• Market is demanding shorter delivery periods.
• We often are not able to deliver on the committed due date to customer.
• There is a feeling that the resources though look busy are actually working on much lesser capacities then they were initially brought in for.
• High WIP and/or FG inventory. Lots of capital can be actually freed up by reducing the inventory.
• RM and FG inventory is heavily buffered to meet customer requirement.
• Bottleneck seems to wander from one department to another.
• It is difficult to synchronise demand and operations.
• Priorities are unclear.
• Most of the times actions are taken only after a delay has occurred pushing everyone in a fire fighting mode.
• Tracking job orders on the shop floor is almost impossible.
• It is difficult to take decision on a sound basis while pushing out or pulling in an order to fulfil an urgency.
• Top management is spending too much time on fire fighting rather than on developmental issues.
• Many times orders are taken by compromising the product cost (the way accountants tell), though there is feeling that actually taking this order will not put us at loss.
• People down the line do not respond to the market needs the way top management wish they should.
• Delegation and owning up responsibilities by people is difficult.

If your firm faces many or most of these issues, then it is time you evaluate the application and benefits of this technique to your organisation…

What is Drum-Buffer-Rope?

In today’s competitive world, companies are facing the dual challenge to achieve faster delivery to the market along with higher flexibility to adjust to the changes in the market demand.

When companies try to build up inventories in order to be able to respond quickly, it affects the cash flow. Worse, when the demand changes, they are left with dead or slow moving inventories. In a declining market, this can bring a sound company to its knees.

What is the solution then? Should they cut manpower and try to save on such other overheads?

Theory of Constraints (TOC) states that we must take a holistic view of these issues. In simpler terms, these “problems” should be treated as symptoms of a single root cause.

TOC says that the Throughput of the whole system is determined by a single limiting factor called the Constraint or bottleneck of the system. This is similar to saying that the strength of a chain is equal to the strength of the weakest link in the chain.

Extending this analogy to a manufacturing plant, the machine with the lowest capacity determines the total throughput for the plant. It is also imperative that we have some way of protecting the schedule against Murphy, i.e. sudden interruptions, because these interruptions also affect the throughput of the plant.

As long as we do not recognise these facts, and change our way of working accordingly, we will continue to face problems of excessive inventories, poor on time deliveries and so on.

The TOC methodology as applied to a manufacturing plant is known as Drum-Buffer-Rope.

Drum is the constraint in the plant. The way an army marches on the beat of a drum, the entire plant has to work according to the best utilisation of the drum capacity. Utilising the Drum means producing on the Drum in such a way that will maximise the realisation i.e. maximise the money generated through sales. Utilisation does not mean keeping the Drum busy for maximum time.