jelenafedurko_16 tocpa_april 2015_south africa_with corrections

16th International Conference of the TOC Practitioners Alliance - TOCPA

www.tocpractice.com

Copyright 2015 Jelena Fedurko & Oded Cohen

April 23, 2015 Johannesburg, South Africa

16th International Conference of the

TOC Practitioners Alliance - TOCPAwww.tocpractice.com

Using diagonal buffer

for better managerial decisions

in production and operations

Jelena Fedurko, TOC Strategic Solutions, Estonia23rd April, 2015


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Jelena Fedurko is a Co-Founder and Co-President ofTOC Practitioners Alliance TOCPA and InternationalDirector of TOC Strategic Solutions.

Jelena has been involved in TOC since 1999. She is aTOC expert, trainer and consultant, and providesTOC implementation support in production, supplychain and project management. Jelena has workedin various countries all over the world, includingJapan, Poland, Germany, Switzerland, Turkey, Italy,Russia, Ukraine, India, China, Chile, Colombia,Mexico.

Jelena is the author of the books Behind the Cloud,Through Clouds to Solutions, Typical mistakes inworking with TOC Logical Tools. Together with OdedCohen Jelena has co-authored the book Theory ofConstraints Fundamentals. She has contributed to anumber of books on TOC, and has manypublications. Jelena is the translator and editor ofmany books on TOC.

[email protected]

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Jelena Fedurko


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Conventional Definitions of Buffer in business context:

a means or device used as a cushion against the shock of fluctuations in business or financial activity

From Merriam-Webster http://www.merriam-webster.com/

any reserve moneys, negotiable securities, legal procedures, etc., that protect a person, organization, or country against financial ruin.

From Dictionary.com http://dictionary.reference.com/browse/buffer

Common confusion

regarding the word buffer


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What exactly is the confusion regarding the word Buffer (as used in TOC), and what causes this confusion? Lets return to the conventional definitions of buffer in business context: a means or device used as a cushion against the shock of fluctuations in

business or financial activity The core connotation of cushion in this context is ROTECTION

SITTING THERE WAITING to be used WHEN THE SHOCK OCCURS. any reserve moneys, negotiable securities, legal procedures, etc., that

protect a person, organization, or country against financial ruin.The core connotation of reserve is something created IN CASE.

These connotations often trigger the wrong understanding of the term TOC Buffer.

Buffer in TOC in NOT something created in case something happens, and it is NOT reserve added to the main amount of time/inventory/money.

Common confusion

regarding the word buffer


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Buffer in TOC means NOT in case and NOT a reserve, but

a mechanism to manage the flow.

In PRODUCTION we traditionally use 2 types of TOC buffers:

Time buffer

Stock buffer

What is Buffer in TOC

Set PER WORK ORDER

and measured in time

Set PER SKU

and measured in

quantity of SKU units


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The purpose of the Stock Buffer is to provide the next chunk of the

flow (the one that consumes from this stock buffer) with availability

of raw material, semi-finished products and components or

finished goods without too much excess inventory.

TOC Stock Buffer

Production

WORelease

RM store P(C)W


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Time Buffer is assigned to the Customer Order which is the elapsed

time for the WO to be processed in the production area.

In SDBR this Buffer is called Production Buffer and it is assigned to all

the parts that are necessary for the customers order.

The Rope mechanism is used for Material Release and is determined

by deducting the Production Buffer from the Due Date (DD).

TOC Time Buffer for Production


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Time Buffer for Production is called the PRODUCTION BUFFER and is measured in time, its size is preset, for it to work properly the size of the Red zone should be NOT LESS than the

cumulative TOUCH TIME needed to process the work order it serves 3 objectives on different stages of handling a customer order:

(1) to check and determine what completion date can be promised to the client (SALES and PRODUCTION PLANNING)

(2) to determine the work order (WO) release date (PRODUCTION PLANNING)

(3) to give production management early warning signals about the risk of the WO NOT being completed on time and to prompt for corrective actions (EXECUTION CONTROL)

it collects information for POOGI (SYSTEM ANALYSIS)

TOC Time Buffer for Production


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When we need to measure TWO dimensions


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In CCPM, we use this visual format

to measure TWO DIMENTIONS (we call it Fever Chart)

What is Diagonal Buffer?

In CCPM the horizontal axis measures % of Critical (Longest) Chain completed

(by calculating the remaining length of CC).For Production WO, the horizontal dimension measures the REMAINING CONTENT OF WORK for this WO in units or in time.

In CCPM the vertical axis measures % of Buffer consumed

(by calculating the projected penetration into the buffer).

For Production WO, the vertical dimension measures

the CONSUMPTION OF THE PRESCRIBED ELAPSED TIME

for this WO.


