Week%209%20TOC_2010_STUDENT_6pp

Week%209%20TOC_2010_STUDENT_6pp - Objectives Managing Time:...

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1 Managing Time: The Theory of Constraints Week 9 Objectives 1. Understand the concept of “time-based management” 2. Understand the Theory of Constraints (TOC) & how it differs from conventional approaches 3. Appreciate technical design aspects of TOC 4 Appreciate how constraining resources and process 4. Appreciate how constraining resources and process variability might be managed 5. Be aware of potential issues with TOC Reading BDMM Chapter 5 Theory of Constraints LS pp.761-765 For interested people “A Little TOC Goes a Long Way” Smith, F. MSI August 2003. Instructions on how to access this article are given along with the tutorial questions Lecture Outline 1. Introduction 2. What is a constraint? 3. Theory of constraints 3.1 Measurement 3.2 Managing constraining resources 3.3 Examples 1. Introduction to time-based management This subject focuses on value creation Using processes to create value Processes are supported by resources How do we create value by managing a constraining How do we create value by managing a constraining resource? In particular. .. How do we manage constraining resources in order to generate revenue at an increased rate E.g., $ per machine hour Time-based management LO1 Compress time to undertake processes to enhance customer value & reduce costs Develop new products/services Fill customer orders for products/services 6 Why important? Dictates rate at which products are produced & revenue generated Determines time resources are tied up in processes Delays lead to inventory build-up New products/services
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2 Developing new products & services Measures to assess product development process Time-to-market Break-even time 7 How to reduce time taken Involve suppliers Efficient design process Using teams & decentralisation Time taken to fill customer orders Order placed Order delivered Order received Order setup Order produced 8 Order receipt time Delivery time 2. What is a constraint? Anything that stops you from getting more of what you want External or Internal Tangible or Intangible External constraints Market constraints Supply constraints 10 Internal constraints Materials processes are starved of materials Capacity different machine capacities 11 Logistical Planning and control issues, e.g. variability Managerial Strategies and policies Behavioural Examples for an airline? Constraint External Internal Tangible Intangible
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3 Binding constraint The most “harmful” constraint Weakest link in organisation’s value chain May also be referred to as a bottleneck Binding constraint 10 km/hr Where are we now?
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Week%209%20TOC_2010_STUDENT_6pp - Objectives Managing Time:...

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