The Theory of Constraints: Applications: DBR Segment

The Theory of Constraints
Fundamental Exam Review

Applications: DBR Segment
James R. Holt, Ph.D., PE

Professor jholt@wsu.edu
Engineering & Technology http://www.engrmgt.wsu.edu/
Management © Washington State University-2010 1
TOCICO Segmented Fundamentals Exam
Fundamentals Certificate
Multiple Choice Exam

(Identify, Exploit, Subordinate, Elevate, Go to Step 1)
Fundamentals Fundamentals Fundamentals Fundamentals

Certificate of Certificate of
Certificate of Certificate of
TOC Philosophy TOC Thinking
TOC Applications TOC Finance &
Processes
Measures
•Inherent Potential •Conflict •T, I, OE

•Inherent Cloud •DBR
Simplicity •PQ Type
•Inherent Win-Win •Negative •Project Problem
•Five Focusing Branch Management
Steps
•Three Questions •Ambitious •Replenishment
Target
© Washington State University-2010 2
Topics in TOC Operations
• Locating Capacity Constrained Resource
• Sizing Buffer (50% of existing to start)
• Rope Control (release)
• Buffer Management
• Simplified- DBR (finished goods buffers
controlling release)
• Make to Order
• Make to Stock

TOC and Physical Process Flows
• I previously introduced the linear flow
Market line at left. This type of flow is often
Process A B C D E Request
11 called an “I” line. “I” standing for a
RM FG vertical line as shown at the bottom.
•
Capability
Parts 7 9 5 8 6 Raw material flows from Raw Material
per Day
at the bottom upward to Finished
Goods at the top.
FG
• In reality, there are few such simple
lines making a single commodity.
But the “I” form itself is common.
• Consider: A trip to the hospital (you
are the RM and FG). You go to the
office for processing, see the doctor,
pay, go get the prescription, go
home, get better. I hope it doesn’t
RM take too long.
Moving the Constraint
FG
• I mentioned, “You can choose the constraint.” How is that
possible?
• If we progress normally, we find the constraint (Step 1)
exploit the constraint (Step 2), subordinate everything else
to the constraint (Step 3), elevate the constraint (Step 4),
and if the constraint is eliminated, find the new constraint
(Step 5).
• If we elevate the constraint far enough, we to move it.
• Actually, any one of the processes in our “I” line can be
improved. Any one process can increase its capacity. So,
by picking and choosing which processes to improve
(elevate) we can move the constraint to the location where
we want it to be.
• Ah! This creates an interesting question. Where is the best
RM
place to have the constraint? At the middle as shown? At
the beginning (bottom) or at the top (end)?
There are many factors in choosing the
best location for the constraint.
FG
• Retail sales, traditional management wants the constraint to be in
the market (buffer Finished Goods) *. If you are selling diamonds,
you probably want the constraint to be in the Raw Material. Hum?
Two selling markets with opposite recommendations? What I am I
do do?
• Things to consider.
 Capacity is obviously an issue. How hard is it to get? What does it
? cost? Do I want the constraint to be the $10,000 Drill or the $100,000

Mill?
 Predictability is important. You want a constraint that produces 5±5
or 5±1? Which helps you plan ahead?
 Quality and scrap are an issue as well. After the constraint, we want
zero scrape. Resolve quality issues before the constraint.
 Ease of expansion. Try to locate the constraint where you can easily
surge to capture unexpected opportunities
 Location of Inventory is key. You will have buffers. Try to locate
them naturally. Cost of inventory is often a real issue (use raw
material costs).
 Control is the most important factor in locating the inventory. Who is
RM
in control and how responsive is the system?
*TOC tries to avoid this option

Choosing the Constraint for Control
Purposes
FG
• Who is in control if the constraint is in Raw Material? Not

you. Who is in control if the constraint is in the Market?
Not you. Those are both bad choices. If you are stuck in
that world, you should take action to put yourself back in
control (Read Its Not Luck to learn how to create
unrefusable offers to increase your market).
•
? If the constraint is at the beginning, are you more or less
responsive to customer demand? Probably Less. It takes
time to move the product through the system.
• If the constraint is at the end, are you more or less
responsible to the customer demand? Could be less if the
material in your buffer is not the right item. You have to
clean out your buffer before you can get the right part to
the customer.
• It seems there is no right answer. Well there is, but the
RM answer depends a lot upon the physical system you are
dealing with. But, we can make some general statements.

