New Book Part 14

In my last post I explained that in DBR, the drum is the constraining resource, and the pace of the drum sets both the priority and work schedule for your process. I also explained that the buffer is typically the time schedule in front of the constraint, shipping and any assembly operation needed at the constraint to protect the due dates for all three areas. Your ability to meet these due dates is dependent upon completing two things:

• The buffer must be large enough to handle all of the uncertainties associated with Murphy’s (and Thompson’s) Law, that seem to always occur and eat up buffer time, so that your schedule is achieved.

• The release of raw materials must be done on time, to assure that the constraint is never starved and that the shipment and customer delivery dates are never compromised.

• Green Orders result from the buffer status being greater than 67%, which means that there is still plenty of time left to complete the order, so no need to expedite.

• Yellow Orders are observed if the buffer status falls between 33 and 67%, which means that disruptions have taken place somewhere in the process, and there is a high risk that any other disruptions will probably result in a late order.  However, there should still enough time to complete the order, without the need to expedite.

• Red Orders happen when the buffer status falls below 33%.  The inevitable assumption here is that, if there are more disruptions to the order, the order will definitely be late without expediting.

The rope is simply the length of time needed to complete the processes that are upstream from the drum. It is a signal sent to the beginning of the process, to make sure that raw materials are released on time. In this post, I will talk about how we calculate these buffers.

Although this may sound overly simplistic, the correct buffer size is only known by monitoring your process. Like I explained earlier, if parts are always arriving in the green and yellow zones, then the buffer is most likely too big. Equally, if the parts are always in the yellow and red zones, then the buffer is usually too small. Goldratt suggested that the initial buffer size can be calculated by taking one-half of the current lead time and dividing that time between the constraint buffer and the shipping buffer. This initial buffer size can then be adjusted up or down, depending upon when the parts are arriving. For example, if you find yourself always in the expediting mode, then your buffer is too small, so more time must be added. If you never or rarely experience expediting, then your buffer can be reduced. This attention to buffers is the essence of what we call buffer management.

Each open work order or production batch, will have a buffer status that we can calculate. For example, based upon the buffer status we can relate the color code to a percentage of buffer consumed, according to the following guidelines:

You must always remember that buffer status can change at any time. Because of this, it is recommended that buffer status be checked every shift, and that a First-In-First-Out (FIFO) priority system be followed.  This means that the priority order for working on orders should be red, then yellow and then green.  There should always be a documented record of why orders might consistently fall into yellow and red zones, because they represent an opportunity for improvement in lead times and on-time delivery rates. These improvements could result in a distinctive competitive advantage for your company.

The above figure, taken from Debra Smith’s fantastic book, Measurements for Effective Decision Making, is a graphic of what the DBR system looks like, with the Drum, Buffer and Rope identified appropriately.  Smith explains that in addition to the constraint and shipping buffer, there is a third buffer, the assembly buffer. We included this, in the event that your process involves an assembly that requires the part produced at the constraint before it is completed. That must be accounted for as well, if part of your process includes assembly.

In my next post, I will continue the discussion on the UIC by looking at steps 3a, 3b, and 3c. As a reminder, this material is taken from my newest book, The Focus and Leverage Improvement Book - Locating and Eliminating the Constraining Factor of Your Lean Six Sigma Initiative. published by Routledge/Productivity Press.

Bob Sproull

Update on Enterprise Rental

For those of you who are regular followers of my blog, I wanted to let everyone know that this morning I received a phone call from Enterprise indicating that they are refunding the money that they charged me for the cracked windshield.  This is a step in the right direction for Enterprise Rental, and I appreciate their final decision.
Bob Sproull

New Book Part 13

In my last post I discussed the role non-constraints play in the flow of products through your system and then presented the basics of TOC's scheduling system, Drum Buffer Rope (DBR).  In this post I  will continue the discussion on DBR. As a reminder, this material is taken from my newest book, The Focus and Leverage Improvement Book - Locating and Eliminating the Constraining Factor of Your Lean Six Sigma Initiative, published by Routledge/Productivity Press.

DBR Continued

In my last post I told you there were three very important buffers which were:

• A buffer in front of the constraint to avoid starvation in the event that Murphy (and Thompson) strikes any resource in front of the constraint.

• A buffer in front of assembly, if a constraint part is required to complete the assembly.

• A buffer in front of shipping, to assure on-time delivery, in the event that Murphy (and Thompson) strike upstream of shipping.

I also explained that It is important to understand that these three buffers are generally in the form of time, rather than physical products.  The management of these buffers is critical to your success using DBR, so the question becomes, if time is the buffer, how do you know how much time is required?

• The buffer must be large enough to handle all of the uncertainties associated with Murphy’s (and Thompson’s) Law, that seem to always occur and eat up buffer time, so that your schedule is achieved.

• The release of raw materials must be done on time, to assure that the constraint is never starved and that the shipment and customer delivery dates are never compromised.

