dbr winning approach

8/20/2019 DBR Winning Approach

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MICSS Run With Under Full Drum-Buffer-Rope Methodology

IntroductionThe reader should go through this run after going through the previous A-Winning-Case-Analysis run. The reader is also advised to read Chapter 2 again with emphasison the Drum-Buffer-Rope (DBR) section.

In the full DBR run the capacity constraint (M4 as the reader should already know) isfully scheduled and the materials that go through the constraint are released based onits schedule. This significantly smoothes the load on the shop.Another value is getting prior notification that orders might be late. Based on thefinite-capacity schedule of the constraint it is possible to predict when an order might

be late. As explained in Chapter 2 the DBR schedule tries to provide full shipping buffer time from the predicted time the last part of the work order finishes processing by the capacity constraint resource (CCR) until the due date. When the CCR schedule

for a certain order is pushed forward in time so less than half of the shipping buffer is provided (due to too much contention), the order is noted as bound to be late.

This warning that an order might be late because the CCR is scheduled too late isincluded, in the simulation, in the red warning.

The initial policies for this run are certainly impacted by what we have alreadylearned and the desire is certainly to do even better.

The DBR Simulation

Initial Policies

After you call the simulation and bring the erpbook scenario up, click on the Sessionmenu, then on Load policies, and double click on erp-dbr.plc.You should get the following window:

The question refers to the schedule of M4. What should the simulation do when thesequence cannot be performed by M4 because of lack of materials? Should it wait formaterials or do whatever is possible? Click on OK to confirm the As possiblecommon sense answer.

Let us walk now to see what policies have been implemented for this run:

In the Marketing View, open the Policies menu and bring up the Product Parametersentry:



We have moved to the more ambitious response times to the market: 4 weeks to shipany order for A1 and 3 weeks to ship any C1 order. As product B1 is relatively lessdesired, the original lead-time is kept. The Red Line Time is now only 2 days,

because the full DBR provides enough protection on the shipping date and there is nolonger a need for an emergency zone.

Click OK and go to the Production View, Policies. Click on Raw Material Release:

Instead of the material requirements planning (MRP) option, we take here the DBR.The constraint machine is declared by us to be M4.The buffers are defined in hours rather than days. The shipping buffer is 40 hours – 5days. The CCR buffer is 8 days. So, the lead-time from material release untilcompletion is assessed as: 8+5 plus the CCR processing time of the order, which is in

line with the 3-week response time to any order for C1 (the most complex product).

The Work Order Policy is built on full subordination to the market:



Work Order Planning Policy is shown below:

Here the lesson from reducing the batch size too much has been learned andimplemented.

The Red-Line Policy is shown below:

The important additional point is marking the Red Line Level Policy field.

During the run the management policy we are taking is being aggressive in acceptingmore market, making sure we do not run out of materials and capacity. The inventorylevels, especially for Z1, are definitely on the high side. The idea is that any shortageof Z1 is very damaging as it goes to all the three products.

The Planning-for Contracts policy deals with when should the planning plan work

orders for the contracts. The default value of 44 working days (two months) is toolong. Once a work order is created it is part of the planned load represented by thered bar. We have chosen a new value of 22 days – giving enough degrees of freedomto M4 schedule to consider these work orders. The Planning for Contracts windowshould look like that:



In the Purchasing View the policy of Material Parameters are:

That concludes the initial policies.

January 1, 2002Results Review

This is just the start of the simulation.Actions

The policies are all set. Run until next month.On January 10, the contract for 55 units of A1 appears. Take it.

February 1, 2002Results Review

We already get a substantial $20,930 profit. The load is not too high — M4 does nothave enough material on hand. However, we should not worry since this level of loadM4 is still not the constraint.Actions

Run until next month.

March 1, 2002Results Review

Everything moves smoothly. The load on M4 starts to build.

Actions

Run until next month.On 3/20/02 the renewal of the contract for B1 will appear. Reject the renewal bymarking the No field and click Continue.

April 1, 2002

Results ReviewThe profit is already $77,909. The red warning is lit. Click on it you will get:



The Less Than 50% shipping buffer is the warning that the CCR schedule for one ormore orders is too close to the shipping date. When you click for the full list you get:

Work order 118 is due on 4/11/02, but the CCR schedule is too close so a realisticdate is 4/15. This is not too good, but it also does not mean the original date cannot bemet. It just causes concern because the time for the last part coming out from M4 has

less than 2.5 days (half of the shipping buffer that is 5 days). However, given the red-line time policy that order will get priority.

Right now let us do nothing. When this list of Less Than 50%... contains only oneorder, the chances for on time delivery are still good enough.

Close the red warning window.

Actions

Run until next month.On 4/15/02 the other contract for 55 of A1 and 20 of C1 appears. This time we will

accept this contract as our policy is to use the advantage of having full DBR to bemore aggressive in the market.Accept the contract by clicking on Yes and then OK.