Consider the “V” Plant
• In a “V” plant structure, relatively few Raw Materials are
used to make a wide variety of Finished Goods. Molten
FG FG FG FG FG steel, once rolled into a thickness can be cut into widths,
and treated. But, once it’s 1/2 inch thick and 12 inches
wide, it is very hard to be 2 inches thick and 36 inches
wide.
• Oil is refined into many types. Metal cut, formed, drilled
coated is not usually returned to its Raw Material State.
• The main problem in “V” Plants is stealing. Individual
processes, in an effort to improve efficiencies or reduce
set-ups will produce more than ordered or change the
production schedule to ‘look better’ locally. This problem
V-Plant creates havok with too much inventory in some places and
too little in other places.
RM • In the “V” Plant, it is much better to have the control at the
beginning. Buffer an early process and then flow the
product quickly to the Finished Goods.
• The “V” Plant unit measure CAN NOT BE QUANTITY
PRODUCED/TIME!!!!!!!!!!!!!!

Consider the “A” Plant
• In the “A” Plant structure, many Raw Materials
combine to produce few Finished Goods. This is
mostly an assembly process.
FG • The main problem in “A” plants is with coordination.
There are a lot of assembly operations. If one of the
items is not immediately available for an assembly,
the assembly is delayed.
A-Plant • There is better control if the constraint is at the apex
of the A. There are fewer buffers, better response
time and less inventory over all.
• It is important to
 Value inventory at the Raw Material cost
(Aluminum sheet with a bunch of holes is worth
less to an outsider than a solid sheet -- not more.
A partly processed part has no extra value until it
is sold.)
RM RM RM RM RM  Choke off release of Raw Material to just the
amount needed to replenish buffers. (Excess
inventory delays work, creates quality problems,
prevents improvements.)

Consider the “T” Plant
• In the “T” Plant structure, work flows

FG FG FG FG FG through a common line to a point where
the common parts are ‘customized’ into
specialized Finished Goods.
• The main problem in a “T” plant is
having enough of the right materials at
T-Plant
the point where the common
components become assembled (or
become defined) as the different
Finished Goods.
• In such a line, it makes sense to control
RM
the flow at the specialization position.
You have the fastest response yet
minimize inventory.
Hybrids “X” and “Diamonds”
• There are hybrid combinations

FG FG FG FG FG
FG
of plant of course.
• Looking at the “X”, with many
raw materials brought together
into a single process and then
forming many other products
(abrasive paper for instance)
seems to have an obvious
control point at the center.
RM RM RM RM RM
RM
• The “Diamond” shape should
probably have its constraint
near the end to avoid
cluttering up the complex
internal processes.
Working With Your Plant
• It is not always obvious what type plant you have. The
buildings and material flow aren’t always laid out in an
“I” or “A” or “V” or “T” pattern.
• It is a theoretical plant that we are discussing. Look at
the conceptual structure. Learn how to function in all
the theoretical structures and then you will be able to
formulate the best policy for your system.
• Hum? Is college an “I” Plant, a “A” Plant or an “V”
Plant? That depends. If you are becoming a nurse, its
probably an “I”. If you are studying semi-conductors,
its probably an “A”. If you are studying management, it
is probably a “V”. Well, that is an interesting puzzle.