The above figure is meant to illustrate any of the three buffers listed above. The basic purpose of these buffers, is to provide a signal to everyone involved as to when and when not to require expediting. That is, when a part is late arriving at the buffer, it creates what is referred to as a “hole” in the buffer. Typically, for each type of buffer, there are three zones, a safe zone (green), a caution zone (yellow) and an expedite zone (red).  Each zone is equal to one third of the total calculated time in which the product must arrive at the buffer location. As you might have guessed, if the part arrives at the constraint on time, it is said to be in the green zone time, so there is no cause for alarm.  On the other hand, if a hole is formed in the yellow or red zones, there is reason to be concerned and immediate action must be taken to prevent constraint starvation.  In the event that parts fail to arrive in the red zone on time, this naturally means that extreme and immediate actions must be taken (i.e. expediting the part).  When this happens the part will definitely arrive late at shipping and will ultimately be late arriving at the customer location.  I can’t emphasize enough that the correct use of these three buffer zones is absolutely critical to DBR’s success.

In addition to these buffers, you can also use improvement data for additional improvements.  For example, if your parts always arrive in the green zone or yellow zones, then there’s a good chance that your calculated buffer time is too large and could be reduced. On the other hand, if your parts are consistently arriving in the red zone, then you must increase the size of your buffer times to avoid continually having late orders to you customers.  It is also possible that what you have identified as the constraint, is not actually the true constraint and that the real constraint lies elsewhere.

In DBR, the drum is the constraining resource, and the pace of the drum sets both the priority and work schedule for your process. The buffer is typically the time schedule in front of the constraint, shipping and any assembly operation needed at the constraint to protect the due dates for all three areas. Your ability to meet these due dates is dependent upon completing two things:

• The buffer must be large enough to handle all of the uncertainties associated with Murphy’s (and Thompson’s) Law, that seem to always occur and eat up buffer time, so that your schedule is achieved.
• The release of raw materials must be done on time, to assure that the constraint is never starved and that the shipment and customer delivery dates are never compromised.

The rope is simply the length of time needed to complete the processes that are upstream from the drum. It is a signal sent to the beginning of the process, to make sure that raw materials are released on time. In my next post, we will talk about how we calculate these buffers.

Bob Sproull

Enterprise Rental

Warning!!

From February 9-16 I rented a car from the Prattville, AL Enterprise rental establishment.  Shortly after driving away from picking up this vehicle, I noticed a small crack in the windshield on the passenger side of the car. I incorrectly assumed that Enterprise had also noticed the crack, but because it was so small, they had elected to rent it to me anyway.  When I returned the car, the crack had expanded to roughly 6 inches in length.  I pointed this out to the Prattville, Al Enterprise office upon returning the car and I was informed that since I had driven the car, it was my responsibility to pay for having the windshield fixed!

I have been a life-long Enterprise Plus member and I was shocked to hear that I was responsible for repairing the cracked windshield when it was already cracked when I rented it!  Clearly, this was not what I had expected from Enterprise.  This post is to inform and warn all my followers of Enterprise’s policy on damage to their vehicles. 

I rented the car as a means of transportation because my brother had passed away on February 6^th in Richmond, Virginia, but was to be buried in Western PA.  It was very cold in PA (in the 20’s) and to my surprise the windshield wiper fluid actually froze, making it necessary to stop every few miles and clean the windshield by hand.  In addition, the wiper blades were in poor condition and just caused streaks on the windshield.  In spite of these conditions, I needed to continue on my trip to have my brother’s body cremated and then driven to PA for burial. Because of the problems with the fluid and the wipers, my bill was reduced by 15%, but unfortunately, because I was blamed for the cracked windshield, my bill was increased by $227!

This is a sad day for me because I have always held Enterprise above all of the other car rental businesses, but to my dismay, I was woefully wrong!  I want all of my followers to be on-guard and aware of Enterprise Rental’s policies when it comes to events such as this.

Very sad day,

Bob Sproull

Continuous Improvement Boot Camp

I am officially announcing my Continuous Improvement Boot Camp for any company in the Southeastern US as outlined in my ad below:

Focus and Leverage Continuous Improvement Boot Camp

FLC 1-day Boot Camp Agenda (At your company to lessen your travel $’s)

1-Day Agenda

• Introduction to Continuous Improvement – Why many improvement initiativesare failing to deliver acceptable bottom line improvements

• Intro to Theory of Constraints, Lean, and Six Sigma (TLS) – the basic concepts of a TLS improvement initiative

• How to identify and capitalize on your company’s leverage point for improvement

• The seven key elements for a successful improvement effort

• Why system-wide improvements are better than localized improvements

• The best form of accounting for “real time decisions” - Cost Accounting (CA) versus Throughput Accounting (TA)?

• Performance Metrics:  Which are the best metrics to motivate the best behaviors?

