eaest lin determines the strength of the chain, • An eactly balanced chain (system) is stronger than a non;homogeneous chain' but +hen close to the breaing point' all lins must be managed
$%%
Interconnections are non;Tri$ial • E$ery 5ystem has relati$ely fe+ constraints
To operate at maimum efficiency' the generic problem +ith physical systems must be identified The &i$e &ocusing 5teps help identify and impro$e the constraint (called The Generic Physical 5olution)
• Physical and "on;Physical Processes
&lo+ system structures* straight line (I)' assembly (A)' one material di$ided into se$eral products (=)' a product gi$en minor changes at the end (T)
istribution and 5upply Chain
Management control of these systems
&lo+ 5ystem 5tructures #M
&G
Ra& Material
Aircraft assembly is more of an 0A1 Plant
&G
'inishe( )oo(s
#M #M
#M
#M #M
#M #M #M
Interconnections are "on;Tri$ial • • •
A simple chain o$er;simplifies reality
may ha$e a relationship +ith
> @ B D F
Management of the and @ can get together and lean on
> @ B D F
There are B' first order effects and >''H second and higher order effects!
Traditional Approach* i$ide and Con3uer • i$ision of
Left
Right
8e Measure %perational Efficiency • 8or flo+s from left to right through processes +ith capacity sho+n,
Process
A
2
C
E
FG
RM Capability Parts per ay
Market Request 11
D
F
Too Much %$ertime Chronic Complainer Ecellent Efficiency;;"ear >
#e+ard 2ased on Efficiency • 8or flo+s from left to right, Process
A
2
C
E
FG
RM Capability P9
D
F
2oth found +ays to loo busy and appear to ha$e a capacity of parts9day .
In reality,,, • Processes A and 2 +on-t produce more than Process C for long,
Process
A
2
C
E
FG
RM Potential P9
D
F
#eality
Then =ariability 5ets In • Processing times are /ust A=E#AGE Estimates
Process
A
2
C
E
FG
RM #eality
J@
J@
J@
J@
J@
8hat-s an A$erage? • :alf the time there are or more per day at each process;;:alf the time less Process
A
2
C
E
FG
RM #eality Probability T+o at a time* %$er all*
J@ , ,@
J@ ,
J@ ,
J@ ,
J@ ,
,@ Chance of per day
Pre*io+s ol+tion- n*entor/ • P+t a (a/ of in*entor/ at each 0rocess1 8IP Process A
2
C
Total @
E
FG
RM
=ariable Process
J@
J@
J@
J@
J@
5ystem =ariability Taes %$er;; Chaos In$entory (8IP) 3uicly shifts position, In$entory manager9epediter tries to smooth it out, istribution problems result, Costs go up, Process 8IP
A
2
C >
E B
Total @
FG
RM =ariable Process
J@
J@
J@
J@
J@
5ystem =ariability Taes %$er;; Chaos An A$erage of means sometimes and some times D Process 8IP
A
2
C >
E B
Total @
FG
RM =ariable
J@
J@
J@
J@
J@
Process 5hifting +or;in;process creates large 3ueues at some locations, This maes +or +ait longer to be processed,
5ystem =ariability Taes %$er;; Chaos Process 8IP
A
2
C >
E B
Total @
RM
=ariable J@ J@ J@ J@ J@ Process 5hifting +or;in;process creates large 3ueues at some locations, This maes +or +ait longer to be processed, %ther +orstations can be star$ed for +or, The +or they could be doing is delayed because it is not there, They can-t tae ad$antage of their etra capability, 5o,,,
FG
5ystem =ariability Taes %$er;; Chaos Process 8IP
A
2
C >
E B
Total @
RM
=ariable J@ J@ J@ J@ J@ Process 5oK Management :elps! Management puts in more +or (In$entory) to gi$e e$eryone something to do! #esult* It taes longer and longer from time of release until final shipping, More and more delay!
L FG
Attempts to Control 8IP • P+t a li( on itse anan Car(sJ6 8IP Process A
2
C
Total @
E
RM =ariable J@ J@ J@ J@ J@ Process ust;In;Time uses Nanban Cards to limit the 3ueues building in the system, "o more than parts are allo+ed at any station,
FG
Effects of In$entory
2
C
Total @
E
FG
RM =ariable Process
J@
9efore anan
H9;@ A$erage O
J@
J@ After anan
J@
J@
Can:t e;cee( 5
H9;@ A$erage O ,
Operation’s Dilemma
Produce a lot
Increase +or;in; process
Manage production effecti$ely Costs deli$ery in control
ecrease +or;in; process
In/ection* Put a large in$entory +here its needed and lo+ e$ery+here else!