Let’s Play a Game!
The Dice Game-Set Up
Processes (move token • I want you to simulate the ‘match
across the line) game’ found in The Goal, pages
104-112. But we will do it in a
more fun way.
Storage areas for Work- • You will need six fair dice (one die
in-Process will do if you share).
• Gather some tokens (lima beans,
marbles, or toothpicks work well.
Note: Jelly beans and chocolate
chips tend to disappear)
• Get two cups, one for Raw
Material and one for Finished
A B C D E F Goods
• Arrange your play area as on the
RM FG left. Create Six Processes (A, B,
Storage of Raw C, D, E, F) between Raw Material
Material and Finished and Finished Goods.
Goods

The Play
• You play the game for ten days, one day
at a time(each process gets to roll a die
ten times-once each day-in the order
prescribed).
• The work progresses from left to right.
Each day, A rolls first, takes however
many tokens are rolled from the RM cup
and moves them across the line to the
WIP (Work in Process) location between
Line A and B.
• B then rolls and tries to move tokens
from the left WIP location between A and
A B C D E F B to the right WIP location between B
and C, if available.
RM FG • Click a few times and I’ll show you the
sequence.

The Play
Day 1. at a time(each process gets to roll a die
A Rolls a 5 prescribed).
Line A and B.
sequence.

The Play
A Rolls a 5, B Rolls a 3 prescribed).
Line A and B.
sequence.

The Play
A Rolls a 5, B Rolls a 3, C Rolls a prescribed).
3 • The work progresses from left to right.
Line A and B.
sequence.

The Play
3, D Rolls 6 • The work progresses from left to right.
Line A and B.
A BB CC DD EE F F B to the right WIP location between B
sequence.

The Play
3, D Rolls 6, E Rolls a 2 • The work progresses from left to right.
Line A and B.
sequence.

End of Day One
3, D Rolls 6, E Rolls a 2, F Rolls 1 • The work progresses from left to right.
and puts it in the cup. Each day, A rolls first, takes however
Line A and B.
sequence.

The Play Continues
• Day 2 starts with the WIP (tokens in
places left from Day 1) and continues in
the same fashion.
• Starting Day 2, worker A rolls, takes
from the RM cup and moves more
tokens to the space between A and B.
Each process takes it’s turn moving
tokens during the day.
• The last process F ends the day by
rolling an moving the number of tokens
shown on the die (if they are available)
into the FG cup.
A B C D E F • All players move the maximum of what
they roll or what inventory is available to
RM FG process for that day’s roll.

The Results
• Now, we play for ten days. How
many tokens will be in the
Finished Goods Cup? Take a
guess before you play.
• Each die averages 3.5 dots per
roll. There are 10 rolls. Each
process should produce 35 dots
on the average over ten days.
• Do you expect 35 in the FG Cup?
?
A B C D E F
• To make sure we understand
what is happening in this game,
RM FG lets keep some records. For one,
we need to make sure we are
using Fair Die.

Keeping Track of our Rolls
• Keep track of the rolls you make.
Process Make sure each process (die)
A B C D E F
Day 1 5 3 3 6 2 1 produces as the company expects--
Day 2
Day 3
2
1
4
5
2
3
5
2
1
4
4
6
close to 35.
Day 4
Day 5
and so on …
• In fact, lets reward the workers.
Day 6
Day 7 • Any process who rolls better than 35
Day 8
Day 9
dots in 10 days receives a “Superior
Day 10 __ __ __ __ __ __ Performance Award”
• Any process who does better than 40
Sum Totals for each Process
receives a “Sustained Superior
Performance Award”
• But, if any process rolls less than 25
dots, we will have to let them go.
• Your Team will probably earn a few
Awards.
Keep Track of Your Inventory
• When you finish the Dice Game, you will have some unexpected results. We need to
produce at least 30 items to make a profit. The plant has such a bad history, one more 10
day period of loss (deliveries below 30) and we will have to close the plant.
• So, you’ll probably want to keep records of your inventory so you can figure out what
happened. Record the WIP (Work in Process) remaining between each workstation at the
end of each day as you go. Similar to below:
Process
A Wip B Wip C Wip D Wip E Wp F FG FG Total
Day 1 5 2 3 0 3 0 6 1 2 1 1 1 1
Day 2 2 0 4 2 2 0 5 2 1 0 4 2 3
Day 3 1 0 5 0 3 1 2 0 4 0 6 4 7
Day 4 and so on …
Day 5
Day 6
Day 7
Day 8
You see the WIP changes as the
Day 9
Day 10 __ __ __ __ __ __ __ days go by. If you want, you can
calculate the average WIP for
each position to see who is the
Sum Totals for each Process
problem.
Knowing the WIP at the End of the
10 periods also helps you
understand your system.
The Report
• Play the Dice Game for ten days. Record the individual Process
results. Determine which of your Processes received which
awards (or were laid off).
• Some of you are pretty concerned about my letting a person go if
they produce less than 25 parts. But, this is a very rare case.
Rolling a fair die multiple times soon generates a near normal
distribution. There is less than a 5% chance of producing less than
25 dots in ten rolls.
• Besides, this is more than generous in light of our production
demands. Cooperate has told us, “If you don’t produce at least 30
tokens in that FG Cup, they are going to close the plant!”
• What we want is everyone to do good so we can keep the plant
open.
• Make any recommendations you want on how to improve the plant.

