Understanding Optimized Production Technology

Understanding Optimized mathematical product TechnologyDrum-Buffer-Rope (DBR) is the Theory of Constraints (TOC) fareance cooking regularityology originated by Eliyahu M. Goldratt in the 1980s. In event, the concepts of DBR actu onlyy preceded the Five-Focusing-Steps and the nonion of the with ascribe world in the development of the TOC paradigm. trance the DBR method is much simpler than the older Optimized proceeds Technology ( opt) algorithm and the new Advanced plan and computer curriculumming (APS) administrations, for m some(prenominal) a(prenominal) takings environments, especially those not currently- or inhabitently- dominated by an active internal stymy, an stock-still simpler method notify be adopted. We call this method S-DBR, to distinguish it from the traditionalistic model, which strong refer to as traditional DBR.S-DBR is ground on the same concepts as traditional DBR and is certainly in harmony with TOC and the Five Focusing Steps. What disting uishes it from traditional DBR is its assumption of market enquire as the major re primary(prenominal)s constraint, even when an internal capableness constraint temporarily emerges.S-DBR open fire be tardily supported by traditional ERP/MRP outlines and it is proper(postnominal)ally in liquifyed to deal with move market pauperization.Optimized Production Technology ( select)1. What is Optimized Production Technology?2. What is the aim of Optimized Production Technology?3. What are the main features of select?4. How prefer can be substantial?5. How OPT is operated?6. What are the benefits achieved from OPT?DEFINITIONOptimized production engineering is proprietary plan organization using, discipline processing system software system product which was originally developed by Dr. Eliyahu Galodratt and colleagues who recognized that iodin of the most heterogeneous problems facing manufacturing organizations was that of mark-floor computer programming.The system is b ased on the concept that there are 2 constitutional manufacturing phenomena Dependent events. entirely transites rely upon the completion of preceding surgical procedures. Statistical fluctuations. bear on sequences fluctuate around an mediocre.The effect of these phenomena is that the depicted object of a full treatment must be unbalanced and therefore blocks are inevitable.As delimit by Johnson, the OPT method of computer programing dictates that material should only be launched on to the shopfloor at the rate at which it is consumed by the bottleneck.Further much, a time buffer of work should protect the production in the bottleneck.This direction, that work plan for day triplet arrives on day one, creating a buffer of two days as protection against disruption in operations to begin with the bottleneck.AIM OF OPTThe aim of OPT is to schedule bottleneck capacity in an efficient fashion. This schedule is the senior pilot for the demand set(p) on other capacities.M AIN FEATURES OF OPTThe main features of OPT are set forth by Fax as follows relief flow not capacity.The aim of custom of any part of the system, which is not a bottleneck, is dependent on other constraints in the system, not the potential of the worker.The utilization and activation of a imaginativeness are not synonymous.An min lost at the bottleneck is an hour lost for the total system.An hour saved at a non-bottleneck is exactly a mirage.Bottlenecks govern both doneput and inventories.The transfer quite a little may not, and many times should not be equal to the emergence batch.The operation batch should be variable, not fixed.Schedules should be established by flavour at all the constraints simultaneously. Lead times are the results of the schedule and cannot be predetermined.DEVELOPING OPTThe paces utilize to develop OPT consist of the followingPreparation. Measuring performance, project planning and identifying hardware and software requirements. ve narrowation analysis. Analyzing the manufacturing processes and how they are managed.Bottleneck analysis. (A bottleneck is defined as a imagination where capacity is equal to or less than the demand being displace upon it.) This is conducted by analyzing work in progress and shortages vs. excesses (potential bottlenecks are those visions which appear on the shortage list but not the excess list).Computer modeling. This is the process of developing the engineering network and instructing the OPT scheduler how to interpret details concerning the make bulge of products much(prenominal) as dependent set-ups, critical material, fixed batch quantities, maximal batch quantities, consumable tools, rework and uninterruptible processes. Data impart be feed into the model concerning routines, bills of material and customer demand.Data definition. Establishing what data is postulate to be fed into the system.Defining outputs. The output ordain be a master production schedule (MPS), which is achie ved by constraint capacity planning. This provides the basis for the process of demand watchfulness using the OPT software to carry out the computer programming the OPT identifies the relevant demand and controls the build accordingly.OPERATING OPTOPT is operated through OPT software which has been developed to control labyrinthian manufacturing processes. The software will model the process and produce the schedules in the physical body ofmaterial and capacity plans using the OPT bottleneck forward-loading technical schoolniques. The shopfloor control system will then monitor progress against the schedule and initiate any fill to overcome shortfalls.BENEFITSThe benefits claimed for OPT are that it will schedule finite resources in order to achieve maximum factory effectiveness.The scheduling systemAddresses the primeval problem of bottlenecks.Improves profitability by simultaneously increasing throughput.Reduces