Session 18
Implementation of TOC
at Tosoh, SMD
Laura Blum
Production and Inventory Control Manager
1
Overview
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Why we chose Theory of Constraints
Overview of Theory of Constraints
Implementation
Results
2
Before TOC
• Manual scheduling using calendars &
guesses
• Rough understanding of run times
• No clear measure of capacity
• No ability to forecast upcoming capacity
constraints
• MRP system – poorly maintained
3
Why We Chose DBR
• Deliver product faster and more reliably
– Short Product Life Cycles (6-12 months)
• Maximize throughput of factory
• Better Utilization of Resources
• Reduced Finished Goods Inventory
– Increased flexibility
– Minimize obsolescence
4
Why We Chose DBR (continued)
• Minimize batch sizes
– Reduced cycle time
– Improved responsiveness
– Reduced WIP
5
Theory of Constraints
• Any manufacturing
system has a very limited
number of constraints
• The constraint limits the
output of the entire
system
• By controlling and
maximizing the output of
the constraint, you can
control and maximize the
output of the entire
system
6
TOC: Drum-Buffer-Rope
• Drum – Another name for constraint or “bottleneck”
– Detailed Schedule
– Reduce set-ups
– Maximize Machine availability
• Buffer – WIP to protect against variations in upstream
operations
– Represents time to resolve problems at upstream
operations
• Rope – “Pull Signal” – total of upstream processing time
and buffer time
– Ties drum schedule to customer requirement
– Ties material release schedule to drum schedule
7
Steps in TOC
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Identify drums
Establish buffers
Manage buffers
Exploit drums
Subordinate to the drums
Elevate the drum
Start over
8
Implementation
• The Drum – Scheduling
– Identify Constraints
– Identify First Day Loads
• The Buffer – Proactive Management
– Determine the Buffer Size
– Non-Drums operate in FIFO mode
– Buffer Management – Managing the
Exceptions
– Identify causes of buffer “holes”
9
Drum Schedules
10
Implementation
• Exploit the drums
– Work drums continuously
– Reduce set-ups
– Off-load work to non-drum work centers
• Subordinate everything to drum
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Staffing
Maintenance
Engineering Support
Run Non- constraints FIFO
Buffer coordinator expedites at non-constraints to
meet drum schedules
11
Implementation
• Elevate Drum – Increase Capacity
– Add Capacity
– Process Improvements
– Offload
• Start Over – Identify new constraint
12
Paradigm Shift
Traditional
Measure Efficiencies
Keep equipment
running
Focus on product cost
TOC
Measure Drum
Performance and
buffer attainment
Maximize Throughput
Revenue generated
per drum time
13
Implementation Process
• Change Company Culture
– Educate Personnel in DBR/TOC
– Eliminate Cost Accounting Based
Performance Measures (Productivity,
Efficiency, Product Cost, etc.)
– It’s O.K. for non-drums to be idle
– Company-wide, not just manufacturing
14
Implementation Process
(Continued)
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Began Manual DBR
Purchased software to assist
Developed Manufacturing Information
Ongoing effort to change company culture
15
Implementation Process
(Continued)
• Eliminate obstacles to flowing material
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Raw Material Availability
Sense of Urgency in People
Process Reliability
Equipment Reliability
Scrap
Batch Processes
16
Achievements
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Non-Precious Product Sales
Delivery Performance
Lead Times
Finished Goods Inventory
WIP
Reserves for obsolete inventory
+
+
-
14%
38%
14%
32%
14%
50%
17