Not Too Good!
• Let’s try again.
• Clearly, you didn’t have enough
Work-In-Process Inventory to
avoid he devastating impact of the
combination of Variability and
Interdependence (which occur in
almost every system).
• Let’s start with Six tokens at each
work center and play for ten days.
? (AH, much better)!
A B C D E F
• Now, without starting over,
RM FG continue to play for another ten
days (How was production then?)
• What would happen if we go ten
more days? Hum?
More on Dice Games
• Some of you will find the Dice Game fascinating. You

will play it over and over and dumbfound your friends.
• That’s ok, but don’t blame me if your social life goes
to pot.
• If you can’t get enough, you can try a few more
options I’ve documented at:
http://www.wsu.edu/~engrmgmt/holt/em530/Docs/DiceGames.htm

Looking at DBR from Several Points of
View
• By now you have:

 Overview of DBR and some theory
 Played the Dice Game
 You’ve Read The Goal at least once (3 or 4
times is probably enough)
 We are comfortable with PQ (exploiting
Octane)
 What’s left? Don’t we know it all?

Understanding DBR
• You still have some work to do.
• We need to understand Buffer Management
• What is that?
• Five Focusing Steps:
• 1. Identify the Constraint
• 2. Decide how to Exploit the Constraint
• 3. Subordinate all else to Buffer
the above decision Management
• 4. Elevate the Constraint
• 5. Warning, Warning. If the constraint moves, start
over at step 1. © Washington State University-2010 29
Review--Where are the Buffers?
FG
8
• There are four buffers to date:
 Constraint Buffers
6  Raw Material Buffers
7  Shipping Buffers
 Assembly Buffers
• Where is each one on this process
5 flow?
4 • Do you know know why?
Work Flow
Note: The implementation of the Assembly Buffer is confusing

in many situations. And, its purpose is weak.
The current thinking leans towards eliminating the Assembly
buffer in production.
Then, the Shipping Buffer is the time from material release to
1 2 3 finished goods deliver and subsumes the Constraint Buffer.
RM RM RM © Washington State University-2010 30
Review: Where are the buffers?
FG 13 FG 14
11
• Locate the Four
12
Buffers
7 8
 Constraint Buffers
10 9
 Raw Material
Buffers
4 5 6  Shipping Buffers
 Assembly Buffers
• Why?
Work Flow
Why not just have one

1 2 3
Assembly Buffer at 5?
RM RM RM © Washington State University-2010 31
90% of
Market Constraint
• Locate Buffers
15 FG
the time  Constraint
14  Raw Material
13
12
 Shipping
11
 Assembly
10
9 • Where (when) does a
8 buffer start? When
6 does it end?
Work Flow
1 2 3 4 5
RM RM RM RM RM
Market Constraint
1
FG FG
2
FG
3
FG
4
FG
5
• Locate Buffers
 Constraint
12  Raw Material
11  Shipping
 Assembly
10
9 • Where (when) does a
8 buffer start? When
does it end?
Work Flow
6
7
13
RM © Washington State University-2010 33

A Buffer is ‘Time’
How big should the buffer be? • Time for what?