May 1, 2002Results Review

We have to make some critical decisions now. If you look at the Production View,Information, and Rough Cut Capacity, you see that the future load goes upconsiderably. The current load on M4 is also now significant.

There are two actions to take. One is to reduce the demand for B1 by raising theselling price by 10%. Accepting the contract for A1 and C1 should be at the expenseof selling B1. If there is more demand for B1 it will at least bring more throughput tothe bottom line.

The other action is to add fair amount of second shifts. Ideally we should run day byday and check the need. Instead, we will need a fair amount of consecutive secondshifts at the start of the month, so we could run for a whole month every time.

Note also that the red warning shows now a much longer list of orders that do nothave 50% of the shipping buffer as protection. That clearly means we should go to

second shifts and by that move the schedule of M4 earlier in time.



It seems the relatively low load of last month was only a statistical fluctuation. Theload has been building throughout July. While there is only one red order, the LessThan 50% list is quite long. We need to add significant number of second shifts so theCCR (M4) will work on those order early enough to ensure time delivery

ActionsAdd eight additional shifts. The To date in Add Extra Shift should be 08/10/02.Remember that during weekends there are no shifts at all, and that it is possible to addonly one shift per day. Confirm by clicking on OK.Run until next month.

September 2, 2002Results Review

The load on M4 went down a little, but the whole shop is still loaded. This is how thered warning looks:

One order is in the red (note that the order is not necessarily late, but it just penetrated

into the Red Line Time [2 days]). The Z1 material is below the red level; two moreorders seem to be almost late to M4 schedule (M4 needs the parts in less than 16hours from now).If we double click on the Less Than 50% list we get a long one. Even though ordersappear more than once in the list (depending on the number of M4 operations that aretoo close to the due date) when you scroll and count you will find 12 orders on the M4schedule where timely delivery is not guaranteed.

Actions

We start with purchasing Z1 units. In the Purchasing View we see 144 Z1 units are onhand. Since we should be careful with material availability especially when we draw

every bit of capacity from the constraint, let us buy 200 units from the Fast supplier.In the Purchasing View select Order, Z1, 200, Fast, and then Order. Confirm andclose the window.

Go back to the Production View. Let us add eight additional shifts. The To date on theAdd Extra Shift should be 9/11/02.


October 1, 2002

Results Review



The load went down. The profit is now $319,089 after taxes. Right now M4 has nomaterials in front of it, but we do not get a warning that an order is late to theconstraint. This is because the constraint is not heavily loaded, so nothing isscheduled for the next 16 hours.

Now that the peak demand is over, should we reduce the quality lead-time (QLT) to

the market? As M4 is not too loaded, we could now accept more B1. We are notgoing to reduce the price on B1; we rather get the higher price, but offer 5 weeks ofdelivery rather than 6.

Actions

In the Marketing View select Policies and then Product Parameters. The QLT of B1should be changed to 25 (working days):

Click on OK to accept the change.Run until next month.

November 1, 2002Results Review

The load is just right, even though one order is late to M4. There is no reason to addcapacity. On the contrary, let us reduce the QLT of A1 to 18 days. It seems we can doit.Actions

In the Marketing View select Policies and then Product Parameters. The QLT of A1should be changed to 18 (working days):


December 2, 2002Results Review

We must be careful. There is one order in the Less Than 50% list and three orders thatare late to the constraint. Let us add two shifts.

Actions

Go to the Production View and select Add Extra Shift. Change the To date to12/03/02.



Run until next month.On the 12/11/02 the renewal of the contract for 55 units of A1 will pop up. Accept bymarking the Yes field and click on Continue.

Run of 2002 completed

Results ReviewFirst review the profit and loss statement:

You will notice that it is substantially more than the previous one. This run meansmanaging the company close to its edge.

The extra planning control of DBR, smoothing the load on the shop according to theload on the weakest link is one big advantage. The early warning that some ordersmight be late led to better capacity management.The buffer management part, which is seen via the red line control mechanism, is ofthe utmost important. The Enterprise Resource Planning (ERP) packages that do havefull DBR and buffer management capabilities should be used to manage the sales in a

more aggressive manner. Regular ERP packages can be still manipulated to give verygood results. The management should first have a good grip on the ideas and rationaledemonstrated by the running simulator.

The user is invited to try and achieve more. It is definitely possible. Just see that yourrationale before the run is reasonable. The uncertainty plays a big part in thesimulations, so you must run carefully using the control mechanism information allthe time.

Readers and users are invited to email Eli Schragenheim ([email protected])with questions, suggestions, or maybe just a report on what can be learned by running

the MICSS simulator.

mailto:[email protected]

mailto:[email protected]

dbr winning approach

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