Ass+m0tion7e can:t oth increase 7P an( (ecrease 7P at the same time.
T%C 5teps to Continuous Impro$ement 5tep , Identify the Goal of the 5ystem9%rgani4ation 5tep , Establish a +ay to measure progress to Goal
5tep >, Identify the system-s constraint, 5tep @, Exploit the system-s constraint, 5tep , Subordinate e$erything else to the abo$e decision, 5tep B, Elevate the system-s constraint, 5tep , If a constraint is broen (that is' relie$ed or impro$ed)' go bac to 5tep >, 2ut don-t allo+ inertia to become a constraint,
'i*e te0s A00lie( to 'lo& <0erations >@
8IP
A
2
Total C
E
#M
&G
D
F
L , === D
&i$e &ocusing 5teps 5tep >, Identify the Constraint (The rum) 5tep @, Eploit the Constraint (2uffer the rum) 5tep , 5ubordinate E$erything Else (#ope) 5tep B, Ele$ate the Constraint (Q?) 5tep , If the Constraint Mo$es' 5tart %$er
>@
n(erstan(ing 9+ffers 8IP
Total >@parts9parts per dayO@, ays
A
2
C
E
&G
#M
D
F
• The 02uffer1 is Time! • In general' the buffer is the total time from +or release
until the +or arri$es at the constraint, • Contents of the buffer ebb and flo+ +ithin the buffer • If different items spend different time at the constraint' then number of items in the buffer changes • but Time in the buffer remains constant ,
8e need more than one 2uffer
Ra& Material 9+ffer
A
B
C
D
E
'inishe( )oo(s 9+ffer
FG
RM
7
9
!
"
There is $ariability in the Constraint, To protect our deli$ery to our customer +e need a finished goods buffer, There is $ariability in our suppliers, 8e need to protect oursel$es from unreliable deli$ery,
2uffer Time is Constant; Predictable Ra& Material 9+ffer
A
B
C
D
E
'inishe( )oo(s 9+ffer
FG
RM Ra& Material 9+ffer 2 Da/s
7
9
Constraint 2uffer @, ays
!
"
&inished Goods 2uffer > ay
Processing
9+ffer Management Constraint 2uffer 8IP
A
Total >@9O@, ays
2
C
E
#M
&G
D 8%@> 8%@ 8%>F 8%>
F 8%>D 8%> 8%> 8%>B
8%> 8%>@ 8%>> 8%>
2.5 Da/s
Time until 5cheduled at Constraint
%
• The Constraint is scheduled $ery carefully • 2uffer Managed by location • Indi$idual acti$ities in the buffer are not scheduled
Problem Identification R M
A
2
C
E
#M 7<$# Dela/e( Parts
&G
D
F
7<2$ 7<$! 7<2% 7<$ 8%>F 7<$5 7<$" 8%>B 2.5 Da/s
Constraint sche(+le is in eo0ar(/1 >Re( Bone Hole? Re(
7<$3 7<$2 8%>>
7atch 7<$4 >@ello&?
7<$% %
6ime +ntil che(+le( at Constraint
7<$# < >)reen? )reen
Additional 2uffers • Constraint 2uffer (as +e discussed)
Protects the Constraint from running out of +or
• &inished Goods 2uffer
Protects customer deli$ery from Constraint $ariation
• #a+ Material 2uffer
Protects the #elease of material from suppliers
• Assembly 2uffer
&acilitates speedy flo+ of products
Additional 2uffers
B#ffer $%pes& Constraint FG RM Assem'l%
#opes 7P
Constraint Finishe) goo)s A
B
C
D
E
RM
FG 7
9
F
G
(
!
7
"
!
"
RM Ra* Material
Assem'l%
Manufacturing is an integrating discipline &inance T%C Capital Pro/ects Thining Rncertainty Processes In$estment Physical Measures 5ystems 2eha$ior Pro/ects People &ull Theory %rgani4ations 5cheduling Performance Manage Measurement 7uality Assignments esign for 7uality Eperiments
%perations %ptimi4ation 5imulation ecisions #eliability 5upply Chain 5trategy Corporate epartmental 5ubordination &ocus
