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127 Cards in this Set
- Front
- Back
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A common-sense, scientific-based approach that systematically transforms run-of-the-mill companies into world-class competitors.
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Synchronous Management
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Singificant results were realized in the initial period as operating procedures and performance measures were realigned to achieve business objectives. This initial phase was followed by a sustained and continuous improvement phase where, in a systematic fashion, physical and policy constraints were identified and resolved, driving performance to ever higher levels.
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Results werre generated in two distinct phases.
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One, their order volume was trailing off as a result of a soft economy.
Two, key customers were adopting more effective production management systems, and demanding faster and more reliable deliveries and more rigorous cost controls. |
Two Major Challenges for Aerospace
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The company reorganized its management structure to include product flow teams and realigned its performance measurement systems to support greater speed and reliability of delivery.
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Furniture manufacturer
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1. Markets are global and highly competitive. This requires that organizations achieve peak performance in both customer responsiveness and asset productivity.
2. The creation and delivery of products and services to the customer require the management of interdependent activites which involve multiple resources from multiple functions. |
Two elements that all business organizations must deal with:
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Synchronous Management can be described as...
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a management philosophy that views the resources and activities of an organization as elements of an interdependent network, and manages them in such a way as to optimize the current and future performance of the entire organization.
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The framework for achieving peak organizational performance has two key elements:
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1. Systematic techniques that maximize current profitability through the most effective utilization of current assets and resources.
2. Systematic processes that strategically focus and drive continuous improvement initiatives. |
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The principles of Synchronous Management are based on the simple, but very powerful, concept that...
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Organizations must understand and manage the elements that limit their performance capabilites.
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Business processes, by definition, consist of...
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A series of interdependent tasks with specified inputs used to accomplish specified outcomes.
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Optimal performance is a must in today's marketplace, and ...
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Constraint management is a must to achieve optimal performance.
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The greater the amount of time that passes in the production and sale of a product...
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the less is the value of that which has been produced.
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In most successful organizations, the ________ is a prime objective
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Elimination of Waste
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We define waste as...
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anything within a manufacturing environment that is in excess of the minimum amounts of materials, parts, equipment, facilities, labor, and times that are essential to produce and deliver the desired product and service to the customer.
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In 1926, Henry Ford's book...
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Today and Tomorrow
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Today and Tomorrow describes...
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his manufacturing facility konwn as Fordson
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"The time element in manufacturing stretches from...
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the moment the raw material is separated from the earth to the moement when the finished product is delivered to the ultimate customer."
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Henry Ford realized that...
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time is something that erodes the value of the product.
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"Having a stock of raw materials or finished goods in excess of requrements is...
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waste."
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Ford's writings and actions indicate that his definition of what constituted material waste included more than just raw materials and finished goods. It clearly included...
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work-in-process inventory.
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He recognized the importance of eliminating...
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all possible waste within the manufacturing environment and designed the Ford industrial structure accordingly.
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Henry Ford's philosophy of management and productivity:
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‣ Advantage of a FULLY INTEGRATED MANUFACTURING SYSTEM
‣ Importance of PREVENTIVE MAINTENANCE ‣ Necessity of GOOD MATERIAL CONTROL ‣ The role of QUALITY AND INSPECTION ‣ The role of LABOR |
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"They can have it in any color they want, so long as it's black."
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Black was selected because the black paint dried faster than othe colors of paint.
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The most efficient forms of production are...
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Continuous flow processes like those found in refining, bottling, or extrusion processes.
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To emphasize the importance of product flow:
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"The thing is to keep everything in motion...That is the real principle of our production."
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The key to the elimination of waste in a manufacturing firm lies in...
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management's ability to develop and maintain a synchronized flow of materials and products into, through, and out of the plant in concert with market demand.
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The degree to which the material and product flow of a plant can be synchronized determines...
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the degree to which waste can be eliminated and, therefore, the degree to which the plant can be competitive in the marketplace.
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Why did some U.S. companies fail and others succeed?
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The difference was not automated production systems, robots, cheap labor, nor a superior work ethic. Care must be taken to prevent those and other largely insignificant variables from muddying the water and obscuring the more fundamental and most significant explanation.
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The worldwide demand for products was great and domestic manufacturers had tremendous capacity and little foreign competition. Such conditions...
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naturally encouraged wasteful practices and allowed unsound managerial policies to evolve slowly.
