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Outlining the Direction of the Solution

Challenging the DBR procedure of finite-capacity scheduling of the CCR does not mean we are looking for something drastically new. Actually, most of the wisdom included in the original solution is still intact. The most critical insight in DBR, which we have already mentioned, is worth mentioning again:

As complex as the production shop floor may be, the performance of the shop as a whole is impacted mainly by a single work center, which determines both the response time and the maximum potential output of the floor.

This insight is relevant for S-DBR as well, even though the CCR is not scheduled in detail and does not have a specific time buffer. The term “weakest link” is perhaps more appropriate than CCR because the weakest link is not always a constraint. Nevertheless, it is always something to monitor because both the potential maximum output and the possible response time are impacted by it. Thus, the weakest link could be used to signal the sales department when additional efforts would be most beneficial and when more care should be given to the quoted delivery time given to potential customers.

The Main Ingredients of the Solution

The solution described here refers clearly to make-to-order (MTO). Another chapter is dedicated to make-to-stock (MTS), or rather make-to-availability (MTA).

S-DBR is targeted at the very short-term. Capacity planning for medium- and long-term is not included within the S-DBR methodology, even though certain information could be extracted from the S-DBR and BM that could support longer-term plans.

Regular short-term planning concentrates on:

1. When to quote the due date for production completion. The underlying assumption is that the due date has to be reliable (safe).

2. When to release the materials.

Two critical tools are required for the planning:

1. The time buffer (production buffer) to be assigned to a manufacturing order for a particular product.

2. The load control on one resource. It is possible though to extend the load control to several resources, but only one of them is truly material in dictating the due date and the material release dates.10

There is yet another piece of information that is important—the standard lead time for the product in the relevant market. It is important because the plan will not always dictate the earliest date that the algorithm based on the load control and the time buffer would come up with. For example, suppose the standard lead time in the industry is four weeks, but because sales are, at the moment, rather low you can deliver an order in just one week. Would you offer one-week delivery? Well, if the customer is willing to pay a high markup you might agree. Otherwise, this seems like a marketing mistake. First, you might give the impression that you are so pressed for money that you are ready to do anything, even at the expense of quality, just to get the order. Moreover, if you get the order, the future expectation might be that you can always complete the order in a week and when you refuse the request, it is because you don’t respect your client.

Thus, the standard lead time is a reference and whenever feasible this should be the date to quote for the regular price and with the promise of absolutely guaranteed on-time completion. Of course, in off-peak periods a company could use the advantage of shorter lead time. Generally speaking, Marketing and Sales should set a clear logical approach to quoting lead times.

The Time Buffer

At the time Manufacturing at Warp Speed (Schragenheim and Dettmer, 2000) was written, the shipping buffer was understood as the shortest time we could safely commit to deliver. For instance, if a certain order could be safely delivered in 12 days, then the order had a time buffer of 12 days.

Additional insight from Goldratt led us to distinguish between two different periods that comprise the shortest safe time from order receipt11