• Dynamic Replenishment – How to reduce your on-hand inventory by 40-50% and virtually eliminate part’s stock-outs

• The Goal Tree: How to create it, use it to assess your organization, develop an improvement plan and successfully implement it.
• Drum Buffer Rope - TOC's pull-based scheduling system

• Your potential future using what you’ve learned in this boot camp

Call or email Bob to schedule a 1-Day Boot Camp

at your company:

Bob Sproull’s Contact Information:

Phone: 770-906-4787

Location: Prattville, AL

Email:  ras8202@live.com

Website:  http://bsproull-flc.wix.com/flc-consulting

Bob’s Blog: http://focusandleverage.blogspot.com/

Boot Camp Rates:

·       5-10 Participants:   $500/participant (5 participant min)

·       11-20 Participants: $450/participant

·       21-30 Participants: $400/participant

·       Greater than 30 Participants: $300/participant

Contact Bob for other training opportunities (listed on Bob’s Website)

New Book Part 12

In my last post I began my discussion on Step 2a of the Ultimate Improvement Cycle and in this post I will complete this discussion by presenting information on the role of non-constraints and TOC's scheduling method known as Drum Buffer Rope. As a reminder, this material is taken from my newest book, The Focus and Leverage Improvement Book - Locating and Eliminating the Constraining Factor of Your Lean Six Sigma Initiative, published by Routledge/Productivity Press.

Non-Constraints

Our improvement focus thus far has been on the constraint, but now it’s time to turn our attention to non-constraints. You will recall that the third of Goldratt’s five focusing steps is to subordinate everything else to the constraint. Just exactly what is a non-constraint? In TOC jargon, a constraint is any resource whose capacity is less than the demand placed on it, and a non-constraint is any operation whose capacity is greater than the demand that is placed on it. So, theoretically, constraints limit throughput, while non-constraints do not. But, as you will see, the reality is that this is not always true. So, why did Goldratt believe that it was so important to subordinate everything else to the constraint? To quote [2] Debra Smith, “The ability to subordinate will define a company’s ability to succeed with the Theory of Constraints. Exploitation of the constraint is dependent upon effective subordination.”

The key role of non-constraints is to guarantee that the constraint always has work exactly when it is needed, so as never to allow starvation of the constraint. Constraint starvation translates directly into lost throughput, which negatively impacts profitability. The most effective method I have found to assure that constraint starvation does not occur, is by using a TOC based scheduling system called Drum-Buffer-Rope (DBR) coupled with Buffer Management.

DBR is designed to regulate the flow of product through a production line, based upon the processing rate of the most constrained resource, otherwise known as the Capacity Constrained Resource (CCR). In a DBR system, the production rate of the CCR, is equated to the rhythm of a drum.  In order to protect the drum (CCR) from starvation, a time buffer is placed in front of it, which is the average amount of time required for raw materials to be released into the process and processed by the up-stream non-constraints, in time to reach the CCR.  In order to guarantee that product reaches the drum on time, a signaling mechanism, referred to as a rope, connects the drum (CCR) to the raw material release for the first operation. Therefore, the first purpose of the rope is to ensure that the CCR is never starved.

By the same token, we want to guard against excess WIP entering the system, and the rope prevents this as well. Incidentally, the derivation of the term DBR is found in Goldratt’s book, [1] The Goal.  So if you haven’t ever read it, I strongly encourage you to do so. Because of the importance of DBR, we will now spend some time focusing on the implementation of DBR.

Drum Buffer Rope (DBR)

The first step in any kind of TOC based implementation, is to correctly recognize the constraint, or more specifically, the Capacity Constrained Resource (CCR). The slowest resource in any production operation is the CCR, which in fact, sets the pace for every other part of the process. The danger in out-pacing the constraint will be an increase in both Operating Expense (OE) and Inventory ( I ). In fact, maximizing production at non-constraints, will always result in excessive amounts of WIP, extended cycle times, more labor than is actually required, more need for storage, and the need to spend more than is required to secure the needed raw materials. It’s important to remember that what we are trying to accomplish, is to deliver excellent due-date performance at minimum inventory levels.

The important learning here is that different resources, have different capacities.  But because of statistical fluctuations and unexpected interruptions, which can never be totally eliminated, your solution must consider these two phenomena. Murphy’s expression was, “Anything that can go wrong, will go wrong.”  We also believe that Thompson’s Law might also apply.  You’ve probably not heard about Thompson, but his law states that anything that can go wrong, already has, you just don’t know it.

The cold, hard reality is that the constraint must be protected from “Murphy” (and Thompson) at all times and DBR does this effectively.  DBR utilizes three strategically placed buffers to guard against Murphy (and Thompson) as follows:

• A buffer in front of the constraint to avoid starvation in the event that Murphy (and Thompson) strike any resource in front of the constraint.
• A buffer in front of assembly, if a constraint part is required to complete the assembly.
• A buffer in front of shipping, to assure on-time delivery, in the event that Murphy (and Thompson) strike upstream of shipping.

It is important to understand that these three buffers are generally in the form of time, rather than physical products.  The management of these buffers is critical to your success using DBR, so the question becomes, if time is the buffer, how do you know how much time is required? 

In my next post, we will continue our discussion on Drum Buffer Rope by answering the question just posed.

Bob Sproull