inventory and in operation(p) expenses.Manufacturing Strate gy federal agency 6 Optimised Production Technology (OPT)IntroductionOPT is possibly the most radical of the 3 production strategies to be discussed as it requires a new way of thinking, not only round production but overly about the basic accounting principles. In many areas this demands radical or revised thinking by our accountants and new comees to the bedrock of accounting.OPT begins by stating that the goal of a manufacturing trade is to make bullion both now and in the future. This might seem to be quite simple but it provides a framework for all the other decisions multiform in the lineage.The aim of OPT is to increase throughput (the rate at which the confederation generates coin through sales) whilst simultaneously decreasing inventory and operating expense. If an achieve does not directly meliorate one of the three measures then it is irrelevant at best and damaging at worst, do not do it.The traditional approach has been to optimise severally sub-system irrespective of its importance (i.e. to improve the output of the welder) but the OPT approach is to optimise the total system to maximise throughput (i.e. if the welder is not limiting your throughput then dont work on it and put your efforts somewhere else). OPT states that the optimal of apiece sub-system is not necessarily the optimum of the square system.OPT defines a bottleneck as any resource whose capacity is equal to or less than the market demand placed upon it. The bottleneck is thus the constraint that is preventing increased throughput from your factory. Improvements here will tend to optimise the tout ensemble system and spend a penny an increased payback by directly increasing throughput. Bottlenecks are easy to spot in the average factory they are the operations that thrust lots of work in progress stacked up in attend of them. In this brain a non-bottleneck is any resource whose capacity is greater than the market demand placed on it and improvements here will be irrelevant in embody of increased throughput.Figure 1 Spotting the bottlenecksOperation C is the obvious bottleneck for the factory. Running A at capacity will lead to a build up of inventory in drive of B. Running B at capacity will lead to a massive build up in inventory in front of C. Investment or improvement in A, B or D will do goose egg to improve throughput, the only meaningful investment funds area would be C where the ability of the plant to earn money can be rapidly improved.Operation C must be protected from loss of output for any argue. It is the operation that controls the income of the factory. In humanity the choice is never this clear and the important thing is to balance the flow and not the capacity.The bottleneck concept is best explained in the hiking analogy from The Goal. The pelt along of a group of hikers affects to be maximised to get to the campsite by nightfall but the actual speed of the screwly group is circumscribed by the speed of t he slowest hiker (the bottleneck). Placing the slowest hiker at the front of the group slows experience the whole group and increases the time required i.e. reduces the throughput. Placing the slowest hiker anywhere else in the group still slows the whole group and also increases the length of the group (the inventory).Thus the only way to reduce the length (the inventory) and achieve the fastest transit time the throughput) is to dislodge a way of mournful the slowest hiker faster i.e. working(a) on the bottleneck. An hour lost at a bottleneck, for any reason is an hour to the whole system and cannot be re spawned. Dont think you can get it back later because the way we defined a bottleneck means that you cannot. The follow for this lost hour is the total cost of carry throughning the whole factory for one hour, after all the bottleneck is governing the throughput. grinder scheduling is at the heart of OPT and a critical factor in this is the location and elimination or vig ilance of bottlenecks, a fact which is not explicitly dealt with by JIT. The set up time drop-off techniques of JIT appear again but are not formally recognize by OPT. An hour saved in the set-up time of a bottleneck is an hour saved for the whole system. OPT goes on to say that an hour saved on a non-bottleneck machine simply increases inventory and does nothing to improve throughput. It is wasted effort, so dont do it.In a horse sense OPT shares a lot of philosophy with JIT and both concentrate on theatrical role, lead times, lot sizes and machine set-up times. A major difference is that OPT regards the river and rocks analogy of JIT as being fundamentally flawed. In OPT terms the river is not the flat evenly flowing stream that JIT assumes but has waves on inventory moving through it depending on the order situation in the factory.All can be fine until the inventory is at the gutter of a wave. If you hit a problem then it is likely to snag the bottom out of the boat and sin k the business The OPT approach is much to a greater extent like reality than the JIT approach in this situation, in other words dont take any analogy too furthest. An primal rule forgotten at your peril.Figure 2 The OPT check of rocks in the riverIn the same way OPT shares a computer based approach with MRPII and both require a large complex database of product and machine t from each oneing for schedule calculation. OPT also requires information on how the product is made, the route through the factory and both set-up and run times. OPT can generally pirate a lot of this information from an existing MRPII system. matchless problem with MRPII is that it ignores the in-build variation of any machine and assumes that a machine will work at capacity at all times. OPT is much realistic in accepting that the actual capacity is affected by statistical fluctuations and a