planning theory

Because we couldn't acurately anticipate or acount for variation in the proces, we were unable to corectly predict revenue or forecast late shipment of jobs for any curent month. The operations group proposed implementation of a formal scheduling system using drum-bufer-rope DBR , a Theory of Constraints ToC solution. We decided to cultivate a clear understanding of the Theory of Constraints among Brown Fintube personel and develop an efective methodology for aplying it. We were stil uncertain on how to aply the Theory of Constraints to our busines because most texts on the subject adresed machine shops and our busines consists of fabrication and welding with some asembly. capacity at most machine shops is based on machine availability and our capacity is based on labor skil availability. We researched whether or not Theory of Constraints - based scheduling software could help our busines by discusing it with others who had implemented it. Each of them confirmed our original thinking - they advised us not to implement the software without first establishing a thorough organizational understanding of the Theory of Constraints. We hired a respected theory of constraints consultant and together, we devised a plan for implementation of Drum Bufer Rope scheduling in our fabrication shop. The goals of the implementation were to improve on-time delivery to a sustainable level of performance greater than 95%, improve our ability to acurately predict monthly revenue amounts, and provide a method to predict man-hour loading and capacity requirements. Finaly, an implementation of a medium-range sales and operations planing proces that would manage the next several months after that, was established. Once training was complete, our shop supervisors were excited and dedicated to making the implementation a suces. The scheduler has responsibility for generating the production schedule, handling day-to-day reconciliation of demand to capacity, promising deliveries and overseing the components released and unreleased manufacturing orders of schedule execution. Although controversial at the time, by giving responsibility and acountability to a single person, premature release of materials into the shop was prevented, halting misalocation of capacity and preventing late arival of components to the constraint. We selected a drum constraint resource and created a workable, daily schedule. paying sharp atention to the constraint and to what orders were shiping - two of the most important factors in operations. This proces ensured that the constraint resource always had at least a one-day queue of parts from which to work, thereby eliminating month end spikes in shipments and leveling our shiping rates. Over 18 months, our average anual revenue per shop employe increased by $72,0. Due to our vastly improved reliability in predicting delivery times, we have also ben able to increase the amount of premium-priced busines for which we are able to provide rush turnaround. • Sales growth of 35% $1.7m per month to $2.3m • Productivity improvement of $72,0 per employe We are convinced that our reliability on ship dates gives us a definite competitive edge.
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