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RESOURCE CAPACITY MANAGEMENT

The Theory of Constraints & Production Load Requirements: 3-Day Class

OVERVIEW: This three-day class explores Resource Planning, Rough Cut Capacity Planning, Detailed Capacity Planning, Just-In-Time tactics, and the Theory of Constraints (TOC). The traditional MRP approach to the problem of random fluctuations and dependent events is to eliminate the dependence by having a large inventory buffer at every workstation. The JIT approach is to eliminate the random problems by seeking out the root cause of each problem and correcting it.

COURSE DESCRIPTION: In this course we look at projected load requirements for critical production "bottle-necks" that constrain a production facility's ability to meet customer order ship dates and severely impact customer service. MRP and JIT practitioners believe that an ideal plant is a balanced plant, i.e., one in which every resource has the same output capability relative to the plant's need. The Theory of Constraints (TOC) accepts the existence of limited resources where the limited resource is called a constraint. A material buffer under TOC is created only for the constraint and non-constraint stations will therefore have a capacity buffer, i.e. excess capacity. Adding inventory to non-constraint stations or work centers causes lead-time to increase (a cost) and WIP inventory to increase (a cost) while providing little direct benefit. JIT & TOC agree that inventory is waste. TOC buffers the constraint with added inventory to ease the likelihood of failure. An inventory buffer at the constraint does add value and is hence not waste!

TOC accepts the likelihood of unanticipated problems and the use of what it sees as clever value-added strategies. From the JIT view "excessive effort in problem elimination" is a waste! There is a point for many constraints where small buffer inventories that ensure timely completion of scheduled production, cost less than what it would take to eliminate all associated problems. This buffer at the constraint also makes time available for attending to the problems for which no buffer of any size can keep production on schedule! Additional topics will focus on dispatching priorities, on-line reporting, status tracking, problem identification, and problem solving techniques to meet scheduled requirements. A simulation of material and equipment failures and strategic interventions and requirements via work orders, dispatch lists, and detailed capacity planning projections are provided to test participant understanding of "closed-loop" communication and the importance of follow-through!

WHO SHOULD TAKE THIS COURSE

This detail-oriented course is recommended for all project team members. It is designed specifically for production managers, shop supervisors, dispatchers, schedulers and planners, materials managers, engineers, cost accountants, and product-line managers who need to understand the methods used to establish and maintain valid production schedules. Effective "closed-loop" communication and accountability in production environments is seldom possible without this course!

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