dependence on preliminary operations to bring product for processing. In many cases this makes MRPII scheduling impractical and time buffers are built in to cater for this. OPT can be much realistic in scheduling than MRPII by winning this into account and also permiting for improvement in times and routing.OPT is based on a set of rules which need to be adopted completely by management and basic statements are incorporated into these rules.The OPT rulesBalance the flow, not the capacity.Let bottlenecks determine usage of the non-bottlenecks and do not attempt machine utilisation. If a resource is activated when output cannot get through the constraint then all it produces is inventory.Utilisation and activation of a resource are not the same thing. Activation is when a resource is working but utilisation is when it is working and doing useful work. Producing stock for inventory is not useful work.An hour lost at a bottleneck is an hour lost for the whole system and cannot be recovered.An hour saved at a non-bottleneck is a mirage.Bottlenecks govern both throughput and inventory.A trans fer batch is not necessarily equal to a process batch i.e. just because you have to cut 20 frames at a time on the optimiser saw it does not mean that you have to push them all on to the welder at one time. You can break the process batch (20 frames) down into small transfer batches (1 order).Process batches should be variable and not fixed. later on work shows that the best results are achieved by using a drum-buffer-rope technique to control the system. You must first find the true bottlenecks that govern the factory throughput.The bottlenecks that beat out the pace like a drum for the whole factory should be kept fully scheduled and working at all times. The bottlenecks must be protected against any interruption caused by breakdowns, quality, set-up times, labour concerns or any other variation. This protection is achieved by edifice in time buffers. These are a focus for process improvements. All other operations are then synchronised to the bottleneck operation and work is pu lled through as if it were on a rope.Without computers the drum-buffer-rope concept whole works very considerably for limited variety production. The introduction of variety leads to switching bottlenecks and the need for complex computer software to run the system.OPT requires maximising the flow of materials and rarely requires large investment in machinery or restructuring of the plant. By improving the flow of the product OPT seeks to get inventory moving and can make an immediate financial blow. OPT needs to be carried through to the whole phoner and encourages the view of the production area as a real profit maker for the company.For and AgainstForQuickly targets areas of concern (bottlenecks, quality set up times, high inventories).Incorporates some production and MRP.Quick results.Gives financial feedback.Suitable for discrete, batch and process industries.Possible to grow into via partial death penalty at a practical level.Easily understood by the shop floor.Against Challenges traditional cost accounting.Requires simulation modelling of the process.Needs good database. essential go via one consultancy company.SummaryOPT is relatively new in terms of production management systems and is an overall philosophy for running the business rather than simply being about production management. OPT starts by assuming that manufacturing is all about making money and looks at optimising the complete system to achieve this rather than just optimising individual operations on a piecemeal basis.OPT is a proprietary system in the full version (rather than just the philosophy) owned by a software and consultancy company. This does not prevent the adoption of some of the excellent ideas it contains and generates.OPT is a trademark of the plan Technology Group. The only, but excellent, book on the discipline is The Goal by E Goldratt and J Cox.In the previous pages we have looked at 3 different methods of production management and have reviewed the meaning(a) areas for improvement and remove. As an overall summary MRPII does not seek to change anything whereas JIT actually forces a fundamental but painful search for excellence. OPT is probably even to a greater extent powerful because it uses many of the JIT ideas and also follows through into the overall system. The current strategy of many companies uses a blend of these three main methods at various points in the company to achieve the correct blend of success.The Manufacturing Strategy SeriesThe Manufacturing Strategy series is designed to eliminate production managers and their staff some insights into new manufacturing methods and to prompt the diligence into considering the benefits of ersatz approaches to manufacturing. The series is subprogram 1 Setting the strategy discontinue 2 The systems and MRP IIPart 3 rightful(prenominal) in time (1) Part 4 Just in time (2) Part 5 Just in time (3) Part 6 Optimised Production Technology (OPT) (This section)Part 7 A fundamental qualit yPart 8 note management techniques toolsPart 9 Theres no accounting for manufacturing strategyPart 10 Performance measurementPart 11 Changing roles and things to do NOWLast edited 29/03/04 Tangram Technology Ltd. 2001Our standard disavowal regarding Internet data applies.dvanced planning and schedulingClients in the consumer products manufacturing and process industry have revealed that many are interested in knowing more about how advanced planning and scheduling (APS) systems can support them in making the right decisions to drive supply reach benefits. More and more companies are in the process of lend oneselfing such a system to provided optimize their planning processes. To learn more, read the following book exerptHow to gear up the Most Out of Your Supply chemical chainAn overview