Apics Exam 1 Bscm- Wb Session 10

Front 1

TOC

Back 1

Theory of Contraints. a management philosphy and set of practices that is based on all systems being limited to create more due to a contraint.

Front 2

TOC focuses on

Back 2

improving the contraint. believes things only globally get better if the constraint is improved. its primary objective is to manage potential internal and external constraints no matter where they occus so that they do not become bottlenecks.

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two types of constraints

Back 3

1. throughput-based

2. behavior based

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Throughput-based constraint

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directly affect the rate at which a system generates revenue through sales of products. Contraints:

1. internal physical resource constraints- like machine, skill set, etc

2. external market constraint- insuffiecent demand for a product

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Behavior based constraints

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people-based. two common examples:

1. lack of understanding of the causes and effect of problems

2. not knowing where to start making the improvement

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Two sets of problem solving skills

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1. five focusing steps- used specifically to address throughput based constraints

2. thinking process- consists of 6 logic trees whose outputs answer: what should be changed? what should it be changed to? how should a change be created?

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VATI Analysis

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results in diagrams of the logical flow of materials from the raw stage to finished products- based on product routings and bills of material. Types: V-type; A-type; T-type; I type. pg 10-11 for details

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Steps to TOC

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1. identify the constraint

2. exploit the constaint (use the constraint to its maximum capability )

3. subordinate everything else to the constraint

4. elevate the constraint

5. find new constraint and start over.

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the drum

Back 9

creating a finite schedule for the constraint that will dictate the speed of the entire production line.

Front 10

Rope

Back 10

the communication system between the drum and the release of materials.

Front 11

3 types of buffers

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1. time buffers

2. stock buffers

3. protective capacity.

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buffer management

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a key control mechanism that allows CCR and shipping to stay on schedule. page 10-23.

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CCR

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Capacity Constrained resourse

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S-DBR

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Simplified Drum- Buffer- Rope- simiplified version of DBR used when the constraint is no longer internal. instead it is due to external market demands. the drum is located at shipping point and is based on market needs.

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throughput accounting

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a management account system for evaluating steps to elevate the constraint in TOC planning

Throughput (T)= Sales revenue-true variable costs (TVC)

basically, it relies on 3 global measures applied in a approach structure in the following order to analyze financial implications of business decisions:

1. throughput (T)

2. investment (includes inventory) (I)

3. Operating expense (OE)

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throughput

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the rate at which an organization generates monetary value through sales of a product or service.

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critical chain method

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method of project management which principles relateing to lead tiems, buffers, and resource constraints- inherent in TOC. pg 10-31 for more.

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TOC approach to distribution

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take advantage of pooling of inventory at a central location that will result in lower total inventory levels compared to holding inventory at multiple distribution centers. pg 10-33.