Lean manufacturing tool series -12 (Theory of constraints)

Theory of Constraints

The Theory of Constraints is a tool that came about in 1984 from the Israeli physicist and business management author Eliyahu M. Goldratt. The theory and philosophy was born from the appropriately named Goldratt book, The Goal, which proclaimed that all systems and processes are driven by a goal or a few goals which are limited in their capacity only by one or a very slight few constraints. It goes on to claim that the only way to fully achieve this goal or goals is to identify the most limiting constraint and either reduce it so it is no longer the limiting  constraint or eliminate it altogether.
While the focus of the theory and the ensuing improvement is the constraint, there are important assumptions that are considered vital to the success, or to some the downfall, of the theory. Goldratt asserts that all organizations and processes can be measured by three characteristics:Throughput, Operating Expense, and Inventory. Of course, by measuring these three characteristics, we can then track and therefore control them. The variations that are inherent in these is what leads to the constraint.
A good example is to look at an organization and its three characteristics.Throughput can be
viewed as sales, or even the revenue generated through these sales, Operating Expense is exactly that, and Inventory is reflected in the investment in goods or services that the organization participates in to sell their own goods and services.
By measuring all of these characteristics, and tracking and controlling them, we can identify the constraints upon which this theory is built. These constraints are the heart of the theory, and state that there is always at least one, and at most very few, constraints that are holding the organization back from either fulfilling the goal or limiting the rate at which the goal is achieved.These constraints may be internal or external. Some examples of internal constraints are
equipment, people, and policy.
The key to success, Goldratt claims, is to follow “five focusing steps”, which assist in identifying the constraint and destroying it such that we are no longer constrained by that specific constraint and instead another constraint takes its place. It is imperative to understand that a
constraint always exists, but the limiting constraint may change as they are identified and improved or cleared.
If you assume that the goal is clearly articulated, then the five focusing steps are:
1. Identifying the constraint. This is the resource or policy that is preventing the organization from achieving the specified goal. This is found by monitoring the three characteristics as  defined previously.
2. Exploiting the constraint. Ensuring the constraint‟s full resources, attention, and intention are  dedicated toward the goal. Then, identifying ways in which more resources, attention, and intention can be focused solely on the limiting constraint.
3. Subordinating all other resources and processes. This entails taking full inventory of the processes and resources available to the organization and dedicating them toward supporting the exploitation determined in step 2. This usually includes aligning the entire organization
around the decision behind step 2.
4. Elevate the constraint, if necessary. If necessary, dedicate more resources or processes toward eliminating the constraint outlined, or perhaps place more resources on the constraint so the constraint‟s capacity is increased.
5. Re-evaluate the constraint, and repeat with step 1. Over the course of accomplishing steps 1-4, the constraint may have shifted or changed. Re-evaluate the constraint and start again from step 1. One very important characteristic to note is the propensity to continue with step 4 indefinitely, not recognizing that there is a new constraint.
If managed correctly, this is a constant cycle which is repeated indefinitely, and is identified by Goldratt as the Process of Ongoing Improvement (POOGI).
Like anything else, there is always variation when we measure our three characteristics. Because of this, Goldratt preaches the use of buffers, particularly during the exploiting and subordinating stages, to eliminate or reduce the variation effect on the constraint. According to the TOC model, the organization should always be able to output up to the capabilities of the constraint. With the buffers, that constraint is constantly the constraint, ensuring no other piece of the organization becomes the constraint.
The Theory of Constraints can be used by any complex system or organization in which the desired outcome is a goal that is either achieved faster or more cost effectively. By systematically reducing the constraints that keep us from attaining this goal, we dedicate more
resources toward the constraint and less toward other operations that are not constraining the process. You should use this tool over others when your organization cannot define what the
single most constraining process is that is affecting your organization‟s process capability.
A good example is one of a widget manufacturing line that has been manufacturing widgets for the last 20 years. The company has used lean and six sigma for the last 10 years to bring its costs down significantly, and is now the leading manufacturer of widgets across the country.
A manager has been brought in to analyze the process used to manufacture the widgets and recommend areas for additional improvement. The manager, has decided to use TOC as a tool.
He then took about 16 weeks to measure the throughput of every workstation and has found that a single workstation is the constraining factor. They are constantly working on a backlog, and while lean processes have cut their production time by half, they are still the weakest link
in the chain.Management decided to put a second workstation dedicated to that constraining factor,therefore doubling the capacity of the constraint, and thus increasing the capacity of the line.
While the cost was increased twofold, so was the production output, allowing the organization to increase their sales offerings and double their revenue.
The Theory of Constraints is a process for ongoing, continuous improvement of a process or organization. By taking this tool onboard and implementing it, you will find the most
constraining factor that is holding back your company from its best performance.

Prepared by:Md. Tarikul Islam Jony
Mail:jonytex073@gmail.com
+8801912885383

Lean manufacturing tool series part - 11

Takt Time - the Rhythm of lean manufacturing
Do you know how long it will take you to read this article? If you glanced at your watch before
you opened this article, look at it again when you are done. Then, read ten more articles and
take the average reading time. Is that fast? Or is it slow? Should you be reading faster in order
to meet your reading goals? Or should you slow down to maximize comprehension and quality
of the reading? Takt time can answer this question.

Takt time is derived from the German work, Taktzeit, and can be literally translated to mean
“cycle time”. Using the previous example, if your boss came to you and told you to read an
article next week, you would know exactly how much time you would have to block out of your
day to read articles. If you weren‟t feeling well, or thought you were particularly distracted, you
could compare your time to the time you just derived.

