theory of constraints

The Goal : เป้�าหมายขององค์�กร

Make money in the present as well as in the future.

Measuring the goal

• Net profit

• Cash

• Return on Investment (ROI)

For a manufacturing enterprise, the goal can also be measured by

• Throughput

• Inventory

• Operating expenses

Definitions

• Throughput: The rate at which the system generates money through sales.– Note that the money is generated through

sales and not production because if you produce something and don’t sell it, you have not really had throughput. (You’ve just put it into inventory).

– Unsold Product is not throughput.

Definitions

• Inventory : money that system has invested in purchasing thing it intends to sell, it measures inventory in term of material cost only .

• Operational Expense: All the money the system spends in order to turn inventory into throughput.

to accomplish the Goal,to accomplish the Goal,the company must simultaneouslythe company must simultaneously

• Increase throughput.Increase throughput.

• Reduce inventory.Reduce inventory.

• Cut operating expenses.Cut operating expenses.

ข�อจำ�าก�ด (Constraint)

• Anything that limits a system from achieving higher performance in attaining its goal.

• Two types of constraints– Bottleneck– Capacity constrained resource

Constraint

• Bottleneck– The resource’ s capacity is less than or equal

to the market demand

• Capacity constrained resource– Resource that has become a bottleneck as a

result of inefficient utilization

• For simplicity, we will only use the term bottleneckbottleneck

Constraint

Pressing1,000/day

Welding900/day

Cutting1,300/day

Machining800/day

Assembly1,100/day

CustomerDemand850/day

1:1

OPT Rules

• Balance flow , not capacity.• Constraints determine nonbottleneck

utilization.• Utilization and activation of a resource are

not synonymous.• An hour lost at a bottleneck is an hour lost

for the total system.• An hour saved at a nonbottleneck is a

mirage.

OPT Rules• Bottleneck govern both throughput and

inventory in the system.• The transfer batch may not, and many

times should not, be equal to the process batch.

• The process batch should be variable, not fixed.

• Schedules should be established by looking at all of the constraints. Lead time are the result of a schedule and cannot be predetermined.

Example

A2 min/unit

C(2)4 min/unit

D(2)3 min/unit

Assembly

LatheDrill

B4 min/unit

D(1)3 min/unit

E(2)10 min/unit

Assembly

MillLathe

Two ProductDemand

A : 300/dayB : 50/day

Production 2 Drills m/c 1 Lathe m/c 1 Milling m/c

three shift per day(1440 minutes)

Unit Processing Time

Units required per assembly

Total Processing Time Avail

ableUtilization

A B A B A B Total

Assembly 2 4 1 1 600 200 800 1440 55.7%

Drill 4 0 2 0 2400 0 2400 2880 88.3%

Lathe 3 3 2 1 1800 150 1950 1440 135.4%

Mill 0 10 0 2 0 1000 1000 1440 69.4%

Machine Load 2*1*300

10*2*50

Example

• The Lathe is the bottleneck resource.• Daily demand cannot met.• Lathe utilization will be 100%.• Utilization of the other machines will

decrease. (activation of the resources can be at different utilization levels.

• Operate the nonbottleneck operations more efficiently will not contribute anything to throughput.

The transfer batch / the process batch.

Operation 1

Operation 2

Operation 3

10 20 30

Pro

cess

Transfer 10Transfer 10


Process batch = 10Process batch = 10Transfer Batch = 10Transfer Batch = 10

time

The transfer batch / the process batch.

Operation 1

Operation 2

Operation 3

10 20 30

Pro

cess



Process batch = 10Process batch = 10Transfer Batch = 5Transfer Batch = 5

Process Batch/Transfer Batch

Process 1 50 Process 2

ผลิ�ตค์ร��งลิะ 200

ส่�งค์ร��งลิะ 50Transfer Batch = 50Transfer Batch = 50

Process batch =200Process batch =200

Theory of Constraints (TOC)

• System’s output are determined by its constraints.

• Broad categories of constraints– Internal Resource Constraint : Internal Resource Constraint :

machine ,workermachine ,worker ,tool.,tool.– Market Constraint :The market demand is less Market Constraint :The market demand is less

than production capacitythan production capacity– Policy constraint: A policy dictate the rule of Policy constraint: A policy dictate the rule of

productionproduction

Performance Measure• TOC focuses on the role constraints play in

systems in order to improve system performance toward the GOAL.

• Two type of performance measures– Financial Measures : net profit , ROI , cash flow– Operational Measures

• Throughput• Inventory• Operating Expenses

• Efficiency measure,such as resource utilization,are not part of the operational measures.

