1. DP Johnson, 2005 Dealing with Production Bottlenecks Mini-case Be Sure To Review Notes Area And Related Word Document Forward to Instructors

2. DP Johnson, 2005 Dealing with Production Bottlenecks Mini-case The concepts and approach applied in these examples come from the book “The Goal” by Eli Goldratt. This book is required reading for anyone interested in manufacturing, production operations and productivity improvement

4. The Goal  Every system was built for a purpose  Must define the system’s global goal  Actions of and decision about subsystems must be judged on impact towards the global goal From “The Goal” by Eli Goldratt

5. Constraints  Anything that limits a system from achieving higher performance vs its goal  Critical Constraint The active constraintThe active constraint The one that is currently limiting the systemThe one that is currently limiting the system From “The Goal” by Eli Goldratt

6. Flow and Constraints 200 225 220 400 500 250 300 500 350 250 300 600 #’s are Maximum Production Rates In Units/Hour

7. Flow and Constraints 300 400 500 300 500 1000 350 275 250 300 600 50% / 50% Split #’s are Maximum Production Rates In Units/Shift

8. Five Steps  Identify the System’s Constraints  Decide how to exploit the system’s constraints  Subordinate everything else to the above decision  Elevate the system’s constraints  If in the previous steps a constraint has been broken, go back to step 1 From “The Goal” by Eli Goldratt

9. Identify the System’s Constraints  Prioritize by impact on the goal – otherwise too much trivia  Specifically identify the active constraint  Find a numeric capacity value if possible From “The Goal” by Eli Goldratt

10. Decide how to exploit the system’s constraints  Find ways to maximize output of bottlenecks – aka active constraints  Find ways to offload and maximize effectiveness of this resource From “The Goal” by Eli Goldratt

11. Subordinate everything else to the above decision  Priorities for __________________  Do you need to run other resources at full capacity?

12. Elevate the system’s constraints  Can you… Increase the capacity of the bottleneck?Increase the capacity of the bottleneck?  Speed up?  Add more available time?  Reduce setup time and other downtime? Cut the constraint resource out of some processes?Cut the constraint resource out of some processes? Use alternate resources?Use alternate resources? Improve the effectivenessImprove the effectiveness  Inspection prior to bottleneck? Can we break the constraint?Can we break the constraint?

13. If in the previous steps a constraint has been broken, go back to step 1  Once you break the critical / active constraint there will be a new one  Find the new one and repeat the process From “The Goal” by Eli Goldratt

14. Flow and Constraints 300 400 500 200 300 500 250 350 250 300 600 50/50 Split ID Constraints ExploitSubordinateElevateBreak/Repeat What if demand is = 275 per shift? #’s are Maximum Production Rates In Units/Shift

15. Multiple Product Flows 300 400 500 200 300 250 What if demand is… 150 per hour of A 150 per hour of B Flow for A Flow for B #’s are Maximum Production Rates In Units/Hour

16. Assembly Product Flows 75 350 300 150 175 55 175 What if demand for assemblies is 150 per shift Flow for A Flow for B Assembly Station Combines part A and part B into one assembly which is sold as a complete product Capacity: 75 assemblies per shift 100 Production Rates In Units/Shift

17. Cycle Time Example 1.5 min/unit of D 1.5 min/unit of C 1.5 min/unit of D What if demand is 150 assemblies per shift and One shift has 410 available production minutes? Flow for C Flow for D Assembly Station Combines part C and part D into one assembly which is sold as a complete product Standard Time: 3 min per assembly 2 Min/unit of C 1 min/unit of D 3 Min/unit of C Machine 1 Machine 2 Machine 3 Machine 4 Machine 5

18. Example 1 Bobco makes a product consisting of these 9 parts which are manually assembled. There are 8 plastic parts and one turned metal part. A process flow diagram is on the next page

19. Example – Can you find the bottleneck if all departments run 40 hrs/week? - Can you meet a forecasted demand for 2000 units per week? Bobco

20. Example – Can you find the bottleneck if all departments run 40 hrs/week? - Can you meet a forecasted demand for 2000 units per week? Bobco FIND THE CAPACITY OF THE SYSTEM

21. Samco Mini-Case Problem   Samco makes three products A B and C. The Three are very similar..   A two metal and three plastic components assembled manually   B two metal and three plastic components assembled manually   C two metal and three plastic components assembled manually

22. The process map and details are shown on the following pages Parts for Product A Parts for Product B Parts for Product C

23. Samco

24. The production system is having problems. WIP is piling up all over the factory. Orders are going out late. Departments are requesting overtime to catch up, but even when overtime is authorized for all departments the situation does not improve. When overtime is authorized the backlogged orders are filled, but WIP seems to grow, adding to the confusion and congestion on the floor, which seems to generate additional request for overtime to catch up and clear out WIP and new late orders.

25. What can be done? The company has no money for capital investments (new equipment) but is willing to consider implementing recommendations that do not involve capital spending.