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by software. Putting red labels on the red orders is a simple visual tool for an initial implementation of BM. For the operators in the shop, the rules of behavior with red orders must be absolutely clear: The workers must take responsibility to flow the red orders to completion. If an operator needs materials, tools, drawings, or anything else required to move a red order, he or she must get whatever is needed or notify production management immediately of the support needed. Overtime is another option of production management to deal with red orders.

Implementing the load control function generally takes a little more time. Having the planned load in place is not mandatory for getting the initial results. Actually, it is not even very urgent to identify the “weakest link” (the relative CCR). The assumption is that the demand would not rise very quickly, and thus choking the release based on the production buffers and the simple priority rules are enough to improve the due date performance and stabilize the shop.

Once the implementation stabilizes the shop, then identifying the CCR is easy enough. It is the resource that most of the time holds the longest queue of WIP as measured in processing time at that resource. Then the initial steps to implement planned load can be taken. If more than one natural candidate for the CCR shows up, then monitoring the load on three to five work centers is good enough. Once good data on the planned load is obtained, the identity of the real CCR becomes clear. If more than one CCR exists in the same flow, then determine logically which should be the one to use and increase the capacity of the other.

The next step is to establish the rules for Sales to quote due dates, which considers the safe dates given by the planned load (plus half the production buffer). Now the implementation is ready to face a real increase in sales.

The process of ongoing improvement (POOGI) should be established at this point. The idea is that every time an order becomes red, a reason should be entered by a person in charge from the production management personnel. The reason is taken from a prepared table of possible reasons. A reason must answer the question “What now delays the order?” The list of reasons (such as “Quality problems are identified and being taken care of,” “Huge queue of work at work center X due to a long machine breakdown,” “Work center X currently works on the order,” etc.) is presented weekly as a Pareto list and a team under the direction of production management should look to eliminate the top causes of lateness on the list. This procedure should improve the flow even more and then efforts to capitalize on it by creating offers that are more lucrative to the market should be taken.

Looking Ahead to MTS

This chapter focuses on MTO environments. DBR, like previous production planning methods, has assumed every production order must have a due date and that due dates determine the relative priority of any production order. The next chapter is going to show that this assumption is not necessarily true and actually, there should be a clear distinction between MTO and MTS, where no definite customer order exists at the time of material release to production. The next chapter will also deal with mixed environments where certain products are MTS, while others are MTO.

Suggested Reading

Schragenheim, E., Dettmer, H. W., and Patterson, W. 2009. Supply Chain at Warp Speed. Boca Raton, FL: CRC Press. Chapters 3 through 5 are especially relevant. www.inherentsimplicity. com/warp-speed is a site that allows downloading of the MICSS simulator including analysis files and more related materials.

References

Blackstone, J. H. 2008. The APICS Dictionary. 12th ed. Alexandria, VA: APICS.

Fry, T. D., Cox, J. F. and Blackstone, J. H. 1992. “An analysis and discussion of the OPT® software and its use,” Production and Operations Management Journal 1(2)Spring: 229–242.

Goldratt, E. M. 1990a. The Haystack Syndrome: Sifting Information Out of the Data Ocean. Crotonon-Hudson, NY: