JelenaFedurko - 16 TOCPA - April 2015 - South Africa - With Corrections

www.tocpractice.
com
16th International Conference of the

TOC Practitioners Alliance - TOCPA
www.tocpractice.com
April 23, 2015 Johannesburg, South Africa
Using diagonal buffer

for better managerial decisions
in production and operations
Jelena Fedurko, TOC Strategic Solutions, Estonia

23rd April, 2015
Copyright 2015 Jelena Fedurko & Oded Cohen
16th International Conference of the TOC Practitioners Alliance - TOCPA
www.tocpractice.com
Jelena Fedurko
Jelena Fedurko is a Co-Founder and Co-President of
TOC Practitioners Alliance TOCPA and International
Director of TOC Strategic Solutions.
Jelena has been involved in TOC since 1999. She is a
TOC expert, trainer and consultant, and provides
TOC implementation support in production, supply
chain and project management. Jelena has worked
in various countries all over the world, including
Japan, 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 in
working with TOC Logical Tools. Together with Oded
Cohen Jelena has co-authored the book Theory of
Constraints Fundamentals. She has contributed to a
number of books on TOC, and has many
publications. Jelena is the translator and editor of
jelenafedurko.gs@gmail.com
many books on TOC.
www.toc-strategicsolutions.com
www.tocpractice.com
www.tocpractice.com
Common confusion
regarding the word buffer
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
www.tocpractice.com
Common confusion
regarding the word buffer
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.
www.tocpractice.com
What is Buffer in TOC
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
Set PER WORK ORDER

and measured in time
Set PER SKU
and measured in
quantity of SKU units
www.tocpractice.com
TOC Stock Buffer

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.
WO
Release
Production
RM store
P(C)W
www.tocpractice.com
TOC Time Buffer for Production

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).
www.tocpractice.com
TOC Time Buffer for Production

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)

www.tocpractice.com
When we need to measure TWO dimensions
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What is Diagonal Buffer?

In CCPM, we use this visual format
to measure TWO DIMENTIONS (we call it Fever Chart)
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.
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.
www.tocpractice.com
Why we discuss
Diagonal Buffer for Production
(issue 1)
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
www.tocpractice.com
Why we discuss
(issue 2)
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)
www.tocpractice.com
Why we discuss
(issue 3)
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
www.tocpractice.com
Why we discuss
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
www.tocpractice.com
Why we suggest Diagonal Buffer for

some specific Production environments
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)
www.tocpractice.com

% of consumption
of PRESCRIBED elapsed time for this WO
When we need to measure two dimensions for every work order:

140%
BLACK ZONE
120%
100%
80%
60%
40%
20%
0%
0%
20%
40%
60%
80%
100%
% of WO content completion
www.tocpractice.com

% of consumption
History of two WOs day after day

140%
140%
120%
120%
100%
100%
80%
80%
60%
60%
40%
40%
20%
20%
0%
0%
0%
20%
40%
60%
80%
100%
0%
20%
40%
60%
80%
100%
The illustration is taken from Natalia Anisimova, Presentation at 14 TOCPA Conference in Moscow, Nov 2014
www.tocpractice.com

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 consumption

140%
BLACK ZONE
120%
100%
% of time consumption =
20%
80%
60%
40%
1 Apr
20%
0%
0%
5%
20%
40%
60%
80%
100%
www.tocpractice.com

2 April
By the end of 2 April
total 20 units were
produced.
content = 20/200=10%
2/5=40%
% of consumption

140%
BLACK ZONE
120%
100%
80%
60%
2 Apr
40%
1 Apr
20%
0%
0%
5%
20%
40%
60%
80%
100%
www.tocpractice.com

3 April
By the end of 3 April
total 100 units were
produced.
content = 100/200=50%
3/5=60%
% of consumption

140%
BLACK ZONE
120%
100%
80%
3 Apr
60%
2 Apr
40%
1 Apr
20%
0%
0%
5%
20%
40%
60%
80%
100%
www.tocpractice.com

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.
% of consumption

140%
BLACK ZONE
120%
100%
4 Apr
morning
80%
60%
3 Apr
2 Apr
40%
1 Apr
20%
0%
0%
5%
20%
40%
60%
80%
100%
www.tocpractice.com

4 April after overtime

on 4 April there were total
150 good units produced.
content = 150/200=75%
80%.
% of consumption

