This abstract demonstrates how Theory of Constraints is adopted and adapted to assist a small MTO company which has been in the industry for more than 40 years and still has the aspiration to be an ever-flourishing company by deploying a software which has characteristics inherited from both S-DBR and CCPM.
The competitive advantage of the company is its ability to design, manufacture and market plastic bins and planters with customised moulded in graphics and wide range of colours for customers to choose from. Another competitive advantage is the acceptance of small quantity orders from customers, with majority of the orders having quantity of less than 50 units per order. These competitive advantages pose a challenge to the company which utilises rotary moulding machines and still heavily human labour dependant. Other than the commercial part of business which is handled by Sage system, the core function of the business: the manufacturing process, is managed manually. The manufacturing setup is product dependent, with rotary moulding machines being a heavily shared resource. It has a complex matrix setup of ‘product’ vs ‘mould’ vs ‘machine’ with some having different sequencing and resource utilisation time. In addition, the touch time is significant.
Figure 1 below shows the manufacturing process which appears to be simple by the number of workstations involved, but rather challenging in identifying the TOC tools which ‘fits’ the contextual requirement of the company.
Figure 1: Manufacturing Process Flow
What to Change?
The major constraint in the path to being ever-flourishing, as shown in the cause-effect diagram in |Figure 2 is identified as ‘the pressure on senior management’s time’ where senior managers are deprived of time to focus on market exploitation and exploration. The root cause is identified as the absence of an integrated information system.
Figure 2: Cause and Effect Diagram
What to Change To?
Underpinned by the TOC philosophy, the design of integrated information system has to be subordinated and thus aligned to the overall business strategy. This covers the entire process starting from the quotation of promised delivery date till the dispatch of goods to customer.
Figure 3: TOC is used to align the strategies
How to Change?
A production planning and control software is developed and integrated with existing Sage system with the adoption of S-DBR where Market acts as the drum. Simple heuristic algorithm is developed to monitor the Plan Load (PL) of potential CCR (Capacity Constraint Resources), which in this case are possible positions of the rotary machine and the relevant mould. By utilising the existing standard industrial accepted lead time, aggregated variability pooling is utilised where Buffer Management (BM) is placed towards the end of the process. As touch time is significant, together with the BM and PL it is firstly being used in the pre-order stage to determine the promised due date. If touch time on CCR is less than half of the buffer, standard lead time will be quoted. However, if the touch time exceeds half of the buffer, as depicted in Figure 4, an additional 5 days buffer will be quoted. Secondly, once an order is confirmed, in the manufacturing stage, touch time and CCR usage is monitored daily and prioritised according to the BM which is placed right at the end of the process. Thirdly, it provides Choke and Release functionality where Work-orders are only released when its BM colour reaches ‘Green’. This creates a natural ‘pooling’ function for potential similar ‘products’ to be manufactured together, thus machine setup time.
Benefits to the Company.
- The visibility of resource utilisation provides management the confidence to develop relevant business strategies to increase company throughput
- Able to quote and meet reliable due dates
- Work-orders progress is prioritised and monitored with feedbacks from the shop floor
- Provide visibility to management by exposing hidden resource capacity and provides relevant signals to make informed decisions to manage potential CCRs such as by increasing number of shiftsAllows experienced shop floor personnel to make informed decisions to manage resources
- Creates a platform for Process of On-going Improvement (POOGI)
- Avoids unnecessary spending on IT expansion and increase relevance of IT to the overall company operation