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The focus of many organizations shifted to meeting market demand at any cost. Production costs...
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were of little consequence since there was not much competitive pressure and prices could usually be raised to cover increasing costs.
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The information needs for internal decision making are...
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far different from the information requirements for external financial reporting.
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Publicly owned U.S. firms have also been well-known for...
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having a relatively short-term focus compared to foreign-owned companies.
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The long-term strategy of many foreign corporations was one of capturing market share by...
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improving quality and productivity, and by being price competitive. It was inevitable that U.S. companies were in for a rough ride.
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Manufacturers that do little or no manufacturing and are increasingly becoming service oriented. They may perform a host of profit-making functions--from design to distribution--but lack their own production base. In contrast to traditional manufacturers, they are...
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hollow corporations.
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The hollowing phenomenon is a symptom of the inability of American firms using traditional and commonly accepted manufacturing practices to...
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compete with foreign companies.
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Some firms viewed the hollowing process as a way to remain profitable in the short term.
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But in the long run, it could only have disastrous results for the U.S. economy.
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We found that the most successful U.S. manufacturing companies have one common trait.
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They all have good management practices, particularly for the management of work flow.
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A management approach that views the resources and activites of an organization as elements of an interdependent network, and manages them in such a way as to optimize the performance of the entire organization.
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Synchronous Management
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Synchronous Management can produce rapid improvements in most manufacturing environments because...
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it provides the means to identify and focus on the commong goal of the firm.
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Three Major Elements of Snychronous Management:
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1. Define the common goal in terms that are understandable and meaningful to everyone in the organization.
2. Develop the cause-effect relationship between individual actions and the common global goal. 3. Design operating systems and procedures that maximize the performance of the business as a whole. |
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Synchronous Management is a...
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management philosophy that provides the umbrella under which all other programs, such as automation and quality improvement, should be implemented.
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The Synchronous Management approach provides the framework for correctly addressing key questions such as:
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☻ Which programs are appropriate for achieving the firm's competitive goals?
☻ What areas of the plant offer the greatest opportunity for improvement? ☻ Where should programs/change be implemented first? ☻ What is the impact of the proposed change on the company as a whole? |
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Our experience is that our traditional cost-based systems do not...
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provide very reliable answers to these questions.
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Companies gain a competitive advantage in one of three ways:
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(1) by providing superior customer service
(2) by offering better quality products (3) by being the low-cost producer |
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A nonsynchronized flow environment is...
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characterized by systems where products have long manufacturing lead times, and materials spend a large amount of time waiting in queues as work in process.
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A synchronized flow environment is...
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characterized by systems where products have relatively short manufacturing lead times, and materials spend very little time waiting in queues.
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One key point of comparison between these two manufacturing environments:
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☻A nonsynchronized flow environment gives rise to high work-in-process inventories and long manufacturing lead times.
☻Conversely, the synchronized flow environment is characterized by low work-in-process inventories and short manufacturing lead times. |
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Synchronous production is also referred to as...
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lean production
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Three basic elements of competitive edge:
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☻Customer Service
☻Quality ☻Cost |
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Two critical measures of customer service are...
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☻Delivery lead times
☻Due-date performance |
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The manufacturing lead time for any order is roughly proportional to the amount of work-in-process inventory (WIP) queued up in front of that order. Thus...
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the lower the level of WIP that is carried within any system, the shorter the manufacturing lead time for that system.
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From the perspective of gaining the competitive edge in the marketplace, it is not necessary that delivery lead times be zero.
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It is sufficient that a firm's lead time be less than its competitors' lead times.
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In order to maintain a strong base of repeat customers, companies must...
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alos make good on their promised delivery dates.
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A firm's on-time delivery performance is also...
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a function of the manufacturing lead time.
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Actions taken in the name of quality should...
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focus on improving the process.
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Dr. Deming insisted that quality cannot be inspected into a product...
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quality must be built in.
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This represented a significant departure from the almost universal practice of...
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inspecting defective parts out of the process.
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When the Japanese discover a defect, an interesting chain of events sets in.
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(1st) in order to avoid cover-ups, workers are not reprimanded when a mistake is made
(Then), with the assistance of the workers, the cause of the defect is tracked down. (Finally), corrective actions are carefully evaluated and implemented in order to reduce the likelihood that the problem will recur. |
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If the same malfunction occurs in the perfectly synchronized flow environment...
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then due to the extremely short lead times, it is likely that the initial work center is still in the process of producing the defective units.
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In order to be the low-cost producer in the market...
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all aspects of the operation must be effectively managed.
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Two variables that bear heavily on the cost of the product are:
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❍Operating expenses
❍The required level of investment in plant and equipment |
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It is a common occurrence in many plants that the last one or two operations in the process have...
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the most capacity in the entire plant.
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Synchronous Management Principle 1
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Do not focus on balancing capacities, focus on synchronizing the flow.
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Synchronous Management Principle 1a
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Focus on the flow of work and not on the efficiency of individual tasks.
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Synchronous Management Principle 1a requires that managers...
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spend their energies on the flow of the product through the entire process and not be overly concerned with the efficiencies of individual departments.
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Synchronous Management Principle 2
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The marginal value of time at a bottleneck resource is equal to the throughput rate of the products processed by the bottleneck.
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Synchronous Management Principle 3
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The marginal value of time at a non-bottleneck resource is negligible.
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Synchronous Management Principle 4
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The level of utilization of a non-bottleneck resource is controlled by the constraints of the system.
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Synchronous Management Principle 5
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Resources must be utilized, not simply activated.
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Resources with excess capacity will be referred to as...
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non-bottleneck resources
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Resources with no excess capacity are termed...
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bottleneck resources
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Bottleneck Resource
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Any resource whose capacity is equal to or less than the market demand placed upon it.
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Non-Bottleneck Resources
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Any resource whose capacity is greater than the market demand placed upon it.
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Run Time
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"Time required to process a piece or lot at a specific operation. Does not include set up time."
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Setup Time
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"The time required for a specific machine, resource, work center, or line to converty from the production of the last good piece of lot A to the first good piece of lot B."
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Idle Time
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Time not used for performing a setup or processing (running) material.
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Waste Time
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Time spent processing materials that cannot be converted into throughput. This may include products of unacceptable quality, work-in-process materials that are not scheduled or needed, or finished goods for which there is no immediate demand.
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Bottleneck resources determine...
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the throughput of the plant.
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Throughput Capacity
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The amount of a resource's capacity that is needed to directly support the throughput of the plant.
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Protective Capacity
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The amount of a resources capacity that is necessary to maintain the integrity of the schedule by providing recovery capability.
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Excess Capacity
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The amount of a resource's capacity that is in excess of the throughput and protective capacities. This capacity can be safely eliminated without affecting the integrity of a plant's schedule.
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Total Capacity=
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Throughput Capacity + Protective Capacity + Excess Capacity
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The Five Basic Resource Interactions:
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(1) Product flows from Bottleneck to Non-Bottleneck
(2) Product flow from Non-Bottleneck to Bottleneck (3) Product flows from Non-Bottleneck to Non-Bottleneck (4) Product flows from Bottleneck to Bottleneck (5) Product produced by Bottleneck & Non-Bottleneck are both required at Assembly |
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Activation
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The employment of a resource to process materials or products.
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Utilization
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The employment of a resource to process materials or products that contribute positively to the performance of the company--throughput.
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To be utilized, a resource must be activated, but...
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a resource can be activated without being utilized.
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When a resource is activated beyond the requirements of utilization, it is said to be...
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overactivated.
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Utilization is, by definition...
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a subset of activation.
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In the terminology of Synchronous Management, two resources interact with each other if...
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the activity at one resource influences either the activit or the result of the activity at the other resource.
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Lack of progress can be traced to two main causes:
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(1) Constraints are not explicitly identified and managed.
(2) Most mangers do not have a clear understanding of how to achieve a synchronized work flow in a complex and dynamic environment. |
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Constraint
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Any ELEMENT that limits the organization from achieving higher levels of performance, where performance is measured in terms of the organization's goal.
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The key idea is that whichever part of the organization is least able to perform its required duties is the...
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constraint of the organization.
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Given that the existence of constraints is inevitable, what guidlines can management be provided to deal with them?
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(1) The immediate and short-term need should be to make sure that the organization performs to the maximum limit established by the constraints.
(2)The longer-term need is to raise the performance of the organization to levels above the limit set by the constraints. |
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The three categories of constraints are?
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❍Physical Constraint
❍Market Constraint ❍Policy Constraint |
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Physical Constraint
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A constraint which is physical and tangible in nature and is easy to recognize as a constraint. (Includes machine capacity and capability, staff availability and capacity, material availability and quality, space availability, etc.)
