1 Session 17 Theory of Constraint (TOC) Scheduling Theory of Constraint (TOC) Principles Determining Bottleneck Operations Information Flow in TOC Scheduling Constructing the Product Network Drum/Buffer/Rope Concept Scheduling Bottleneck Operations Process and Transfer Batches Repetitive Lot Scheduling Concluding Principles

2 Theory of Constraint (TOC) Principles 1.An hour lost at a bottleneck is an hour lost forever. 2.An hour saved at a non-bottleneck is just a mirage. 3.Bottlenecks govern both throughput and inventory in the system. 4.Schedules should be established by looking at all constraints simultaneously. 5.The process batch should be variable, not fixed. 6.The transfer batch may not, and many times should not, be equal to the process batch. 7.Lead times are the result of a schedule and can't be predetermined. 8.Balance flow, not capacity. 9.The level of utilization of a non-bottleneck is determined not by its own potential but by some other constraint in the system. 10.Utilization and activation of a resource are not synonymous.

3 Determining the Bottleneck Operations Marucheck's plant has three departments: shaping, pickling and packing Order size = 100 pieces Shaping Machines: S/u = 1 hour, Run Time = 1 minute/pc Pickling process: one tank with 1 load of 200 units every 4 hours. (Baskets are loaded while a load is in-process.) Packing: four people perform packing, each person producing 25 units/hour. Which is the bottleneck department?

4 Marucheck's Makeshift Manufacturing DeptS/U RT Hr/Batch Units/hr Shaping (3 machines)1 hr1 min/pc1+100 min/60100/2.67 * 3 =2.67 hrs =112.5 pcs/hr Pickling (brine tank)-4 hrs/batch4 hrs200/4=50 pcs/hr Packing (4 people)-25 pcs/hr/person1 hr4x25=100 pcs/hr Note: batch size = 100 pcs

5 TOC/SERVE Information Flow

6 Sample Product Network

7 Drum/Buffer/Rope Concept Drum:The Schedule Buffer:Located at Bottleneck Stations and at Finished Goods Rope: Pull Scheduling at Non-Bottleneck Stations

8 Scheduling Bottleneck Operations

9 Process and Transfer Batches

10 Ace Tool The production manager selected an example order to use in evaluating benefits and potential costs of the repetitive lot concept approach. The transfer batch size is 100 units. The example order is for a quantity of 1,000 units and has the following routing data: ____________________________________________ Work OperationcenterSetup time_Run time/unit__ minutes 2.4 minutes/unit minutes 1.44 minutes/unit ____________________________________________

11 Ace Tool a.Assuming a single-shift, eight-hour day, five-day period for work centers l and 2, prepare a Gantt chart showing the earliest start- and finish-time schedule for this order under a conventional scheduling approach where all items in the order are processed at one time. Do the same when the repetitive lot concept is used. What are the earliest start and finish times for each transfer batch at work center 2, assuming none of the transfer batches are processed together to save setup time?

12 Ace Tool Solution b.What's the difference in the order-completion times under the two scheduling approaches in part a above? Under No Transfer Option: Work center 1:2.4 min./unit X 1,000 units + 40 min. setup time = 2,440 min. or hours. Work center 2:1.44 min./unit X 1,000 units + 20 min. setup time = hours. (The last operation is completed at hour 65.0 at work center 2.) Under Transfer Option: Work center 1:2.4 min./unit X 1,000 units + 40 min. setup time =2,440 min. or hours. Work center 2: First batch starts as early as 40 min X 2.4 = 280 minutes or 4.67 hours. Each batch of 100 takes 4 hours to process at work center 1 and 20 min min/unit X 100 = 164 min. or 2.73 hours on work center 2. The last batch can clear work center 2 as early as hour

13 Ace Tool Solution (continued) c.What are the benefits and potential costs of this scheduling approach? Shorter production lead time Less work-in-process inventory Improved customer service Costs Using Transfer batches: There could be as many as 10 setups required at work center 2 if none of the batches were run under the common setup. Such a schedule is shown below.

14 Repetitive Lot Scheduling Consider the following data for three jobs processed in the boring machine center for Conway Manufacturing. ________________________________________________ Setup time Run time/ Job(minutes) unit(minutes)Batch size A B C ________________________________________________ Queue data for the boring machine center: Arrival JobtimeJobtimeJobArrival time A8:24B8:40B 9:12 B8:28C8:42C9:14 C8:31C8:44A9:18 A8:34A8:57B9:21 B8:39A9:03B9:31

15 Boring Machine Center a.If the boring machine center used a. first-come/first-served rule to schedule jobs, how long would it take to process the queue? (Assume no other jobs arrive, all jobs in queue are for one batch each, and a job B has just been completed.) First-come, first-served finish time is 2:44 P.M. Total flow time is 6 hours, 20 minutes.

16 Boring Machine Center b.How long would it take to process all jobs in the queue using a repetitive lot logic? Finish time is 12:49 P.M. Total flow time is 4 hours, 25 minutes.

17 Concluding Principles The MPC framework is useful in assessing where a particular approach or system fits within the system. There is no "ultimate weapon'' in MPC systems. Firms should continually evaluate improvements. A working MPC system should be in place before you undertake improvements. You should concentrate on bottleneck resources to focus material planning and capacity planning on the vital few. Variable lot sizes should be used to reduce manufacturing lead time and reduce work-in-progress