of Advanced Planning and scheduling (APS) systems in the consumer products manufacturing and process industry by Deloittes Rhiannon Davies, Nadine Diepeveen, Erik Diks and Vincent Vloemans. P ublished December 2002.Requirements private road APSPressure on performance has been steadily increasing over the coda decade, and it does not appear to be abating. But where can a company still squeeze out performance improvement? According to Gartner, a leading applied science research and advisory firm, supply drawstring management is one of the key differentiators for the future. Gartner researchers predict thatBy 2004, 90 per cent of companies that fracture to render supply concatenation management technology and processes to increase their tractability will lose their status as preferred suppliers (0.8 probability).Through 2005, organizations that implement supply chain planning applications with a nonstop improvement program will increase ROI by 40% during a 5 course lifecycle (0.7 probability).Changing business requirements and markets are making effective supply chain management and the resulting competitiveness and flexibility more important. Customers are demand ing more flexibility, more visibility of availability, more speed and highly customized products. To provide this information, more and more emphasis is put on the supply chain planning capabilities to allow the visibility along the supply chain to react quickly to ever-changing customer demand in a cost competitive way.The p extension phone to reliable planning is a fully flexible supply chain. about companies have made good headway in this area, but for many, the cost of this full flexibility is till too high. At Deloitte, we recommend match planning improvements with increasing flexibility in the supply chain and continuous development of supply chain professionals.Discussions with our clients in the consumer products manufacturing and process industry have revealed that many are interested in knowing more about how APS systems can support them in making the right decisions to drive supply chain benefits. More and more companies are in the process of implementing such a system to further optimize their planning processes. This book will help our clients to answer the following questionsWhat is an APS system and what role do they bit in supply chain optimization?How APS is different from ERP (Enterprise Resource Planning)?To what businesses could it obtain? Will it apply to my business? How?What are the benefits that could be gained from such a system?Who are the key sellers of APS systems?How can I choose which vendor to use for my organization?How are APS packages implemented and how can I apply this methodology to my own organization?The book is written in cooperation with the 10 major APS vendors in consumer products manufacturing and process industry. As sort of an APS primer, the book includes profiles of each vendor, listing the company, its strategy, product technology, functionality and other important information. But the book also is appropriate for readers with a strong knowledge of APS, providing them with street smart knowledge of technol ogy and vendors.The APS vendor measure outmentAPS applications cover various domains in supply chain management. To structure the discussion on APS, we introduce our APS reference model. This model serves as a guideline for the general building blocks of an APS system, and allows for a level par of the functionality of the various vendors. Furthermore, we discuss the most common models and techniques used by APS packages and assess the level of sophistication of the functionality provided by each vendor in each of the areas outlined in the APS reference model.Each industry has its own specific business issues and these must be addressed during the definition of the requirements that need to be met by an APS package. For example, in the process industry tank planning and dealings with shelf life are usually required, whereas in the high tech industry, complex capacity planning with many constraints. We concentrate on APS packages that cover most requirements in the consumer busine ss and process industry. We provide a compartmentalization of consumer business manufacturers to explain the different requirements that need to be addressed by an APS package. We also describe how major changes in the business environment, as well as process and technology innovations impact the requirements on APS software.To provide an up-to-date overview of the software capabilities offered by major APS vendors in the consumer products manufacturing and process industry arena, we performed a large survey among the largest APS vendors within the consumer business and process arena, including Adexa, Agilisys, Aspen Tech, Baan, i2, Logility, Manugistics, Oracle and SAP. We took a two-stage approach to the survey process. First, each vendor filled out a questionnaire that gave insight into the company, its strategy, its product and footprint, product strategy and development plans to allow us to better understand and position their capabilities. Second, we visited each vendor to di scuss in more detail their answers to the survey, to view demonstrations of how their product functionality really answers supply chain planning requirements, and to get an impression of their product and company.The vendor analysis in the book is structured to allow easy comparison of vendor capabilities. First, we inventarize the capabilities of each of the vendors per functional area as outlined in the aforementioned APS reference model. Second, we compare the vendors by their industry focus and their technology capabilities. Finally, per vendor we put an overview of their user interface functionality and development areas.Selection and implementation methodologyOne of the objectives of the book is to