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Constraint Management
Constraint Management
Managing Constraints
7. Every capital investment must be viewed from the perspective of its global impact
on overall throughput (T), inventory (I), and operating expense (OE).
Identifying the Bottleneck
7
Identifying the Bottleneck
Demand
Utilization = 100%
Maximum capacity
Index of job
Gantt Chart for loan processing
Product A
Raw materials
$6 Purchased part
Product B
Raw materials
$5 Purchased part
Product C
Raw materials
$5 Purchased part
Determining Product Mix
The senior management at O’Neill Enterprises wants to improve the
profitability of the firm by accepting the right set of orders.
Allocation by contribution margin: Decisions are made to accept as much
of the highest contribution margin product as possible (up to the limit of its
demand), followed by the next highest contribution margin product, and so
on until no more capacity is available.
Is this optimal?
Constraint CCR
Nonconstraint
Buffer (Bottleneck)
Shipping
Nonconstraint
Buffer
Line Balancing
– Assignment of work to stations in a line so as to achieve the desired
output rate with the smallest number of workstations
– Achieving the goal is similar to the theory of constraints but it differs in
how it addresses bottlenecks
S T U S precedes T, which
precedes U.
S S and T must be
U completed before U
can be started.
T
Diagramming the Network
T
T and U cannot begin
S until S has been
U completed.
D
H
B 40
20
30 E
6
A
F
40 C
25
50
I
18
G
15
A Line Process
1
c=
r
where
c = cycle time in hours
r = desired output rate
A Line Process
t
TM =
c
Idle time = nc – t
t
Efficiency (%) = (100)
nc
A. First convert the desired output rate (2,400 units per week) to an
hourly rate by dividing the weekly output rate by 40 hours per week to
get units per hour. Then the cycle time is
t 244 seconds
TM = = = 4.067 or 5 stations
c 60 seconds
Calculating Cycle Time, TM, Efficiency
t 244
Efficiency = (100) = = 81.3%
nc 5(60)
Finding a Solution
The work content for each station is equal (or nearly so,
but less than) the cycle time for the line
Finding a Solution
HEURISTIC DECISION RULES IN ASSIGNING THE NEXT WORK ELEMENT TO A WORKSTATION BEING
CREATED
Create one station at a time. For the station now being created, identify the unassigned work elements that
qualify for assignment: They are candidates if
1. All of their predecessors have been assigned to this station or stations already created.
2. Adding them to the workstation being created will not create a workload that exceeds the cycle time.
Most followers When picking the next work element to assign to a station being created, choose
the element that has the most followers (due to precedence requirements). In
Figure 7.4, item C has three followers (F, G, and I) whereas item D has only one
follower (H). This rule seeks to maintain flexibility so that good choices remain for
creating the last few workstations at the end of the line.
Fewest followers Picking the candidate with the fewest followers is the opposite of the most
followers rule.
Finding a Solution
D
H
B 40
20
30 E
6
A
F
40 C
25
50
I
18
G
15
Managerial Considerations
Pacing is the movement of product from one station to the next as soon
as the cycle time has passed.
Behavioral factors such as absenteeism, turnover, and grievances can
increase after installing production lines
The number of models produced complicates scheduling and
necessitates good communication
Cycle times are dependent on the desired output rate