Process A
1 1 1 5 2  Safety?
RM  Cushion?
 Variability?
Constraint
Process B 2 3 2 5 2  Confidence?
RM  Comfort?
Constraint Much more buffer is
needed when non-
Process C 4 4.5 4 5 2
constraints are near
RM the constraint
Constraint
capacity.
HOW TO DECIDE?
The Starting Position
• We experienced in the Dice
To make this work, Game the devastating Effects
the WIP Inventory when Interdependence AND
must be at least 5 Variability both exist in the
system (ALMOST EVERY
per work center (30) SYSTEM).
• The only way to ever hope to get
production anyway near the
average capacity of the
? processes is to have Work-In-
A B C D E F Process Inventory everywhere,
and Lots of it!
RM FG
• And yet, this solution degrades
to pretty poor performance over
time.
The DBR Approach
• First, Identify the Constraint. For
To make this work, this case, let’s make a
the WIP Inventory constraint.
must be at least 5 • Modify D’s die. That is, let’s
per work center (30) change the dotes. When D rolls,
if D rolls a 5, change it to a 4. If
D rolls a 6, change it to a 4. So
the new Die looks like,
1,2,3,4,4,4. This is 18 dots
? spread over six sides for an
A B C D E F average of 3/side.
RM FG • Increase the capacity for A,B,C,
E and F to 4/side by just ignoring
the side with the 1. Just assume
the die is five sided: 2, 3, 4, 5, 6.
for 20 dots or average of 4/side.36
© Washington State University-2010
The DBR Approach
• First, Identify the Constraint. For
To make this work, this case, let’s make a
the WIP Inventory constraint.
must be at least 5 • Modify D’s die. That is, let’s
per work center (30) change the dotes. When D rolls,
if D rolls a 5, change it to a 4. If
D rolls a 6, change it to a 4. So
the new Die looks like,
1,2,3,4,4,4. This is 18 dots
? spread over six sides for an
A B C D E F average of 3/side.
RM
4 4 4 3 4 4
FG • Increase the capacity for A,B,C,
X E and F to 4/side by just ignoring
the side with the 1. Just assume
Constraint
the die is five sided: 2, 3, 4, 5, 6.
for 20 dots or average of 4/side.37
© Washington State University-2010
Buffer Sizing
• If there is Not Enough WIP, we
When is WIP can’t get production volumes.
Inventory a • If there is too much, we lose
control, delay the flow and chaos
problem? occurs.
• The Bath Tub Curve WIP Curve
Anywhere in here is OK. To
start, just Cut WIP (typical
Problems!
flow times in half)
?
A B C D E F
4 4 4 3 4 4
RM X FG
Constraint
Too Little Too
Much
Buffer Sizing
• If there is Not Enough WIP, we
When is WIP can’t get production volumes.
Inventory a • If there is too much, we lose
control, delay the flow and chaos
problem? occurs.
• The Bath Tub Curve WIP Curve
Anywhere in here is OK. To
start, just Cut WIP (typical
Problems!
flow times in half)
?
A B C D E F
4 4 4 3 4 4
RM X FG
Constraint
Too Little Too
Much
DBR Approach
• Third, Subordination.
• Where should the WIP Be Held?
Cutting WIP from 30
• We need to protect the
to 15 is safe, but… Constraint from starving.
• Let’s move the WIP to where it
helps.
?
A B C D E F
4 4 4 3 4 4
RM X FG
Constraint

DBR Approach
• Where should the WIP Be Held?
Cutting WIP from 30
• We need to protect the Constraint
to 15 is safe, but… from starving.
• Move the WIP to where it helps.
• That should do it.
• But, We have so much Safety in
our Buffer. And A can out produce
? D. We need to prevent OVER
A B C D E F PRODUCTION!
RM
4 4 4 3 4 4
FG • Don’t allow A to produce any more
X
than D produces. Keep Buffer at or
below 15.
Constraint
• Tie the Rope
Tie the Rope (of DBR)
• Don’t allow A to produce any
Control the Buffer more than D produces. Keep
size with the Rope Buffer at or below 15.
• Each day A examines the WIP.
If there are 15 in the Buffer,
DO NOT WORK. If less than
15, work just enough to
? replace the Buffer to 15
A B C D E F • Pull WIP into the system Only
4 4 4 3 4 4 at the Rate the Constraint
RM X FG
Produces.
Constraint • What is the average outcome?

