Optimized Production Technology

Some production planning and control system focus on bottlenecks.

Bottlenecks are operations, machines that impede production because they have less capacity than upstream or downstream stages.

At bottlenecks operations, batches of product arrive faster than they can be completed

A bottleneck is defined as any resource whose capacity is less than the demand place upon it.

It is a constraints within a system that limits throughput

A bottleneck may be a machine, scarce or highly skilled labor or a specialized labor or a specialized tool

A non bottleneck is any resource whose capacity is greater than the demand place on it

A capacity constrained resource (CCR) is one whose utilization is close to capacity and can be a bottleneck if not scheduled carefully

• Increase capacity of constraint• Ensure that well trained people are

available to prevent constrain• Developing alternative routing,

processing procedure• Moving inspection to a position just

before the bottleneck. This restricts entry of defectives into bottleneck

• Scheduling less work at work centers supplying bottlenecks

TOC is that body of knowledge that deals with anything that limits an organization’s ability to achieve it goals

• Dr. Goldratt around 1980, founded that manufacturer were not doing good job in scheduling and in controlling their resource and inventory

• To solve this problem Goldratt developed a software that scheduled jobs through manufacturing processes taking into account limited facilities, machines, personnel, tools, material and any other constraint that would affect a firm’s ability to adhere to schedule

That is why sometimes OPT also called

Theory of Constraints To understand principles behind

OPT Goldratt described 9 principles based on production scheduling which are as follows

Do not balance capacity balance the flow

Each work center in a mfg. operation is subjected to different random occurrences for ex machine breakdown, raw material availability etc. This will lead to delay. Efforts should be made to create a smooth flow of material through the system for downstream market

• Use of nonbottleneck is determined by other constraints in the system

bottleneck non bottleneckCapacity = 100 unit/hr capacity=

200unit/hrOutput = 100 units/hr output =

100 unit/hr

1 2

Utilization and full employment of a resource are not same

NB B B NB

Capacity of box 4 is 250 units/hr however, it can only be utilized at the rate of 150 units/hr because of box 3. note that box 2 is bottleneck to box 1. but box 3 is principal bottleneck

1C= 400uO=400u

2c=300 uo=300u

3c=150uO=150u

4C=250uO=150u

An hour lost on a bottleneck is an hour lost on all the system

If a bottleneck can produce 130 units/hr then full system can produce that only, no matter whatever the capacity is at upstream and downstream

An hour saved on a non bottleneck source is just a mirage

Since capacity of the system is governed by bottleneck resource, saving time on a non-bottleneck source does nothing for the throughput in the whole system

Capacity= 200 units/hr capacity = 250 units/hrHour saved 0 hour saved 0.25

1 2

Bottlenecks govern both throughput and the accumulation of inventory

Capacity= 400 300 150 250Output= 400 300 150 150Production rate here is 150 unit/hr which is capacity

of bottleneck. As result inventory accumulates at a rate of 250 unit/hr

1 2 3 4

The size of transfer batch does not need to be equal to process batch

The transfer batch is the quantity of material transferred from one work center to another, where as the process batch or production lot, is that quantity of material produced between each machine set up

Lot sizes should be variable and not fixed

The lot sizes in OPT are a function of the schedule and thus should not be fixed over time or from operation to operation.

Schedules must be established by taking into account all system constraints

Identify the system constraint Decide how to utilize system

constraint Align every part of system to support

constraint even if this reduces the efficiency of non-constraint resources

Evaluate the system constraint If in the previous step the constraint

have been broken go back to step 1

According to Goldratt the goal of a firm is to make money.

If a firm makes only money than it will prosper

To adequately measure a firm’s performance three set of measurement are used.

(1) Financial measurement:-Net profit, Return On Investment, Cash

flow(2) Operational measurement:-Throughput (good sold), Inventory,

Operating expenses ( money that firm use to convert inventory into throughput)

(3) Productivity:-Productivity is measured in terms of

output per labor hour.

• All mfg. processes and flows can be simplified to four basic configuration show below:

If X is bottleneck and Y is non bottleneck (excess capacity)

There are so many means by which bottlenecks can be controlled, they are

DBR SchedulingTime componentsSaving timeAvoid changing a non bottleneck into

bottleneckQuality aspectsBatch sizingVAT analysis

There are two ways to find bottleneck in a system

One is capacity resource profile Other is knowledge, look and talk

• The instrument that can be used to control bottleneck/ control production are

• Drum, Buffer and Rope(1) Drum:- if the system contains bottleneck

the bottleneck is the best place for control. This control point is called drum because it strikes the beat to ensure the upstream operation do not over produce and build up excess WIP inventories.

If there is no bottleneck then best place to set drum is capacity constrained resource.

(2) Buffer:- Keep a buffer inventory in front of bottleneck make sure that it always has something to work on. Because it is a bottleneck so its output determines the throughput of the system

(3) Rope:- Communicate back upstream to A what D has produced so that A provides only that amount. This keeps inventory from building up. This communication is called rope

Following types of time make up production cycle time. If we identify them and measure them we can reduce bottlenecks.

(1)Set up time(2)Process time(3)Queue time(4)Waiting time(5)Idle timeFor a part waiting to go through

bottleneck queue time is greatest. For a non bottleneck waiting time is greatest

Always a bottleneck’s capacity is less than a market demand. There are number of ways we can save time of bottleneck for ex.

Better toolingHigher quality laborReducing set up time

When non bottleneck resources are scheduled with larger batch size, this action would create a bottleneck that we should avoid

The bottleneck does not have extra time so there should be quality control inspection just prior to bottleneck to ensure that the bottleneck work only on good parts

Also there should be assurance of quality downstream from bottleneck to maintain throughput

For bottleneck resource larger batch size is desirable because larger batch size reduces set up time so we can save time

For non bottleneck resource small batch size is desirable

• All manufacturing firms can be classified into one or a combination of three types designated as V, A & T.

• In a V plant to overcome problem of bottleneck batch size should be reduced

• In an A plant bottleneck problem can be overcome by reduced batch size as well as DBR scheduling

• In a T plant efficient human resource can be useful in reducing bottleneck

Production Supply chain (distribution) Finance and accounting (operating

expenses, investment) Project management ( critical chain

project management) Marketing and sales (sales process

engineering)

Increased throughput Increased productivity Reduction in WIP Better utilization of capacity

It may reduce efficiency of non bottlenecks

It is not part of main stream business Not as efficient as Operations

Research techniques Its an applied philosophy not pure Bottlenecks can always not be

improved because it may be due to intellectual property