140%
BLACK ZONE
120%
4 Apr
after
overtime
100%
4 Apr
morning
80%
60%
3 Apr
2 Apr
40%
1 Apr
20%
0%
0%
20%
40%
60%
75%
80%
100%
www.tocpractice.com

5 April
By the end of 5 April all 200
units were produced and
accepted by quality control.
content = 200/200=100%
100%.
% of consumption

140%
BLACK ZONE
120%
4 Apr
after
overtime
100%
4 Apr
morning
80%
60%
5Apr
3 Apr
2 Apr
40%
1 Apr
20%
0%
0%
20%
40%
60%
80%
100%
www.tocpractice.com

Lets look at another

scenario
4 April after overtime
on 4 April ALL 200 good
units produced.
content = 200/200=100%
80%.
% of consumption

140%
BLACK ZONE
120%
4 Apr
after
overtime
100%
4 Apr
morning
80%
60%
3 Apr
2 Apr
40%
1 Apr
20%
0%
0%
20%
40%
60%
80%
100%
www.tocpractice.com

% of consumption
The whole picture at one glance the status of ALL OPEN

production work orders on a certain date
www.tocpractice.com

% of consumption
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?

JelenaFedurko - 16 TOCPA - April 2015 - South Africa - With Corrections

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www.tocpractice.

16th International Conference of the

April 23, 2015 Johannesburg, South Africa

Using diagonal buffer

Jelena Fedurko, TOC Strategic Solutions, Estonia

Copyright 2015 Jelena Fedurko & Oded Cohen

16th International Conference of the TOC Practitioners Alliance - TOCPA

16th International Conference of the TOC Practitioners Alliance - TOCPA

any reserve moneys, negotiable securities, legal procedures,

Copyright 2015 Jelena Fedurko & Oded Cohen

16th International Conference of the TOC Practitioners Alliance - TOCPA

Buffer in TOC in NOT something created in case something happens,

16th International Conference of the TOC Practitioners Alliance - TOCPA

What is Buffer in TOC

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

Copyright 2015 Jelena Fedurko & Oded Cohen

Set PER WORK ORDER

TOC Stock Buffer

Copyright 2015 Jelena Fedurko & Oded Cohen

16th International Conference of the TOC Practitioners Alliance - TOCPA

TOC Time Buffer for Production

Copyright 2015 Jelena Fedurko & Oded Cohen

16th International Conference of the TOC Practitioners Alliance - TOCPA

TOC Time Buffer for Production

it collects information for POOGI (SYSTEM ANALYSIS)

16th International Conference of the TOC Practitioners Alliance - TOCPA

When we need to measure TWO dimensions

Copyright 2015 Jelena Fedurko & Oded Cohen

16th International Conference of the TOC Practitioners Alliance - TOCPA

What is Diagonal Buffer?

For Production WO,

In CCPM the horizontal axis measures

For Production WO, the horizontal dimension measures the

16th International Conference of the TOC Practitioners Alliance - TOCPA

16th International Conference of the TOC Practitioners Alliance - TOCPA

Copyright 2015 Jelena Fedurko & Oded Cohen

16th International Conference of the TOC Practitioners Alliance - TOCPA

Copyright 2015 Jelena Fedurko & Oded Cohen

16th International Conference of the TOC Practitioners Alliance - TOCPA

16th International Conference of the TOC Practitioners Alliance - TOCPA

Why we suggest Diagonal Buffer for

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

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

16th International Conference of the TOC Practitioners Alliance - TOCPA

Why we suggest Diagonal Buffer for

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

Copyright 2015 Jelena Fedurko & Oded Cohen

16th International Conference of the TOC Practitioners Alliance - TOCPA

Why we suggest Diagonal Buffer for

History of two WOs day after day

16th International Conference of the TOC Practitioners Alliance - TOCPA

Why we suggest Diagonal Buffer for

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

Why we suggest Diagonal Buffer for

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

Copyright 2015 Jelena Fedurko & Oded Cohen

16th International Conference of the TOC Practitioners Alliance - TOCPA

Why we suggest Diagonal Buffer for

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

Copyright 2015 Jelena Fedurko & Oded Cohen

16th International Conference of the TOC Practitioners Alliance - TOCPA

Why we suggest Diagonal Buffer for

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