oded cohen_production_eng_17 tocpa_vilnius_15 may 2015

17th International Conference of the

TOC Practitioners Alliance - TOCPAwww.tocpractice.com 15 May 2015, Vilnius, Lithuania

Practical Advice on

Implementing SDBR in

Production

Oded Cohen, TOC Strategic Solutions, Israel15 May 2015

17th International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com

Oded Cohen

Oded has over 35 years of experience in developing,teaching and implementing TOC methodology,solutions and implementation processes workingdirectly with Dr. Goldratt all over the world. Among thecountries to which Oded brings his expertise are theUSA, Canada, Japan, India, China, the UK, Poland,Russia, Ukraine, Colombia, Chile, Peru, Turkey andmany others.

Oded has authored multiple TOC articles andcontributed to numerous TOC books.

Oded in the is the author of Ever Improve A Guide toManaging Production the TOC Way, published in June2010. Oded co-authored the book Deming & Goldratt:The Theory of Constraints and the System ofProfound Knowledge The Decalogue.

Together with Jelena Fedurko Oded has co-authoredthe book Theory of Constraints Fundamentals.

Oded is International Director of TOC StrategicSolutions Ltd and Founder and Co-President ofTOCPA.

[email protected]


Introduction Managing Production the TOC Way Planning in MTO Planning in MTA

Practical Advice on Implementing

SDBR in Production

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Historically, the TOC approach to managing production was named as DBR Drum Buffer Rope (The Race, 1986).

The DBR was the solution for production environments supplying Customers Orders (MTO) and operating with bottleneck(s).

The application of DBR expended to environments with no bottlenecks and therefore with market constraint . This application became significantly simpler (especially technically). The name given to the solution was changed to SDBR Simplified DBR

The concepts of SDBR were used in environments that produce stocks for availability . This TOC Solution is called MTA. Even though some of the mechanics of the solution differ from MTO, the solution is still called - SDBR.

SDBR

The Brand

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The brand name of SDBR signifies - Managing Production the TOC Way covering the TOC Solutions for MTO and for MTA


The approach stems from the TOC Way of Managing Flow, and includes:

Setting up the Desired Service LevelThree basic managerial functions: Decision

Making, Planning and Execution ControlThree major flows: Process, Information and

Decision

Buffers and Buffer Management

Managing Production

the TOC Way

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Setting up the

Desired Service Level

High level of service means: For MTO Production (S-DBR) ensuring high on time

deliveries (>99%) while having competitive quoted lead times (QLT).

Measuring: DDP, T$D and QLT For MTA Production ensuring high level of

availability (>95%) coupled with no excess inventory. For the portfolio of SKUs under MTA.

Measuring: Availability, Inventory Turns, DIOH

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The Three Basic Blocks of

Managing Production

Achieving the Performance in line with the set Service Level

Execution ControlTracking and

controlling the execution of the

plans

Decision MakingSetting up the

objectives with the right measurements

PlanningDetermining periodic

plans (weekly, monthly) and frequent detailed instructions

(daily)

Decision Making is used also in Planning and throughout the Execution Control

PlanningDetermining periodic

plans (weekly, monthly) and frequent detailed instructions

(daily)


The Three Flows within

the System

Process flow

$

Goal units

Management / Workforce

InformationFlow

DecisionsFlow

Blocking factor

NPROI

Necessary Conditions (rules of the game): Such as - Cash Flow

Throughput


Process flow Goal units

Management / Workforce

InformationFlow

DecisionsFlow

1

% Order Complete Production/Operation Buffer

StockBuffers

InformationFlow

Diagonal Buffer

The TOC Production

Buffers


TOC Buffers

For Production

Production Buffer - Time

Material Release

Time

Due DateProcess flow

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Material Release

Process flow

MTO

MTA


Production Planning

The TOC criteria for a good plan:

1. Provides financial benefit supports the generation of Throughput

2. Realistic challenging but achievable3. Contains protection against disruptions (Murphy)

The Buffers play important role in planning production.

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Production Planning

The Production Plan should provide: The schedule for starting the production of the work

orders - Work Orders Release Instructions for loading the machineTOC splits the planning between the Planning Department (PPD) and Production Management

PPD provides periodic plans for WOs Release. Usually weekly, but can be more frequent when needed.

Production Management provides the detailed plan for the work of the machine for the very short term (Day, shift, next job, etc.)

Priority is determined by the Buffer Status12


Buffers and Planning

MTO

Planning in the MTO environment is relatively simple.Once the company sets the delivery date of the customers order it becomes the Major Driver of the system.Production Planning Department (PPD) determines the IDD Internal Due Date which sets the date for production to complete ALL the work which is needed for the Customer Order. Then PPD produces the plan for WOs release. The date for release is set to be Production Buffer (time) ahead of the IDD.Buffer Management tracks WO status starting from the date of release.

