Thursday, November 6, 2014

Focus and Leverage Part 389

Over the past several days I have received not one, but two emails from two Plant Managers asking me to write about TOC's scheduling mechanism, Drum Buffer Rope.  Because I like to respond to reader requests, today's posting will be about DBR.

Scheduling is an important tool for manufacturing because it tells a production operation what to make, when to make it, what materials to use, and on which equipment to use. Production scheduling aims to maximize the efficiency of the operation while minimizing costs.  Companies typically use backward and forward scheduling in order to correctly plan and allocate equipment and human resources, plan production processes and purchase materials.  Forward scheduling is planning the tasks from the date resources become available to determine the shipping date or the due date, while backward scheduling is planning the tasks from the customer due date to determine the start date and/or any changes in capacity required.

If done correctly, some of the benefits derived from effectively scheduling a production unit include inventory reduction, production leveling, less scheduling effort, maximum throughput, and improved on-time delivery.  The most effective production scheduling method I have is referred to as Drum-Buffer-Rope (DBR), so named for its three components.  The drum is the constraint operation that hopefully you’ve already identified as limiting the plant’s throughput.  The drum sets the pace of production for the rest of the plant in that the rest of the plant (i.e. the non-constraint operations) follows the beat of the drum or constraint. The non-constraints make sure the drum (the constraint) is never starved and that anything the drum has processed does not get wasted.

The buffer’s purpose is to protect the drum from starvation, so that it always has work flowing to it. The buffer in a DBR system uses time as its unit of measure, rather than quantity of material even though we utilize a physical buffer as well to protect the constraint.  In a typical DBR system there are three strategically placed buffers.  The first buffer is in front of the constraint to,again, protect the constraint from starvation.  The second buffer is in front of an assembly operation to ensure that all non-constrained resource parts arrive and are waiting in front of the assembly until the constraint parts arrive.  A third buffer of finished goods is placed in front of shipping to ensure the on-time delivery to protect against any disruptions in the upstream operations.

The rope is essentially a work release mechanism for the plant’s raw materials to the first operation to ensure that they will reach the buffer before the constraint is scheduled to work on them. The rope ties the first operation to the pace of the constraint operation.  The length of the rope is simply the length of time required to keep the constraint buffer full.  While it is not my intention to provide the finite details of how to implement DBR, I will discuss both the basics of doing so and the potential benefits of such an implementation.  Smith [1] (an excellent reference on DBR by the way and much of what I am writing here) explains that there are predictable and proven effects of implementing DBR which include:
  1. Machine utilization and labor efficiencies at non-constraints will decrease.
  2. Raw material, work-in-process and finished goods inventories will contract
  3. Lead and cycle times will shrink.
  4. Scheduling will be much easier
  5. Batch sizes can be reduced
  6. Cash flow will spiral upward
  7. There will be a one-time negative net income hit as the excess work-in-process and finished goods inventories are reduced and overhead stored in inventory is expensed through cost of goods sold
  8. Excess capacity will become visible
  9. Because the constraint will eventually move to the market place, resources will eventually need to be refocused to the market place
  10. Competitive advantage for the company is improved because of shorter lead and cycle times which can be used by Sales and Marketing to improve market share.
One of the key points to remember regarding the implementation of a DBR system is that it will not be sustainable unless traditional performance measurements like machine utilization, operator efficiency and incentive systems throughout the company are either abandoned or radically changed to be compatible with the TOC concepts and actions.  Another key point to keep in mind is that one of the rules of DBR is that there will be no fixed batch sizes or set-ups at the non-constraint operations.  In order for DBR to be successful, non-constraints must be flexible enough to stop for set-up when they are required to and not according to a predetermined schedule.  The same thing applies to fixed batch sizes.  When the DBR schedule calls for more parts to be at the constraint, it is imperative that whatever is on hand should be transferred immediately rather than waiting for a fixed amount.

