Theory of Constraints Handbook - James Cox Iii [188]
This author defines capacity buffer as a quick means to purchase additional capacity that is truly available on reasonable notice. It is a buffer to protect the ability of the company to commit availability and truly meet the commitment. As a true buffer, the level of use of the buffer signals the level of pressure the system is under. The use of the capacity buffer should be initiated by two different parameters: the full planned load (when it is larger than it should be) and the number of red orders relative to the average number of production orders. The full planned load approximates the real load and it depends on the accuracy of the data. However, when the full planned load is growing beyond the previous limits, one must deduce that higher than usual red orders will follow. Thus, additional capacity can be planned based on the early warning of the planned load, or wait for the emergence of red orders and then add the required capacity. Following the increase in red orders has the advantage of knowing which resources are required for expediting. This is very valuable information for a decision on investments in capacity.
The capacity buffer behaves like every buffer. The use of it could easily conform to the green-yellow-red mark. However, the capacity buffer should be in the green most of the time—meaning less than its potential is actually used. When the regular use is already in the yellow, then its function as a buffer is already compromised to a certain degree.
The Process of Ongoing Improvement (POOGI)
The fourth concept of flow13 (Goldratt, 2008) speaks about establishing a focused process of balancing flow. It certainly fits well with the way BM functions—giving the right priorities to what should be done now. However, balancing the flow should be taken seriously for the longer time frame as well. In other words, we must have a focused mechanism to identify specific areas where an improvement would really improve the overall flow.
Again, BM supplies certain basic information. In MTO every time an order penetrates into the red zone the user should enter a “reason” from a table, so monthly analysis can be done to pinpoint the most frequent reason and see what can be done to eliminate it. On top of the list of reasons, it is possible to collect the whereabouts of the production order when it turned red. The assumption is that in most cases for a resource that causes long delays there will be many times when production orders will turn red while waiting for that resource.
In MTA, entering the red has three possible causes. One is too long of a delay in order release (lack of materials or too high-load pressure). Two is too slow of a flow in the shop floor that caused the on-hand stock to penetrate the red level. Three is high sales within the last day or two. When we look to balance the flow, the third cause is not relevant. Only causes for relatively long delays are relevant for such a process.
The new suggestion by Dr. Goldratt (Strategy and Tactic tree MTS to MTA, 2008, entity 5.113.2) is to register any delay that is “too long” in a work center. The suggested definition for “too long delay” is one-tenth of the formal replenishment time. Registering such a delay does not ensure entering into the final Pareto list for picking the highest one area and trying to improve it. The other condition is that the delayed order would eventually enter into the red. Only then does that occurrence