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MTO Planning

WO Release

Customer

Order No.

WO Order

No.

Delivery Date

requested by the

Customer

Delivery Date

Promissed

IDD Internal

Due Date

PB -

Production

Buffer

[Working

Days]

Release

Date

Planned

CO- 01 WO-A01 5/5/2015 14/5/2015 12/5/2015 10 2/5/2015

CO- 02 WO-A02 18/5/2015 18/5/2015 16/5/2015 5 11/5/2015

CO- 03 WO-A03 18/5/2015 18/5/2015 16/5/2015 10 6/5/2015

CO- 04 WO-A04 18/5/2015 20/5/2015 18/5/2015 10 8/5/2015

CO- 05 WO-A05 18/5/2015 20/5/2015 18/5/2015 8 10/5/2015

CO- 06 WO-A06 28/5/2015 28/5/2015 26/5/2015 15 11/5/2015

CO- 06 WO-A07 5/6/2015 5/6/2015 3/6/2015 15 19/5/2015

CO- 07 WO-A08 28/5/2015 28/5/2015 26/5/2015 10 16/5/2015

CO- 08 WO-A09 12/6/2015 12/6/2015 10/6/2015 12 29/5/2015

CO- 09 WO-A09 12/6/2015 12/6/2015 10/6/2015 12 29/5/2015

CO- 10 WO-A09 18/6/2015 18/6/2015 16/6/2015 12 4/6/2015


MTO Planning

Machine Schedule

The work instructions assigning jobs to machines or operators is usually done by line management.The assignment is done at the beginning of a day or a shift or by the completion of a job.A job can be assigned when: The WO is waiting in front of the machine All the additional materials/components are

available The full kit drawings, tools etc. is availablePriority is dictated by the color system of the status of the Buffers.


Buffers and Planning

MTO

Determining the Production Buffer PB is set for the Customers Order It must be challenging but achievable! It can be:

Total Touch Time x 3 x Current Quoted Lead Time (QLT) Any other formula that covers for the touch

time, setup time and reasonable wait times Ideally PB should be as general as possible such as:

per product family, per technological process etc.) PB may vary with order quantities or special causes

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Planning in MTA

Planning in the MTA is shared between PPD and Production Management the same way as in MTO.However, the role of PPD is more complicated than in the MTO.This is due to the dynamic nature of the customer. There is no IDD for the WO and also the quantity is not always predetermined.Production is expected to replenish stock that has been consumed from the FG stock as planned by PPD.PPD is responsible to provide the desired service level with as little inventory as possible.Therefore, PPD has to make clever decisions on the timing and quantity of every new WO.

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Consumed

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Stock Buffer for MTA

Replenishing Consumption

To Be Replenished

1

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WORelease

Production

PPD is informed about the quantity to be replenished (TBR).

PPD needs to decide when to release a WO and what quantity.


MTA Planning

WO Release

For releasing a new WO PPD has to consider: The current status of the Stock Buffer Availability of Raw Materials and components Production capabilities Changes to the planned level of stock as per Dynamic

Buffer Management (DBM) recommendations. The future situation of the stock buffer based on the

expected arrivals and pattern of consumption (virtual buffer)

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MTA - Buffers and Planning(Example - arrivals only)

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Link between availability level

and production planning

Example based on a pilot:

The availability level of pilot SKUs is

consistently higher than that of non-pilot SKUs

Non-pilot SKUs?

Pilot SKUs?

Due to what?


Phase 1 18 SKUDay 1 18.03.13

After 5 days23.03.13

After 2 weeks01.04.13

Phase 2 added 28 SKU = 47 SKUDay 1 19.04.13

After 10 days29.04.13

One month later30.05.13

Link between availability level

and production planning

01.04.13

83.3%

23.03.13

89.9%

19.04.13

66.7%

18.03.13

77.8%

29.04.13

91.5%

30.05.13

97.9%


Conclusion

The practical steps towards improving Planning: Determine the mode of supply of your company:

MTO, MTA or Mixed MTO with MTA. Establish the desired level of service and relevant

measurements. Apply the relevant buffers Monitor daily the buffers status and ask the right

questions Adjust the planning processes and procedures to

support acheiving the Desired Service Level.

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oded cohen_production_eng_17 tocpa_vilnius_15 may 2015

Documents

toc solutions

toc approach

toc methodology

toc way planning

toc strategic solutions

toc way of managing

multiple toc articles

numerous toc books