DBR is designed to regulate the flow of work-in-process through a production line based upon the pace of the slowest resource, the constraint operation.  In order to optimize the flow of product through the factory, material is released according to the capacity of the constraining operation or capacity constrained resource (CCR).  The production rate of the CCR is equated to the rhythm of a drum.  The rope is the communication mechanism that connects the CCR to the material release to the first operation in order to make certain that raw material is released in time to guarantee that the constraint always has material to work on.    So the first purpose of the rope is to assure that the CCR is never starved and not inundated with excess work-in-process inventory.  Because of the existence of statistical fluctuations and disruptions in the upstream operations, a buffer is established to protect the CCR from being starved.  By the same token the rope assures that material is not introduced into the production process faster than the CCR can consume it.  So DBR has three purposes, namely to (1) protect the CCR from starvation and (2) ensure that excess material is not released into the system and (3) to protect the delivery due dates to the customer.
There are three main elements of Drum-Buffer-Rope:

  1. A shipping schedule which is based upon the rate that the constraint can produce parts.  That is, use the throughput of the constraint for promised due dates
  2. A constraint schedule which is tied to the shipping schedule
  3. A material release schedule which is tied to the constraint schedule.
Visually these three elements might look like the figure below [1].  Here we see the three elements of the Drum-Buffer-Rope system and the interconnectedness of each.  The drum sets the pace of the production line and its capacity is hopefully greater than the number of orders in the system.  In order to satisfy the shipping schedule, we must first fulfill the constraint schedule.  In order to meet the constraint schedule, we must satisfy the material release schedule.  Failure to release materials per the schedule will jeopardize the constraint schedule which will in turn jeopardize our shipping schedule.  Because of this linkage of schedules, managing the buffers becomes critical!

In the figure above the three buffers are displayed,  the constraint buffer, assembly buffer and shipping buffer.  These buffers are comprised of two different dimensions, space and time.  Now what do we mean by that?  Since we don’t want to have excess inventory in our process, the buffers contain some physical inventory (i.e. space) and a liberal estimation of lead time (i.e. time) from various points within our total process.  In the case of the constraint buffer we place an amount of physical inventory in front of the constraint and a time buffer based upon the lead time from raw material release to the constraint operation.  Likewise, the assembly buffer contains some amount of material and a time buffer based upon the lead time from the constraint operation to the assembly operation.  The shipping buffer contains some amount of WIP and a time buffer based upon the lead time from either the constraint operation or assembly operation (if assembly is required) to completion into finished product.  So how much is “some amount of material?”

To size the buffer correctly, the arrival of parts to the buffer must be monitored and compared to the scheduled arrival time.  By monitoring the buffer we are essentially sending a signal to the plant as to when we need to expedite parts.  You’ll notice a section of the above figure labeled “Buffer Management.”  (Green – Yellow – Red Boxe). When parts do not arrive into the buffer per the schedule, it in essence creates what is referred to as a “hole” in the buffer.  If we divide the buffer into three zones, we will be able to successfully manage the buffer.  The first zone (the green zone) means that everything is going according to the scheduled arrival date so holes in the green zone are no cause for concern.  The second zone (the yellow zone) tells us that the parts are not arriving to schedule and that it is time to locate the missing parts and create an expediting plan in the event the parts need to be expedited.  The third zone (the red zone) means that the parts will not be arriving into the buffer on schedule and that the jobs need to be expedited.  Managing the constraint buffer focuses attention on late arrivals to the constraint and tells us when we need to expedite and when not to expedite.

How much physical inventory is a function of how stable or consistent our process is producing product.  That is, if we are never creating holes in our green zone, then our buffer is probably too high. By contrast, if we are constantly penetrating our red zone, then the buffer is clearly too low.  If we have over-sized our buffer, then we are needlessly increasing operating expenses and cycle time while at the same time decreasing inventory turns and cash flow.  If we have undersized our buffer, then we run the risk of starving our constraint and losing valuable throughput.  My advice to you is to err on the side of conservatism because losing valuable throughput is much more damaging to your plant than increasing operating expenses or reducing cash flow.

How much of the buffer should be physical parts and how much should be time depends upon the variability of our process.  If we have a highly variable operation feeding the constraint, or one that has many disruptions, then most of our buffer will be in the form of physical materials.  If our feeder operation contains very little variability, then most of the buffer will be in the form of time.  As we improve our process (i.e. reduce waste and variation) and render it more consistent and stable, then the ratio of physical inventory to time will change accordingly.  Remember the purpose of these buffers is to protect our constraint from starvation and our delivery of product to customers.  The DBR system is a finite scheduling method that attempts to balance and control the optimum flow of materials through a plant in accordance with the demands of the market while minimizing lead time, inventory and operating expenses.
Bob Sproull

[1] The Measurement Nightmare – Debra Smith


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