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There are certain conditions in the reality of production environment

that can pose questions whether the use of the Time Buffer would be

effective or at all possible:

(1) the touch time is a significant part of the elapsed time that the

work order spends in production often the touch time (including

different kinds of maturing time like cooling when no machine time is

used) is close to 2/3 of the current PLT, thus

the requirement of setting the size of the Red to be not less

than the touch time immediately causes the planned PLT to

increase which does not bring enthusiasm to PPC people and

often is truly not needed

if there is no progress (or not enough progress) on the WO in

the Green zone, the loss of time can not be recovered later in

the process due to a very long touch time

Why we discuss

Diagonal Buffer for Production

(issue 1)


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There are certain conditions in the reality of production

environment that can pose questions whether the use of the

Time Buffer would be effective or at all possible:

(2) the orders for the same SKU are sporadic in time and hugely

vary in quantities, thus

it makes no sense to hold a stock buffer for this SKU to

work in the replenishment mode (as there is no regularity of

consumption),

it is not possible to preset the production buffer size (as the

order size varies hugely and unpredictably)

Why we discuss


(issue 2)


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There are certain conditions in the reality of production

environment that can pose questions whether the use of the

Time Buffer would be effective or at all possible:

(3) the production is very flexible with capacity, and can quickly

and significantly increase the capacity for any work order

through assigning additional molds, knitting machines, workers in

assembling operations, etc., thus

the PPC people argue that in their conditions it is not

practical to have preset buffer sizes

Why we discuss


(issue 3)


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The three issues in the reality of production environment that pose

questions whether the use of the Time Buffer would be effective or

at all possible:

(1) the touch time is a significant part of the elapsed time

(2) the orders for the same SKU are sporadic in time and hugely vary

in quantities

(3) the production is very flexible with capacity, and can quickly and

significantly increase the capacity for any work order

Out of these three issues, the most critical is issue (1):

the Red zone is not enough to do all the work on the WO

if there is no progress (or not enough progress) on the WO in the

Green zone, the loss of time can not be recovered later in the

process due to a very long touch time

Why we discuss



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the Red zone is not enough to do all the work on the WO

if there is no progress (or not enough progress) on the WO in the Green zone, the loss

of time can not be recovered later in the process due to a very long touch time

This brings the need to measure not only the CONSUMPTION OF TIME

allowed for the work order (how much time has already passed from the

allowed release),

but also the PROGRESS OF THE WORK ORDER COMPLETION

in terms of its content.

We can measure the progress of the content in two ways:

IN UNITS: measuring the number of units completed as compared to the

number of units in the WO

IN REMAINING TIME: estimating the remaining duration in time until the

completion of the WO (the same as estimating the remaining completion

of the task in CCPM)

Why we suggest Diagonal Buffer for

some specific Production environments


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% of WO content completion



BLACK ZONE

When we need to measure two dimensions for every work order:

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History of two WOs day after day

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The illustration is taken from Natalia Anisimova, Presentation at 14 TOCPA Conference in Moscow, Nov 2014


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BLACK ZONE


WO 1 is for 200 units and

was given 5 working days

(5 8-hr shifts) PLT Buffer

on the Time Axis with the

release date on 1 Apr.

1 April

By the end of 1 April 10

units were produced.

% of completion of WO

content = 5%

% of time consumption =

20%

5%

1 Apr


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2 April

By the end of 2 April

total 20 units were

produced.


content = 20/200=10%


2/5=40%

5%

1 Apr

2 Apr


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3 April

By the end of 3 April

total 100 units were

produced.


content = 100/200=50%


3/5=60%

5%

1 Apr

2 Apr

3 Apr


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4 April morning

By the start of the shift on the

morning of 4 April production

received information from

quality control that out of 100

produced units 40 were faulty

and had to be produced again.

UPDATED STATUS

4 Apr morning:


content = (100-40)/200=30%

% of time consumption = 60%.

The decision was made to do

overtime on 4 Apr.

By the end of the overtime

there were total 150 good

units produced.

5%

1 Apr

2 Apr

3 Apr

4 Apr morning


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4 April after overtime


on 4 April there were total

150 good units produced.


content = 150/200=75%


80%.

75%

1 Apr

2 Apr

3 Apr

4 Apr morning

4 Apr after overtime


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5 April

By the end of 5 April all 200

units were produced and

accepted by quality control.


content = 200/200=100%


100%.

1 Apr

2 Apr

3 Apr

4 Apr morning


5Apr


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BLACK ZONE


Lets look at another

scenario

4 April after overtime


on 4 April ALL 200 good

units produced.


content = 200/200=100%


80%. 1 Apr

2 Apr

3 Apr

4 Apr morning



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The whole picture at one glance the status of ALL OPEN

production work orders on a certain date



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09.04.2015 13.04.2015 15.04.2015 17.04.2015

What can we learn from these reports regarding the managerial

decisions that were taken on their basis?

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jelenafedurko_16 tocpa_april 2015_south africa_with corrections

Documents

term toc buffer

operations jelena fedurko

jelena fedurko oded

jelena fedurko oded

odedcohen jelena

word buffer

toc logical tools

business context