Brush up your language skills with this Theory of Constraints primer
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This document provides an overview of the Theory of Constraints (TOC). It discusses key concepts in TOC like constraints, bottlenecks, throughput, inventory, operating expenses, and exploiting constraints. It explains that the goal is to make money now and in the future through sales rather than production. Bottlenecks limit the system and floating bottlenecks are unpredictable and should be avoided. It also introduces TOC tools like the three global measures (throughput, inventory, operating expense), Drum-Buffer-Rope, and how TOC differs from just-in-time approaches.
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Similar to Brush up your language skills with this Theory of Constraints primer
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Brush up your language skills with this Theory of Constraints primer
- 1. For those of us who need brushing up on our language Presented by Bonnie Aumann, algorithmics At Agile Philly Primer on the Theory of Constraints
- 2. To Do List The Production Dice Game
- 3. To Do List The Production Dice Game Dependency Statistical Variation
- 4. To Do List The Production Dice Game Dependency Statistical Variation Speechifying
- 5. To Do List The Production Dice Game Dependency Statistical Variation Speechifying Theory in a Nutshell
- 6. To Do List The Production Dice Game Dependency Statistical Variation Speechifying Theory in a Nutshell The Flow Game
- 7. To Do List The Production Dice Game Dependency Statistical Variation Speechifying Theory in a Nutshell The Flow Game Phases, Iterations, and Flow
- 8. A visceral experience Of Reading The goal The Production Dice Game
- 9. Ship 14 Knives in 4 Days The Game Each round represents a day’s work Roll the dice to see what you produced Each operation is dependent on the upstream operation for input Play for 4 days Why 14? The average roll of a dice is 3.5 * 4 = 14
- 10. The limits of my language are the limits of my mind. Speechifying
- 11. The Goal Make money now and in the future
- 12. The Goal Make money now and in the future Sales* NOT Production *Sales minus all money not generated by the co. (materials, commissions, etc.)
- 13. What prevents us from achieving The Goal? Constraints
- 14. What is a Constraint? Anything that limits the system’s performance
- 15. Internal External Bottlenecks Policies Market Demand Raw Materials Constraint is Anything that Limits the System
- 16. Bottleneck A Special Kind of Constraint ≥ Demand on an operation or resource Capacity of the resource
- 17. Capacity Constraint Resource A Special Kind of Bottleneck Limits the entire system’s throughput.
- 18. Balance is Doom Balanced Operations Dependency & Statistical variation Floating Bottlenecks
- 19. Floating Bottlenecks Floating Bottlenecks are… Unpredictable
- 20. Floating Bottlenecks Floating Bottlenecks are… Unpredictable aka Unmanageable
- 21. Floating Bottlenecks Floating Bottlenecks are… Unpredictable aka Unmanageable aka Doom
- 22. The 3 Global Measures Throughput - Money flowing In Rate at which a system generates money through sales (not through production).
- 23. The 3 Global Measures Throughput - Money flowing In Rate at which a system generates money through sales (not through production). Inventory - Money inside company Product inventories are liabilities, not assets. Liability: Something that frustrates achievement of the goal.
- 24. The 3 Global Measures Throughput - Money flowing In Rate at which a system generates money through sales (not through production). Inventory - Money inside company Product inventories are liabilities, not assets. Liability: Something that frustrates achievement of the goal. Operating Cost - Money flowing Out All the money a system spends in turning inventory into throughput (e.g. Managers)
- 25. Profit? Throughput Operating Costs Net Profit
- 26. Increasing Profit Increase Throughput
- 27. Increasing Profit Increase Throughput Decrease Assets (including inventory) Avoid Throughput and Operating expense
- 28. Increasing Profit Increase Throughput Decrease Assets (including inventory) Avoid Throughput and Operating expense Decrease Operating Expense Avoid Throughput and Assets
- 29. Increasing Profit TOC’s order of importance Increase Throughput Decrease Assets (including inventory) Avoid Throughput and Operating expense Decrease Operating Expense Avoid Throughput and Assets Traditional Model puts this in #1 slot “Cost Center Disease”
- 30. Exploiting Constraints Examples throughput Reduce set-up time Relieve workers so there is no idle time at the CCR Sub-contract or outsource bottleneck resource Add capacity to the constraint
- 31. Exploiting Constraints Examples throughput Reduce set-up time Relieve workers so there is no idle time at the CCR Sub-contract or outsource bottleneck resource Add capacity to the constraint
- 32. Exploiting Constraints Examples throughput Reduce set-up time Relieve workers so there is no idle time at the CCR Sub-contract or outsource bottleneck resource Add capacity to the constraint
- 33. Exploiting Constraints Examples throughput Reduce set-up time Relieve workers so there is no idle time at the CCR Sub-contract or outsource bottleneck resource Add capacity to the constraint
- 34. Tell me how you will measure me and I will tell you how I will behave. Why?
- 35. Traditional Theory of Constraints Inventory = Profit Overproduction Busy = Efficient Operational Costs #1 Sub-system optimization Cost Center Disease Inventory = Profit Sell inventory Extra work discouraged Throughput #1 Systemic optimization Continuous Improvement Implications
- 36. via Karl J Scotland http://availagility.co.uk/2010/07/16/the-flow-experiment/ The Flow Game
- 37. Drum – Buffer – Rope Drum The CCR (Capacity Constrained Resource). Purpose: Its production rate sets the production rate for the entire plant, downstream & upstream. Buffer Placed in front of the drum (upstream) to keep it busy for a specified time. Purpose: No throughput disruption. Rope Actions taken to tie the rate at which material is released into the plant (at the first operation) to the production rate of the drum (CCR). Purpose: Ensure WIP inventory doesn’t exceed the level needed for the buffer.
- 38. TOC JIT Job shop 3 Global Measurements Kanban authorizations Flow based Local, non-financial measurements e.g. cycle time Drum-Buffer-Rope TOC vs. JIT
- 39. Most Comprehensive Reference Ever Questions to lead your discovery http://maaw.info/TOCquestions.htm Chapter by Chapter summary of The Goal http://maaw.info/ArticleSummaries/ArtSumTheGoal.htm KanBanDev Yahoo Group