Optimized Production Technology

 Some production planning and control system

focus on bottlenecks.
 Bottlenecks are operations, machines that
impede production because they have less
capacity than upstream or downstream stages.
 At bottlenecks operations, batches of product
arrive faster than they can be completed
 A bottleneck is defined as any resource whose
capacity is less than the demand place upon it.
 It is a constraints within a system that limits
throughput
 A bottleneck may be a machine, scarce or
highly skilled labor or a specialized labor or a
specialized tool
 A non bottleneck is any resource whose
capacity is greater than the demand place on it
 A capacity constrained resource (CCR) is one
whose utilization is close to capacity and can
be a bottleneck if not scheduled carefully
• Increase capacity of constraint
• Ensure that well trained people are available to
prevent constrain
• Developing alternative routing, processing
procedure
• Moving inspection to a position just before the
bottleneck. This restricts entry of defectives
into bottleneck
• Scheduling less work at work centers supplying
bottlenecks
 TOC is that body of knowledge that deals with
anything that limits an organization’s ability to
achieve it goals
• Dr. Goldratt around 1980, founded that
manufacturer were not doing good job in
scheduling and in controlling their resource and
inventory
• To solve this problem Goldratt developed a
software that scheduled jobs through
manufacturing processes taking into account
limited facilities, machines, personnel, tools,
material and any other constraint that would affect
a firm’s ability to adhere to schedule
 Thatis why sometimes OPT also called
Theory of Constraints
 To understand principles behind OPT
Goldratt described 9 principles based on
production scheduling which are as follows
Do not balance capacity balance the flow
Each work center in a mfg. operation is
subjected to different random occurrences for
ex machine breakdown, raw material
availability etc. This will lead to delay. Efforts
should be made to create a smooth flow of
material through the system for downstream
market
• Use of nonbottleneck is determined by other
constraints in the system

1 2

bottleneck non bottleneck

Capacity = 100 unit/hr capacity= 200unit/hr
Output = 100 units/hr output = 100 unit/hr
 Utilization and full employment of a resource
are not same

1 2 3 4
C= 400u c=300 u c=150u C=250u
O=400u o=300u O=150u O=150u

NB B B NB
Capacity of box 4 is 250 units/hr however, it can only be utilized at the rate of
150 units/hr because of box 3. note that box 2 is bottleneck to box 1. but
box 3 is principal bottleneck
 An hour lost on a bottleneck is an hour lost on
all the system
If a bottleneck can produce 130 units/hr then full
system can produce that only, no matter
whatever the capacity is at upstream and
downstream
 An hour saved on a non bottleneck source is
just a mirage
Since capacity of the system is governed by
bottleneck resource, saving time on a non-
bottleneck source does nothing for the
throughput in the whole system
1 2

Capacity= 200 units/hr capacity = 250 units/hr

Hour saved 0 hour saved 0.25
 Bottlenecks govern both throughput and the
accumulation of inventory
1 2 3 4

Capacity= 400 300 150 250

Output= 400 300 150 150
Production rate here is 150 unit/hr which is capacity of
bottleneck. As result inventory accumulates at a rate of 250
unit/hr
 The size of transfer batch does not need to be
equal to process batch
The transfer batch is the quantity of material transferred from one
work center to another, where as the process batch or
production lot, is that quantity of material produced between
each machine set up
 Lot sizes should be variable and not fixed
The lot sizes in OPT are a function of the schedule and thus
should not be fixed over time or from operation to operation.
 Schedules must be established by taking into
account all system constraints
 Identify the system constraint
 Decide how to utilize system constraint
 Align every part of system to support
constraint even if this reduces the efficiency of
non-constraint resources
 Evaluate the system constraint
 If in the previous step the constraint have been
broken go back to step 1
 According to Goldratt the goal of a firm is to
make money.

 If a firm makes only money than it will prosper

 To adequately measure a firm’s performance
three set of measurement are used.
(1) Financial measurement:-
Net profit, Return On Investment, Cash flow
(2) Operational measurement:-
Throughput (good sold), Inventory, Operating
expenses ( money that firm use to convert
inventory into throughput)
(3) Productivity:-
Productivity is measured in terms of output per
labor hour.
• All mfg. processes and flows can be simplified
to four basic configuration show below:
If X is bottleneck and Y is non bottleneck
(excess capacity)
There are so many means by which bottlenecks can
be controlled, they are
DBR Scheduling
Time components
Saving time
Avoid changing a non bottleneck into bottleneck
Quality aspects
Batch sizing
VAT analysis
 There are two ways to find bottleneck in a
system

 One is capacity resource profile

 Other is knowledge, look and talk
• The instrument that can be used to control
bottleneck/ control production are
• Drum, Buffer and Rope
(1) Drum:- if the system contains bottleneck the
bottleneck is the best place for control. This
control point is called drum because it strikes the
beat to ensure the upstream operation do not over
produce and build up excess WIP inventories.
If there is no bottleneck then best place to set drum
is capacity constrained resource.
(2) Buffer:- Keep a buffer inventory in front of
bottleneck make sure that it always has
something to work on. Because it is a
bottleneck so its output determines the
throughput of the system
(3) Rope:- Communicate back upstream to A
what D has produced so that A provides only
that amount. This keeps inventory from
building up. This communication is called rope
Following types of time make up production cycle
time. If we identify them and measure them we
can reduce bottlenecks.
(1)Set up time
(2)Process time
(3)Queue time
(4)Waiting time
(5)Idle time
For a part waiting to go through bottleneck queue
time is greatest. For a non bottleneck waiting time
is greatest
Always a bottleneck’s capacity is less than a
market demand. There are number of ways we
can save time of bottleneck for ex.
Better tooling
Higher quality labor
Reducing set up time
 When non bottleneck resources are scheduled
with larger batch size, this action would create
a bottleneck that we should avoid
 The bottleneck does not have extra time so
there should be quality control inspection just
prior to bottleneck to ensure that the bottleneck
work only on good parts
 Also there should be assurance of quality
downstream from bottleneck to maintain
throughput
 For bottleneck resource larger batch size is
desirable because larger batch size reduces set
up time so we can save time
 For non bottleneck resource small batch size is
desirable
• All manufacturing firms can be classified into one
or a combination of three types designated as V, A
& T.
• In a V plant to overcome problem of bottleneck
batch size should be reduced
• In an A plant bottleneck problem can be overcome
by reduced batch size as well as DBR scheduling
• In a T plant efficient human resource can be useful
in reducing bottleneck
 Production
 Supply chain (distribution)
 Finance and accounting (operating expenses,
investment)
 Project management ( critical chain project
management)
 Marketing and sales (sales process
engineering)
 Increased throughput
 Increased productivity
 Reduction in WIP
 Better utilization of capacity
 It may reduce efficiency of non bottlenecks
 It is not part of main stream business
 Not as efficient as Operations Research
techniques
 Its an applied philosophy not pure
 Bottlenecks can always not be improved
because it may be due to intellectual property