theory of constraints sim
DESCRIPTION
Systems dynamic model testing the Theory of ConstraintsTRANSCRIPT
A Dynamic Simulation of the Theory of Constraints
by Dave Guggenheim
Preface
• Systems dynamic models originated at MIT• Jay Forrester developed the concept• Richard Bennett created the first software• John Sterman wrote the business text
StockFlow
The Model Before ToC16,800 once per week
Randnorm(200, 5) per hour
Randnorm(500, 50) per 8-hour shift10 workers @ 50 units per shiftRandnorm(99, 5) per hour
Randnorm(1, 5) per hour
Randnorm(80, 10) per hour
Randnorm(150, 5) per hour
2,400 once per day
50% of failures per 4 hours
Inbound Logistics
Pre-Production
Production
Production Testing
Production Finishing
Outbound Logistics
Average Throughput = 11,000 units per weekShipping Capacity = 16,800 units per week
The Model After ToC16,800 once per week
Randnorm(200, 5) per hour
Randnorm(800, 80) per 8-hour shift16 workers @ 50 units per shiftRandnorm(99, 5) per hour
Randnorm(1, 5) per hour
Randnorm(80, 10) per hour
Randnorm(150, 5) per hour
2,400 once per day
50% of failures per 4 hours
Inbound Logistics
Pre-Production
Production
Production Testing
Production Finishing
Outbound Logistics
Average Throughput = 13,500 units per weekShipping Capacity = 16,800 units per week
In Conclusion
• The Theory of Constraints is as real as 3.1415926535…• Bottlenecks constrain throughput like a stomach stapling.• Bottlenecks require a tradeoff.
• Operating Expense for Inventory and Revenue• Bottlenecks migrate like a moose in rut.• Keeping tight control over production requires special
tactics and people (Jet Li Six Sigma Black Belt Sensei).