Theory of Constraints Handbook - James Cox Iii [758]
11This is called a “free product” as no additional direct labor expense is required to produce it.
12The APICS Dictionary (Blackstone, 2007, 108) uses a similar term: product structure—“the sequence of operations that components follow during their manufacture into a product. A typical product structure would show raw material converted into fabricated components, components put together to make subassemblies, subassemblies going into assemblies, and so forth.” (© APICS 2008, used by permission, all rights reserved.)
13The TOCICO Dictionary (Sullivan et al., 2007, 15) defines cost-world paradigm as “The view that a system consists of a series of independent components and the cost of the system is equal to the summation of the cost of all the sub systems. This view focuses on reducing costs and judges actions/decisions by their local impact. Cost allocation is commonly used to quantify local impact.” (© TOCICO 2007, used by permission all rights reserved.)
1See Chapter 10 of this Handbook.
Copyright © 2010 by Eli Schragenheim.
2For the interested reader, see the nine OPT® rules in Goldratt and Fox (1986, 179).
3© E. M. Goldratt used by permission, all rights reserved.
4For a more comprehensive discussion of the OPT® software, see Fry, Cox, and Blackstone (1992).
5The more elaborate DBR methodology, like the ones described in the last part of The Haystack Syndrome (Goldratt, 1990a) and in the Disaster software developed at the end of the 1980s, included an algorithm to identify and plan several capacity constraints in detail. Still, having to live with interactive capacity constraints was viewed as causing the system to be unstable and the direct recommendation was to elevate the interactive constraints, so only one capacity constraint would remain.
6Technically the operations on divergence operations, where the parts could go to different end products, were given a schedule to prevent stealing. However, the capacity of these resources was not checked and the other operations of those resources were not scheduled.
7© E. M. Goldratt used by permission, all rights reserved.
8Green-yellow-red buffer regions are the backbone of BM. This topic is mentioned in Chapter 8, and the assumption we adopt here is that the reader is familiar with the basic concept.
9In scheduling the CCR and especially when trying to save setups on the CCR, it could be the case that an order whose due date is later in time would be scheduled earlier to save CCR setup time.
10Sometimes different families of products are going through different work centers and thus it could be the case that one family has a specific resource whose load control dictates the planning, while another family has a different resource where load control is required.
11In all situations, the scheduler should ensure that all materials, specs, tooling, etc., are available prior to release of the manufacturing order to the shop floor (full kitting).
12In DBR, the production buffer would be equal to the constraint buffer plus the shipping buffer. In simplified DBR, the production buffer would be equal to the shipping buffer.
13Other actions such as overlapping processes can also be implemented to reduce lead time significantly.
14There are several exceptions to the rule. Most notably are shops where a dedicated assembly line dominates production. These types of “I”-plants have naturally very low WIP within the line itself.
15BM is also the source for focusing the efforts on balancing the flow. This is mentioned later in this chapter as POOGI—a process for ongoing improvement.
16Different families of products could have considerably different production buffers. We do assume that using a different buffer size is done only when the buffer size is at least 25 percent more or less than buffer sizes already defined.
17The reason is that most orders are found close to the end of the production process when the customer complains. Top management then increases the capacity of these operations, thinking these operations are the cause