Five step of TOC

• Identify the Constraint (Identify the Constraint (The DrumThe Drum))..

• Exploit the Constraint (Exploit the Constraint (Buffer Buffer the Drum)the Drum)

• Subordinate Everything Else (Subordinate Everything Else (RopeRope))

• Elevate the Constraint Elevate the Constraint

• If the Constraint Moves, Start OverIf the Constraint Moves, Start Over

DBR Technique• Drum-Buffer-Rope (DBR) is a production control

technique to implement the step of TOC.• Drum

– Bottleneck, beating to set the pace of production for the rest of the system

• Buffer – Inventory, placed in front of the bottleneck to ensure it

is always kept busy– Determines output or throughput of the system

• Rope– Communication signal, tells processes upstream

when they should begin production

DBR Technique

1 2 m n Customer

Buffer

Drum… …Raw

Material

Raw material dispatching point

Rope

Buffer

• ม�ไว้�เพื่!"อรองร�บค์ว้ามไม�แน่�น่อน่ของกระบว้น่การต�น่น่��าที่�"ที่�าหน่�าที่�"ส่�งชิ้��น่ส่�ว้น่ให�ก�บ Bottleneck

• ขน่าดของ Buffer ค์�ดจำากเว้ลิามาตรฐาน่ที่�" Bottleneck จำะใชิ้�ชิ้��น่ส่�ว้น่ใน่ Buffer จำน่หมด

• แน่ะน่�าให�ขน่าด Buffer เป้*น่ หน่+"งใน่ส่�"ของ Lead Time ของระบบ

• เชิ้�น่ ถ้�าชิ้��น่ส่�ว้น่เด�น่ที่างจำากต�น่ที่างถ้+งจำบกระบว้น่การเป้*น่ส่�น่ค์�าใชิ้�เว้ลิา 8 ชิ้�"ว้โมง ขน่าดของ Buffer ค์!อ 2 ชิ้�"ว้โมง

ต�ว้อย�าง

D10 น่าที่�

D5 น่าที่�

ส่�น่ค์�า Pอ.ป้ส่งค์� 100/ส่�ป้ดาห�

ราค์า 90

ส่�น่ค์�า Qอ.ป้ส่งค์� 50/ส่�ป้ดาห�

ราค์า 100

C5 น่าที่�

B15 น่าที่�

B15 น่าที่�

A10 น่าที่�

C10 น่าที่�

A15 น่าที่�

RM 120/pcs

RM 220/pcs

RM 320/pcs

Purchased Part5/pcs

ม� 4Work Centerแต�ลิะ WC ม�ก�าลิ�งผลิ�ต

2400 น่าที่�ต�อส่�ป้ดาห�

ใชิ้�ต�ว้แบบ LP หา Bottleneck

• ส่�น่ค์�า P ราค์า 90 บาที่ ห�กว้�ตถ้.ด�บแลิะชิ้��น่ส่�ว้น่ออก 45 บาที่ เหลิ!อรายได� = 45 บาที่

• ส่�น่ค์�า Q ราค์า 100 บาที่ ห�กว้�ตถ้.ด�บแลิะชิ้��น่ส่�ว้น่ออก 40 บาที่ เหลิ!อรายได� = 60 บาที่

• น่��น่ค์!อ Objective Function Z = 45P+60Q

ข�อจำ�าก�ด•15P+10Q <= 2400 Work Center A•15P+30Q <= 2400 Work Center B•15P+5Q <= 2400 Work Center C•10P+5Q <= 2400 Work Center D• P <= 100 Demand P • Q <= 50 Demand Q

Linear Programming Model

• Max Z = 45P+60QSubject to•15P+10Q <= 2400 Work Center A•15P+30Q <= 2400 Work Center B•15P+5Q <= 2400 Work Center C•10P+5Q <= 2400 Work Center

D• P <= 100 Demand P • Q <= 50 Demand Q P,Q >= 0

น่�าไป้หาค์�าตอบจำะได� Slack ของข�อจำ�าก�ดWC B=0 แส่ดงว้�า WC Bเป้*น่ Bottleneck

Resource min/Week

P

min/week

Q

Process Load per

Week

Available time per

week

Percentage Load per

week

A 1500 500 2000 2400 83

B 1500 1500 3000 2400 125

C 1500 250 1750 2400 73

D 1000 250 1250 2400 52

D

C

BA

RM 1 RM 2Buffer

RM 3

Purchased Part5/pcs

Buffer Drum

theory of constraints

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