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be flagged for investigation is an empirical rule based on experience. If the point at which a warning signal is issued is too lax (buffer status of, say, 50 percent), then we are likely to receive too many warning signals, creating unnecessary work. Conversely, if the point at which the warning signal is issued is too tight, then very few warnings are issued and, more seriously, there may not be sufficient time to react. Due to the fact that the actual touch times (process + setup) are typically 10 percent or less of the actual production lead time, if we know of serious problems 10 days before the batch is due (for a batch with a standard or planned lead time of 30 days), we should be able to expedite the product to finish on time. In the next section, we discuss how this works in practice, in a production operation that has hundreds of batches in process at any given time.

FIGURE 8-10 Designation of buffer status by a color. Comparison of time remaining (Due Date of Order to Today) to the planned buffer time to assign color to a work order. Status and Action: Red—Time remaining less than one-third of the buffer. Expedite. Yellow—Time remaining between one-third and two-thirds of the buffer. Monitor and plan. Green—Time remaining greater than two-thirds of the buffer. Do nothing.)

Buffer Management—The Process

In accordance with the previous discussion, each open work order or production batch will have a buffer status that can be calculated. Note that the buffer status does not depend on where in the process a specific work order/batch is located. Based on the buffer status, the work orders are color-coded into three different categories.

Green Work Orders: A work order is assigned the color green when the buffer status is greater than 67 percent. For a green work order, there is plenty of time still available to complete the order. No matter where in the production process this order happens to be, there is no cause for concern and it is reasonable to expect that the order will in fact be finished on time.

Yellow Work Orders: A work order is assigned the color yellow when the buffer status is between 33 and 67 percent. For a yellow work order, disruptions have eaten into the normal flow and there is a risk that additional disruptions might make these orders late. However, for now there is no need for intervention.

Red Work Orders: A work order is assigned the color red when the buffer status is less than 33 percent. The time left for finishing this order on time is small (relative to what we would like to have as expressed by the standard lead time). It makes sense to see where in the process this order is located. If the order is near completion, no intervention may be necessary. If the order is still in the early stages of processing (or even waiting for material release), intervention is required to mitigate the risk of a late order.

Each work order thus has a color code assigned to it based on the buffer status at that point in time. As time evolves, the buffer status may change. At the beginning of the shift, production managers should construct the list of work orders that are red at that control point. Each of these orders should be investigated to determine if corrective action is called for. Then responsibility for the corrective action should be assigned. The next day, actions should be reviewed to make sure they were done and the new list of red orders should be investigated. In fact, the primary activity of the daily production meeting is the BM process.

The assignment of colors gives us an opportunity to refine the priority system inherent in the DBR process. The simple FIFO rule can be modified as follows: Red orders first, then yellow orders, and then green orders. If a work center is working on a yellow order and a red order arrives at the work center, it is sufficient that the red order moves to the head of the queue and be processed immediately after the order currently being processed.

Another feature of assigning color codes to work orders is that they provide information about