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Market Constraint
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This constraint exists when the demand for the company's products and services is less than or equal to the capacity of the organization, or in some other way limits the bottom-line performance of the company. (Includes the demand from current customers for the company's different products and services.)
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Policy Constraint
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A constraint which is not physical in nature. (Includes the entire system of measures and methods and even the mindset that governs the strategic and tactical (day-to-day) decisions of the organization.
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Capacity Constraint Resource (CCR)
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Any resource whose available capacity limits the organization's ability to meet the product volume, product mix, or demand fluctation required by the marketplace.
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Material Constraints
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A material constraint exists when the availability of material is less than or equal to the amount needed to maintain the planned product flow and to satisfy market demand.
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Material Consumption
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The consumption of material to support activation of a resource.
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Material Utilization
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The consumption of material at a process that supports the throughput requirements.
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Market Constraints
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A market constraint exists when the demand for the company's products and services is less than or equal to the capacity of the organization, or in some other way limits the bottom-line performance of the company.
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The ultimate constraint on a manufacturing firm is...
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the market.
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Managers must avoid falling into the trap of saying that what happens in the market is outside of their control. There are two fundamental ways of addressing a market constraint:
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(1) Capture more of the current markets served
(2) Expand into new markets |
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Mindset refers to
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the though process or culture of the organization.
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Techniques For Optimizing Capacity Constraints
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❍Eliminate periods of idle time
❍Reduce setup time and run time per unit ❍Improve quality control ❍Reduce the workload ❍Purchase additional capacity |
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Techniques For Optimizing Material Constraints
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❍ Reduce (and eventually eliminate) yield losses
❍Reduce misallocation ❍Redesign product to improve material usage ❍Purchase alternate material (or develop alternate sources) |
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The task of identifying constraints should follow a diagnostic procedure...
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use expected consequences to identify the cause--rather than by relying on analytical procedures.
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The physical constraints that are the result of policy constraints are called?
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Pseudo-Constraints
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Policy constraints can best be described in terms of the 3 M's
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❍The Mindset
❍The Measures ❍The Methods |
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In reality, the capacities of individual resources in any manufacturing operation are not balanced. This is the result of two facts:
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(1) Capacity comes in finite increment
(2) Dependency and variability force managers to unbalance their plants. |
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Goldratt reasoned the output of a system was limited by...
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the output of the bottleneck operation(s).
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It was essential to schedule the nonbottleneck operations in a way...
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that minimized the idle time of the bottleneck operation(s).
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Drum-Buffer-Rope
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"Drum" is the schedule; it sets the pace of production.
"Buffer" refers to potentially constraining resources outside of the bottleneck. "Rope" represents the synchronizing of the sequence of operations to ensure effective use of the bottleneck operations. |
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The role of the buffer is...
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to keep a small amount of inventory ahead of the bottleneck operation to minimize the risk of having it be idle.
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The goal of the rope is...
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to avoid costly and time-consuming multiple setups, particularly of capacity-constrained resources, so they do not become bottlenecks too.
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The goal of the drum is...
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to schedule to make maximum use of bottleneck resources.
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The drum-bufffer-rope approach provides?
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A basis for developing a schedule that achieves maximum output and shorter lead times while avoiding carrying excess inventory.
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Process batch
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denotes the basic lot size for a job
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Transfer batch
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denotes a portion of the basic lot that could be used during production to facilitate utilization of bottleneck operations.
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Splitting a large lot at one ore more operations preceding a bottleneck operation would...
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reduce the waiting time of the bottleneck operation.
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The theory of constraints has as its goal...
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maximizing flow through the entire system, which it does by emphasizing balancing the flow through the various operations. It begins with identifying the bottleneck of the operation.
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Five-step procedure to improve the performance of the bottleneck operation:
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(1) Determine what is constraining the operation.
(2) Exploit the constraint (3) Subordinate everything to the constraint (4) Determine how to overcome the constraint (5) Repeat the process for the next highest constraint |
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The goal is...
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to make money.
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Three metrics to assess the effectiveness of improvements:
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(1) Throughput
(2) Inventory (3) Operating Expense |
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Throughput
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The rate at which the system generates money through sales
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Inventory
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Represents money tied up in goods and materials used in a process
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Operating expense
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all the money the system spends to convert inventory into throughput
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