serve as a guide to support the sign selection of the APS application/vendor that best meets the business needs of our clients. As such, in addition to providing a vendor selection methodology, we explain Our proven five step methodology to implement an APS system. We explain eac h step in detail, as well as our methods and the tools we use during an APS implementation. Finally, we provide some lessons learned (secrets of our success) based on our practical implementation experience at numerous customers.Advanced Planning Scheduling (APS)For complex planning scheduling activities especially those that are heavily constrained or require multi-stage scheduling and frequent re-scheduling our experience is that off-the-shelf software packages just dont work. Because of the many differences surrounded by problem types and industries, you often end up with a rigid system with preset objectives, logic, and scope, which doesnt quite fit your core operation. Because our Advanced Planning Scheduling (APS) system is trig to your unique business rules, constraints, and processes, it can be used to optimise a wide variety of planning scheduling activities, includingProduction-line planning, scheduling, and sequencing advertize planning and timetablingMaintenance planning schedulingEquipment planning schedulingMedia planningFeatures and benefits of our APS system includeCreating schedules that are optimised for cost, profit, or client-defined objectives (service levels, utilization, etc.)Increased delivery on time and in full (DIFOT) minify work-in-progress and finished goods inventoryReduced planning timeDynamically re-optimising around unexpected changes in demand and other eventsConducting financial what-if analysis and scenario comparisonSetting more than one objective/goal and analysing the trade-offsCentralising the planning and scheduling function crossways multiple plantsOptimising across multiple production stages or stepsEvaluating the impact of your business rules, processes, and constraintsSeamless connection with your existing databases, MRP/ERP systems, and other enterprise softwareHOT NEWSMarch 2010 ORDINA signs partner agreement with ICRON. HomeSolutionsAdvanced Planning and SchedulingPlanning and scheduling has never bee n easy, but today it is far more challenging than it was a decade ago. Planners are feeling more and more pressure to generate accurate and timely plans by considering complex production and supply chain environment, ever changing demand, heavy constraints, conflicting business objectives and processes. And to make things worse, traditional tools at hand are graceful obsolete spreadsheet based manual planning and scheduling cannot cope with the complexity, your ERP system hardly helps and there is no off the shelf product which can address your unique production environment and supply chain network. What you need is a flexible and reliable Advanced Planning and Scheduling solutions which is tailored for your unique requirements.With 15+ years of experience in Supply Chain Optimization, ICRON Technologies provides ICRON Advanced Planning and Scheduling (ICRON APS) solution to revolutionize your planning and scheduling activities by its mature, cutting-edge technology, and innovativ e modeling and implementation practices. ICRON APS provides optimized, automatically generated plans and schedules mend simultaneously considering demand, resource and material constraints and business objectives.Benefits and features of ICRON APS areICRON APS provides significant cost and waste reduction by optimization based on user defined objectives (reduced cost of early/late job completion, inventory, overtime, transportation, reduced WIP times, etc.).ICRON APS greatly improves available-to-promise and capable-to-promise capabilities by generating realistic completion times for individual operations and jobs on entire supply chain network. This quickly translates into increased customer satisfaction.ICRON APS provides feasible, finite capacity schedules which can be readily published to the shop floor.ICRON APS importantly reduces the planning time. ICRON automatically performs most of the schedule generation activities and produces schedules in proceeding rather than hours o r days.ICRON APS provides tremendous what-if analysis capability. With its speed, accuracy easily generates as many scenarios as user requires and provides user friendly, efficiently tools for planner and management to selects the best scenario to be used as the official plan.ICRON APS maximizes the resource utilization by reducing the setup times by better sequencing, especially when sequence dependent setups exist.ICRON APS provides you fast rescheduling capability to respond to frequent changes. With ICRON, the production planning shifts from reactive, fire fighting planning to proactive, strategic planning.ICRON APS integrates and centralizes the planning and scheduling along the entire supply chain network.Advanced Planning and Scheduling (APS) -Techniques that deal with analysis and planning of logistics and manufacturing during short, intermediate and long-term time periods. APS describes any computer program that uses advanced mathematical algorithms or logic to perform opti mization or simulation on finite capacity scheduling, sourcing, capital letter planning, resource planning, forecasting, demand management, and others. These techniques simultaneously consider a range of constraints and business rules to provide real-time planning and scheduling, decision support, available-to-promise, and capable-to-promise capabilities. APS often generates and evaluates multiple scenarios. heed then selects one scenario to use as the official plan. The five main components of APS systems areDemand Planning,Production Planning,Production Scheduling,Distribution Planning, andTransportation Planning.