Theory of Constraints Handbook - James Cox Iii [195]
Concentrating just on the MTA requirements, there are five different areas of need for TOC functionality within the information system (IT) of the organization.
1. Generating production orders based solely on replenishing to a defined target level.
2. Generating the green-yellow-red generic priorities for every single production order. The buffer status should be considered as a “bonus,” which is nice to have but not a must.
3. Using DBM to recommend changes to the target levels.
4. Monitoring capacity through planned load, including being able to recommend what replenishment orders to release.
5. Providing managerial reports, including POOGI, and monitoring the number of red orders and historical behavior of the planned load.
The first area can be quite easily forced on the MRP/ERP. Still, the terminology of target levels or buffers will not be included unless a more massive development is done. It means the people handling MRP need to understand the TOC logic and the terminology well to keep the ERP updated. The real difficulty lies in forcing the MRP/ERP to determine the green-yellow-red priorities. All ERP packages assume every work order should have a date, but the TOC logic is quite different.
Dynamic buffer management is another module that cannot be easily supported within the ERP itself.
One might be able to create a variety of reports of the planned load within the ERP, but it is far from being straightforward.
All of these points are relevant for the development of the organization’s approach to the software side. Every implementation should consider the options for software as an integral part of the implementation.
References
Arnold, J. R., Chapman, S. N., and Clive, L. M. 2008 Introduction to Materials Management, 6th ed., Prentice Hall.
Blackstone, J. H. 2008. APICS Dictionary. 12th ed. Alexandria, VA: APICS.
Goldratt, E. M. 2008. Strategy and Tactic tree. Consumer Goods Make-to-Stock (MTS) to Make-to-Availability (MTA) S&T, Level 5, September 2008.
Goldratt, E. M. 2009. “Standing on the Shoulders of Giants.” The Manufacturer. June. http://www.themanufacturer.com/uk/content/9280/Standing_on_the_shoulders_of_giants (accessed February 4, 2010).
Goldratt, E. M. and Cox, J. 1984, 1993. The Goal. Croton-on-Hudson, NY: North River Press.
Goldratt, E. M. and Fox, R. E. 1986. The Race. Croton-on-Hudson, NY: North River Press.
Schragenheim, E., Dettmer, W. H., and Patterson, W. 2009. Supply Chain Management at Warp Speed., Boca Raton, FL: CRC Press.
Sullivan, T. T., Reid, R. A., and Cartier, B. 2007. TOCICO Dictionary. http://www.tocico.org/? page=dictionary.
Suggested Reading
www.inherentsimplicity.com/warp-speed is a site that allows downloading of the MICSS simulator including analysis files and more related materials.
See also Schragenheim, Dettmer, and Patterson. 2009. Supply Chain Management at Warp Speed. Chapters 6 and 7 are especially relevant.
About the Author
In the last 25 years, Eli Schragenheim has taught, spoken at conferences, and consulted in more than 15 countries, including the United States, Canada, India, China, and Japan. He has also developed software simulation tools especially designed to experience the thinking of TOC, and consulted with several application software companies to develop the right TOC functionally in their own packages.
Mr. Schragenheim was a partner in the A.Y. Goldratt Institute and he is now a Director in The Goldratt Schools.
He is the author of Management Dilemmas. He collaborated with William H. Dettmer in writing Manufacturing at Warp Speed. He also collaborated with Carol A. Ptak on ERP, Tools, Techniques, and Applications for Integrating the Supply Chain, and with Dr. Goldratt and Carol A. Ptak on Necessary But Not Sufficient. In March 2009, a new book titled Supply Chain Fulfillment at Warp Speed, with William H. Dettmer and Wayne Patterson was