Theory of Constraints — A Concise, Expert Management Briefing

Increased productivity On-time performance immunized against Murphy Lead times slashed up to 90% WIP slashed up to 90%

Synchronous Manufacturing

The TOC Production Solution is a scheduling and shop floor control technique called Drum-Buffer-Rope or DBR (strange name explained later). Synchronous Manufacturing, or Synchronous Flow Manufacturing, or Synchronous Management, are broader terms that include the the DBR approach but reflect a bigger-picture, whole-company synchronization. These terms date back to the pioneers who worked with Eli Goldratt before the Theory of Constraints was a formal technology (many are still active consultants and authors today, incidentally).

Synchronization

Even in a small manufacturing business, many different elements have to work together in-sync in order to generate the high levels of performance needed to prosper in these competitive times.

Synchronous Manufacturing provides the principles and detailed methods to synchronize all elements of the business towards the common goal of a for-profit manufacturing business – to make more money, now and in the future.

A Shop Schedule that actually remains valid

One aspect of the Synchronous Manufacturing implementation is a shop schedule that actually works – a schedule that remains valid despite "Murphy" – despite data inaccuracy, people being absent, machines breaking down, processes generating scrap. Synchronous Manufacturing schedules call for short lead times, fast flow, and low inventory yet are extremely robust. The scheduling approach is also typically fast to implement and while it can take advantage of existing software the approach usually does not depend on software.

However, Synchronous Manufacturing is far more than just a production system. It involves every aspect of the business – from sales and marketing through purchasing, production, shipping, accounting, R&D, HR, engineering, and QA – in working together to a degree that most managers can only imagine.

The approach works equally well for high-volume manufacturers or manufacturers of locomotives, for make-to-stock or make-to-order, for repetitive manufacturing or job shops, for large business or one-man garage manufacturers. It is truly a generic approach to high performance manufacturing.

Symptoms of poor synchronization ... "the norm"

The symptoms of poor synchronization typically include:

• Inventories are too high (at ALL stages where the company holds inventory)
• Lead times are too long
• Poor customer service, in terms of on-time delivery or service-from-stock
• Poor productivity
• Too much overtime
• Too much expediting
• Priorities constantly shifting
• Frequent materials and parts shortages
• Unable to quickly and easily respond to urgent customer requirements

Management’s frustrations are not only because of the poor performance but also because of the seeming contradictions:

• "How can we possibly have such lousy service when our inventories are sky-high?"
• "How come we’re paying for 1000’s of hours of overtime when our capacity report shows we have surplus capacity everywhere?"
• "How come we’re always ‘3 parts waiting on the 4th’ when our inventories are sky-high?"

The Results of Synchronous Manufacturing

In environments with these characteristics, Synchronous Manufacturing typically generates results such as these:

• Large improvements realized quickly, without wholesale improvement projects, capital acquisitions, or floor lay-out changes. Synchronous Manufacturing is tolerant of poor data, inaccurate data and missing data.
• Simple, intuitive measurements connect every decision and action in all departments to the bottom-line impact. Shop personnel, people in all departments, people at all levels of management use exactly the same vocabulary and measurements.
• Low inventory, fast-flow material movement. Finished Goods and WIP inventories often reduce by as much as 75%.
• Short cycle times, short promised lead times.
• Extremely high due-date performance or service levels. Synchronous Manufacturing users often receive "best supplier" awards for on-time performance.
• A shop schedule that protects due-date performance against disruptions, that people trust and rely on; also, that needs relatively little maintenance.
• Schedule that provides stability; priorities remain stable, expediting is at a minimum.
• Synchronous Manufacturing schedules typically require overtime only to respond to genuine problems or to opportunities to make more money.
• No sophisticated or expensive computer support usually needed.
• The approach generates a broad and deep buy-in from all managers, all functions, all levels. People at all levels are usually enthusiastic and impatient to get Synchronous Manufacturing up and running once they understand what it will do for them.
• Typically 25 - 40% additional capacity "found" in same resources.
• Clear basis for continuous improvement.
• Provides a framework for dealing routinely with urgent customer demands.
• Focuses other technologies you may have for maximum leverage and ROI.

The combination of increased output from the same resources along with greatly improved competitive performance and the potential for sales growth makes a Synchronous Manufacturing implementation very attractive. The impact of 20% to 40% more shipments each month, starting very soon after implementation starts yet with an unchanged level of operating expense inevitably has a dramatic impact on the bottom line and on a company’s cash position.

It should also be noted that large scale improvements can be gained even when the company’s starting point is a successful Just-In-Time implementation.