Traditionally, Takt time is the maximum time per unit that a production line is allowed to
produce a quality product in order to meet demand. After it is benchmarked, it sets the pace
and the standard for further production from the same line or workstation. It can show
managers and quality teams where to focus their attention and resources in attempting to
improve the overall process. It can also alert managers to bottlenecks and choke points that
need attention to process resources.

The Takt time is computed by dividing the time demand (units required per day) by the net
time available to work (minutes of work per day). This will give you a unit of minutes of work
per unit required, and provides for a good description of what Takt Time really is.

The end goal of determining the Takt time is to produce products at a pace that mirrors what
the customer‟s demand is. By meeting the demand from the customer, the inventory is kept to
a minimum and thus costs are also minimized. Of course, no machine or person is perfect, and
there are inefficiencies in every process, so a good manager and quality specialist will take
these variations into account when determining the required rate to run the line at. Sometimes
it simply takes trial and error to find the ideal rate to run the line at. Additionally, most
companies will have the ability to adjust the required time by adjusting daily working time,
increasing workers, and other things that will indirectly affect the line time.

It is very important to realize the difference between cycle time and Takt time. Takt time is only
determined by the demand and the amount of time available to work. It actually is not affected
by the actual performance of the line or workstation whatsoever. Cycle time, however, is the
amount of time it actually takes to complete the production of the unit. They are separate, and
most people, particularly those who are relatively unfamiliar to lean processes. While they are
not the same thing, Takt time and Cycle time should always be compared to each other for a
relative gage of your process‟s ability to meet the necessary demand.

When a car company comes out with a new model car, they perform market analysis, surveys,
and forecasts that decide what the demand for the new model will most likely be. This, along
with the supply chain management team, can determine what the production goals will be for a
certain factory, and consequently, the line. For example, let‟s say that they will need 30 new
models per day.

In order to get the production team off the ground, produce quality products, and provide
training to the team, management has decided to limit amount of production time available to
the line to 5 hours per day. Therefore, the Takt time is 30 units per day / 5 hours per day, or 6
units per hour required to produce to meet customer demand, and can be further broken down to 1 unit every 10 minutes. This will lead to every car that comes off the line being shipped and no inventory being held at the factory… the ideal way to run the business.
This can be further broken down to workstations. For example, the door installation workstation
for the new, 4-door model car would also need to put out one car per ten minutes. However,
since there are 4 doors, the workstation will have to install one door every 2.5 minutes. While this may seem obvious, what may not seem obvious is that this is beyond the capacity of a single workstation, and will lead to a bottleneck , and subsequently a focused lean project which will bring the cycle time to the Takt time, leading to an efficient process.

Takt time can be used in many applications that aren‟t necessarily the traditional line manufacturing application. It can be used in order processing, call center operation, project management tasks, or anything in a business that can be measured by processing time.

A good tool to have in your toolbox, Takt time will give a company an insight into what the capacity of a method or process must be in order to meet the demand a customer places on it.
By doing this, the company can set a benchmark that will guide the company toward the ideal
situation of perfect supply chain management.

Prepared by :
Tarikul Islam jony
+8801912885383
jonytex073@gmail.com

Lean manufacturing tools series -part 10

SMED - Makes Lean Flexible
concept of Single Minute Exchange of Die, or SMED. Quick changeover, as it is called in many
manufacturing. The actions needed to take, while simple, have a long lasting impact on the
business and the quality, speed, and capability of the line to react to demand changes.

To completely understand SMED, you have to understand assembly lines in exacting detail, and
it helps to know what the objectives of lean processes in general are. Primarily, assembly lines
produce a very specific product by utilizing specific work cells or work stations that produce
pieces of that product with a high degree of efficiency, quality, and speed. Unfortunately, while
this may be able to produce the product quickly, one of the major drawbacks is that the line is only able to produce a single class of product.

The general concept behind lean processes is to reduce or eliminate waste and cut costs by
simplification or process changes. Now that you know about the skeletal model of assembly line
manufacturing and lean processing, you should be able to see the value of enabling a single
assembly line to produce many different products or variations of products.

By doing this, the company reduces the amount of space necessary for them to occupy, they
are able to react to demand shifts in product lines, and overhead is severely cut down so many
products become profitable for the company to produce. This is where SMED comes into play.

If a company were following the SMED philosophy exactly, they would be able to produce a
company and manufacturing layout that could change the dies and robotic programming in the
assembly line so that the assembly line can shift from producing one model to another in a very
short amount of time. By doing this, the company will not need as many assembly lines, or as
many branches on a single line, therefore reducing the square footage necessary to
manufacture a wide line of products. They also will not need a completely different set of
employees to keep the assembly line moving, and will not need to upkeep, buy, or power any
additional equipment associated with the second or third line.

Finally, since the company can quickly adjust the line to manufacture which ever product they
would like, they can quickly change the assembly line to manufacture the product that is seeing
a higher demand and cut back on the product that is seeing a lower demand. By achieving this
incredibly agile position, a company can easily manage its inventory and maintain a large amount of liquidity in their company. The first time a company embarks on a quest to enable SMED, they will not be able to change
over the manufacturing lines as quickly as they would like. The end goal is to be able to shift
the assembly line from one product to another in less than 100 minutes, therefore reducing the
amount of downtime associated with the shift. The company will not realize this significant
progress until a few months of lean studies and process evaluation.

While this is something that anybody can suggest, it is a very high level concept that has to be
evaluated not only at the manager level, but at the upper management level as well. The
effects are far reaching, and without careful planning, a company can possibly negatively affect
their output capacity, leaving a shortage of inventory in the supply chain.

SMED is a very effective way of significantly changing the way a company does business. It
should be fully explored, particularly if a company is in the manufacturing business.

Collected by:
Tarikul Islam jony
01912885383
jonytex073@gmail.com