Theory of Constraints Handbook - James Cox Iii [167]
Let’s view an example. The CCR has an available capacity of 16 hours a day. The short-delivery orders take, on average, 25 percent of the CCR’s capacity. However, as this is just an average, let’s dedicate 30 percent of the CCR capacity to those orders, leaving only 11.2 hours a day (70 percent of 16 hours) for processing the “regular” orders. The calculation of the main planned load, used to determine safe dates, for regular orders should be based only on the regular orders and according to capacity availability of 11.2 hours a day. If the current regular orders contain 100 hours of CCR work, plus 27 hours for “special” orders, then the next regular order received should get a safe date of 9 work days (100 hours of load/11.2 hours per day = 8.92 days rounded to 9 days) from now plus half of the production buffer expressed in work days. Of course, instead of the number of workdays from now, we should convert this to a specific date according to the calendar. This date is the earliest that could be given to the client as the safe date for completing the order.
What If a “Special Order” Is Received, What Safe Date Should It Get?
We assume the due date for a special order is not negotiable. It is solely dictated by the commitment to the market. This means that if the demand for special orders will grow beyond the reservation level, then the buffers of both the regular orders and the special ones would be consumed, which will cause a threat to the combined due date performance. In such a case adding capacity is definitely called for.
Should the Special Orders Get Higher Priority Than the Regular Ones?
The simple answer is no, all the orders compete on the capacity of the resources according to their color state (green, yellow, and red). If one wishes to be certain the special orders are on time, then increasing the production buffer for the special orders could be the right action.
An important point needs clarification: the CCR does not divide its time between the regulars and the specials according to the reservation percentage. The CCR works at all times based on BM priorities. When there are no special orders, then all 16 hours are dedicated to process regular orders.
Buffer Management
* * *
The basics of BM for an MTO environment did not change with the move from DBR to S-DBR. However, the criticality of BM to the success of the implementation has been increased. Once an order is released, then the only control on that order is through BM. The additional flexibility given to the execution phase makes providing good priorities an absolute must for successfully following the planning directives.
The planning procedure of S-DBR is that every order is given a production time buffer and a due date. According to these due dates, the material release schedule (due date minus production time buffer) is determined. At any given point in time, the time left for the order until its due date constitutes the remaining time buffer. The buffer time minus the remaining buffer is the portion of the buffer consumed thus far. The percentage of the buffer consumed to the total buffer is the “buffer status.” Recall: Buffer status of less than 33 percent is considered green. Buffer status between 33 and 67 percent is yellow. Above 67 percent the buffer status is red.
* * *
An Example
The operator of a resource (not necessarily the CCR) has four different orders right now at the site. There are more orders in the shop, but only those four are currently at the work center. Order A1 should be delivered in 5 days; the production time buffer is 8 days. Order B1 is to be delivered in 3 days and the production time buffer is 6 days. Order C1 due date is 10 days from now and the production time buffer