Shape of the Buffer
If all products take the same time on the • Where should
constraint, we can count parts. Say buffer the buffer
is 10 parts. What does it look like?
materials be
Buffer Time located?
• What is
protecting
what?
All three views
RM
are possible
Constraint views of the
Constraint
Buffer.

Replenishment is the Key
Market Constraint Consider
What Minimum Buffer Size Demand
would you recommend for market
A
each product? constraints for
products A, B,
B C, D, E with
weekly demand
C
shown
E
0 10 20 30 40 50
Per Week

A
products A, B,
B C, D, E with
weekly demand
C
shown
E
0 10 20 30 40 50
Per Week


A
products A, B,
B C, D, E with
weekly demand
C
shown
If Replenishment time is
two weeks! D
If Replenishment time is
E
one week!
0 10 20 30 40 50
If Replenishment time is Per Week
one day!
Ropes?

Buffer Reduction Efforts
Solution called S-DBR
Could Adding a Constraint

Market Constraint
Demand
• What can we
help? do to reduce
A
buffer
B
sizes?
• Focus on
C Replenish-
ment!
D
50 100 150 E
Aggregate Constraint 0 10 20 30 40 50
Demand Per Week
Ropes?

Think about the Ropes
• Ropes Pull the
Product.
A
• Which Rope Pulls
B What?
C

Consider Possible Advance Warning
Sell an A, Constraint Produces A,

Release Raw Material for an A.
A
Sell a C, Constraint Produces C,
Release Raw Material for a C.
B
Sell a D, Constraint Produces D,
Release Raw Material for an D.
C
Sell a B, Constraint Produces B,
Release Raw Material for an B.
Ropes are communication!
Does the communication go D
Sell an A, Constraint Produces A,
to the Constraint only? Release Raw Material for an A.
E And so on…
Ropes can pull whatever is smart! Read the Precision Power Case on WebCT.

More about the sequencing
of the Work in the Buffer
A
Using DBR Replenishing the FG
Inventory, the production line should
B
produce as much as possible in the
sequence ordered. Reduce Set-up
C
Times to make this possible.
Avoid Large Batches that will choke
D the balancing of many products.
Order Sold: E
2 As, 3 Es, 2Cs, 1 A, 10 Bs, 1 A, 2 D, 2 Es, 3 Bs, 2 Es, 2 As, 2 Cs, 4 Ds…
Pure Order Sequence in order sold

AAEEECCABBBBBBBBBBADDEEBBBEEAACCDDDD …
Adjusted Order Sequence to make (Breaking large B batch in two)

AAEEEBBBBBCCADDBBBBBEEBBBEEAACCDDDD …

Now Managing the Buffer?
Adjusted Order Sequence to make
AAEEEBBBBBCCAADDBBBBBEEBBEEAAC...
Buffer
First order
Release Work Order:

…CAAEEBBEEBBBBBDDAACCBBBBBEEEAA
…CAEEB
If the Buffer BEEB
was a hopper BBBB Pull the next Work Order from
filling right to DDAA the bottom of the hopper
left, bottom to CCBB
top... BBBE
EEAA Order to the Constraint.

Now Let’s look at the Buffer Correctly As
Time
So, what does this hopper represent? • Time On
It is the order, but no time is connected. Constraint
What if I spaced the Products out
according to how much time it takes  A: 15 Min
on the constraint?  B: 10 Min
 C: 20 Min
 D: 15 Min
…CAEEB
BEEB  E: 5 Min
BBBB
DDAA
CCBB
BBBE
EEAA

Convert Letters to Time
…CAAEEB Since 5 minutes is the common Time On
BEEB denominator, I’ll use 5 mins
BBBB for each Letter and add dashes Constraint
DDAA of 5 mins to space out the A: 15 Min
CCBB letters in time sequence.
BBBE B: 10 Min
EEAA C: 20 Min
D: 15 Min
Third Hour -> : D--D-- E: 5 Min
Second + half -> : A--A--
The Second hour -> : C---C-
This stack will be
On hour and half -> : B-B-B- tall. But, it is important to
Second half hour -> : B-BEEE represent the ‘Time blocks’
within the Buffer.
The first half hour on --A--A
the constraint is then:
Scheduling the constraint

