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which the constraint is the available capacity at a resource. The simplest way to identify such a constraint is to compare the load placed on each resource with the total amount of production and setup required at that resource to satisfy the market demand. However, this does not always produce meaningful results due to inaccuracies in data. In several hundred factories with which the author has consulted, this method fails to identify the real bottleneck in an overwhelming number of cases. Detailed procedures for identifying the bottleneck have been developed for each of the different production flows—V, A, T, and I—and are briefly discussed at the end of this chapter. (See Srikanth and Umble, 1997, Vol. 2, Chapter 4 for V-plants, Chapter 5 for A-plants, and Chapter 6 for T-plants.) The choice of the bottleneck is the pivotal point in the development of the strategy for the entire business and hence this is a decision that must be made by the business as a whole and is not just a production/manufacturing decision.

Step 2: Decide How to Exploit the System Constraint

The constraint in the environment we are discussing is the available capacity at a specific resource. Exploitation of that resource means that we should maximize performance with respect to the global operational metrics of Throughput, Inventory, and Operating Expense. More specifically, the goal is to maximize Throughput, while efficiently managing Inventory and Operating Expense. How can we maximize the Throughput of the production operation with a specific capacity constraint or bottleneck? To answer this question, we can look at ways in which capacity is currently wasted.

By definition, the load placed by current market demand on a bottleneck is greater than or equal to the available capacity at this resource. If the resource spends any time doing something other than what is required for current market demand, then Throughput will be negatively impacted and we will not have properly exploited the available capacity. It is, therefore, critical that every item produced at the constraint be a product that is required to fulfill short-term market demand. Another way in which capacity at the constraint can be wasted is for the resource to suffer a breakdown and then a significant time to elapse between the resource breakdown and its being fully operational. Excessive setup times, time lost during shift changes or lunch breaks, etc., are all ways in which capacity at the bottleneck is wasted and represents the opposite of exploitation. Policies, such as overlapping shifts and staggering breaks should be put in place to eliminate these forms of wasted capacity. Capacity is also wasted when the bottleneck works on products that are not needed to satisfy current market demand. While this may appear to be so obvious as to constitute a triviality, the reality in most operations is very different. Motivated by local optima considerations, often bottleneck resources end up working precisely in this wasteful way—because either no other work is available or batch sizes in use are excessive. One of the prime considerations in designing the rules that will allow proper exploitation of the bottleneck is to make sure that the bottleneck does not run out of work and that the planned work (as well as actual material available on the factory floor) consists only of the product required to meet very near term demand. The procedures for doing this are discussed in the section on the drum.

Due to the existence of dependencies in manufacturing operations, the performance of any resource is influenced by the performance of other resources. In the simple flow shown in Fig. 8-2, resource R4 cannot continue to work if resource R2 is down for an extended period of time. If resource R4 is a non-bottleneck, then the forced downtime at R4 is not a serious issue. If, however, R4 is the bottleneck in this production flow, then the downtime at R4 is unacceptable as system Throughput is reduced. To ensure that resource R4 can continue to work even when upstream flows experience disruptions,