Creating a 9 Hour
Buffer --C--D
AE---A
-B-B-B Time on
…CAAEEB EE---C Constraint
BEEB ---C-- A: 15 Min
BBBB D--D-- B: 10 Min
DDAA D--D-- C: 20 Min
CCBB -C---C D: 15 Min
BBBE A--AEE E: 5 Min
EEAA -B-BEE
-B-B-B
Since scheduling the constraint is the most -B-B--
important thing about managing DBR, we D--D--
need to do this. Nine working hours before it A--A--
Each line is
is due at the constraint, work for a product is C---C-
an half hour
released. B-B-B-
B-BEEE
--A--A
Rearranging the Buffer Stack
That tall stack was unwieldy. But, if we split it into
three smaller stacks, it’s not so oppressive.
Think of the flow moving through a set of tanks so the

Jobs stay in order from beginning to end.
Constraint Buffer
--C--D D--D-- D--D--

AE---A -C---C A--A--
-B-B-B A--AEE C---C-
EE---C -B-BEE B-B-B-
---C-- -B-B-B B-BEEE
D--D-- -B-B-- --A--A

Buffer Zones
With the Buffer Split in three sections, we can name the
zones. The one closest to the constraint RED. The
middle one YELLOW. The zone farthest away from the
constraint is Green.
Constraint Buffer
--C--D D--D-- D--D--

AE---A -C---C A--A--
D--D-- -B-B-- --A--A

We can take a different view of the Buffer
A fully loaded
buffer CDDD BE DAAC
EAB DCCA EBB CBBBB
CD BBE AEEB BBB EEEAA
A E B D
--C--D D--D-- D--D--

AE---A -C---C A--A--
D--D-- -B-B-- --A--A

The Parts in Zones
CDDD BE DAAC
EAB DCCA EBB CBBBB
CD BBE AEEB BBB EEEAA
A E B D
--C--D D--D-- D--D--

AE---A -C---C A--A--
D--D-- -B-B-- --A--A

What if there were problems?
CDDD BE DAAC
EAB DCCA XX
EBB CBBBB
XX X
CD XBBE
X AEEB BBB EEEAA
X
A E B D
RM
--C--D D--D-- D--D--
AE---A -C---C A--A--
Freight Truck X X
problems so RM EE---C -B-BEE XB-B-B-
X X
released partial ---C-- X
-B-B-B B-BEEE
X
parts over time. D--D-- X-B-B-- --A--A
Missing 8 Bs!

An Easier Way to Envision Buffer Status
I’ll replace the missing Pieces in the buffer with a hole.
What happens if?

Green Zone Hole?
Not to worry.
Yellow Zone Hole?
Watch out-Learn Red Zone Hole?
RM Act Immediately! ACT! ACT!
--C--D D--D-- D--D--
AE---A -C---C A--A--
X-B-B-B
X A--AEE C---C-
EE---C -B-BEE X B-B-B-
X X
---C-- X
-B-B-B B-BEEE
X
D--D-- X-B-B-- --A--A

What is the allowable
probability of a Zone Hole?
Green Zone Yellow Zone Red Zone
60% 30% 5%
Prob of Parts
UnAcceptable
In the Zone
Acceptable Region
Just Released <-Time Away At Constraint

RM
--C--D D--D-- D--D--
AE---A -C---C A--A--
D--D-- -B-B-- --A--A

The Buffer Zone Concept
Works for ALL Buffers
Constraint Buffers, Finished Goods Buffers, Supply

Buffers, Assembly Buffers are reported the same
way.
Green Zone Yellow Zone Red Zone

60% 30% 5%
Prob of Parts
UnAcceptable
In the Zone
Acceptable Region
At Release <-Time Away At Protection Point

Point

So, what about Buffers?
• The are critical

• They are not optional
• They are integrated with the Constraint and the
Rope
• Buffers are the KEY MANAGEMENT TOOL for
DBR.
• We can overcome bad Statistics, terrible
Interdependency, common Human Behavior

DBR and
Human Behavior Issues
• Drum-Buffer-Rope overcomes the problems of system

structure
 DBR de-couples interdependency
 DBR allows variability to work in our favor
 Protects the throughput capacity of the system
• Measurements should be in place to encourage the right
behaviors
 Maintain Buffers, Increase throughput, Reduce
variability, …
 Focus on Flow; Getting Faster and Faster!

<Add Make to Order vs. Make to Stock
Element about here>

What About Multi Operators?
Demand
100 parts/hr
RM FG
A B C D E
20 min 17 min 26 min 22 min 19 min
/part /part /part /part /part
Staffing 34 29 44 37 32
Flow 1.7 1.7 1.7 1.7 1.7
p/min p/min p/min p/min p/min

Based Upon Buffers, Where Should the
Constraint Be?
FG • The RM is Very Expensive?
• There is lots of Scrap in the
Processes?
• A Very Expensive Machine?
• We have highly variable processes?
 Locate at the least variable.
• The Market is sporadic?
RM © Washington State University-2010 67

Physical Flow Processes
The Goal: Produce.
The Measure: Throughput
The Constraint: Internal or Market Market
Process A B C D E Request
11
RM FG
Capability
Parts 7 9 5 8 6
per Day

Physical Flow Processes
Market
The Conflict Cloud: Process A B C
Request
D11
The Paradigm Shift: We have R
M
FG
Efficiency at the Constraint, Capability

Parts 7 9 5 8 6
Buffer Delivery, Watch Costs. per Day
B. Effective use D. Focus on

of Resources Efficiency/Cost
A. Excellent
production
C. Effective D’. Ignore
Delivery Efficiency/Cost

The Behavior/Results
Market
The Drum & Buffer Exploit the Constraint Request
Process A B C D11
The Buffer and Rope Subordinate R
FG
(de-couple and motivate) the System M
Capability
Processes Parts 7 9 5 8 6
per Day
Common Measures (flow time) Create Teamwork.
Buffer Management measures Buffer Penetration
Red-> Immediate Action What do we learn
Yellow-> Learn about what to fix next here to apply to
Green-> Allow the system to run Daily Lives?
Constraint Focus typically results in 20% improvement.
Road Runner Ethic, Throughput Accounting, Continuous
Improvement, Culture Change.
Very effective when Touch time<< Flow time.
Physical Flow
Lessons Learned
• Look at the Whole--Your whole life
• Select the Limiting Factor (Self-Examination)
• Do the Best You Can
• Subordinate secondary wishes to the Goal
• Simple, Cooperative Measures Lead to Better
Behavior
• Higher levels of Achievement are Possible by
Improving our Current Limiting Factors
• As You Improve, Continue to Get Better
• Be Anxiously Engaged in Good Causes (doing
and supporting)

Strategy and Tactics Tree
• Rapid Reliable Response
• http://www.wsu.edu/~engrmgmt/holt/em534/SandTRRR.pdf
• The Rapid Reliable Response S&T Tree
 Improves operations flow
 Focuses on selling Value
 Includes valuing Rapid Response

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The Theory of Constraints

Fundamental Exam Review

James R. Holt, Ph.D., PE

Multiple Choice Exam

Fundamentals Fundamentals Fundamentals Fundamentals

•Inherent Potential •Conflict •T, I, OE

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? cost? Do I want the constraint to be the $10,000 Drill or the $100,000

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• Who is in control if the constraint is in Raw Material? Not

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• In the “T” Plant structure, work flows

• There are hybrid combinations

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• Some of you will find the Dice Game fascinating. You

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• By now you have:

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Note: The implementation of the Assembly Buffer is confusing

Why not just have one

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How big should the buffer be? • Time for what?

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Market Constraint Consider

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Could Adding a Constraint

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Sell an A, Constraint Produces A,

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Pure Order Sequence in order sold

Adjusted Order Sequence to make (Breaking large B batch in two)

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Release Work Order:

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Think of the flow moving through a set of tanks so the

--C--D D--D-- D--D--

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--C--D D--D-- D--D--

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--C--D D--D-- D--D--

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--C--D D--D-- D--D--

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