Throughput #19
Using Drum-Buffer-Rope to maximize throughput
In our previous newsletter, we looked at a manufacturer that had a warehouse full of inventory but was still frequently short of the materials they needed.
By implementing Demand-Driven Replenishment (essential shift #1), they improved material availability from ~70% to 95%+ and put inventory management on a much stronger footing.
But inventory availability wasn’t the only problem.
The company was still struggling with constant production firefighting, schedule changes, excessive work-in-process (WIP), quality issues and long lead times.
To solve those challenges, they had to make a second essential shift.
Essential shift #2: Choke the release of work to maximize the constraint
Most manufacturers assume that if they start work earlier, they’ll finish sooner.
It sounds logical.
In reality, releasing too much work into production often has the opposite effect.
Work orders pile up. Priorities change. Bottlenecks seem to move around the plant. Operators focus on what’s in front of them rather than what should be worked on next.
The result?
More WIP. Longer lead times. More firefighting. Lower on-time delivery.
The plant stays busy, but flow slows down.
To restore stability, the company implemented Drum-Buffer-Rope (DBR), a Theory of Constraints production planning method that sits at the core of our Flow Management System.
The principle is simple:
Divide your operation into logical flow streams, and identify the constraint for each that limits output. Schedule the constraints effectively, and release only enough work to maximize their performance.
In other words, stop flooding the shop floor with work.
By limiting WIP and managing flow, manufacturers can maximize throughput while creating stability in what would otherwise be a chaotic environment.
Why lead time is your biggest competitive advantage
When inventory flow and production flow are managed together, the impact can be dramatic.
As lead times shrink, companies become more nimble: they can respond more quickly to customer demand, improve on-time delivery, create capacity for growth, and gain a significant competitive advantage.
Our client reduced a typical lead time from three months to about three weeks.
They’re now shipping almost 20% more than they did a year ago – and revenue is up 20%.
One more shift to go
Demand-driven replenishment (Roadrunner Rx inventory management) and Drum-Buffer-Rope (Roadrunner Mx production management) are two of three essential shifts to improve productivity and profitability.
But there’s one more critical shift required to make the transformation stick.
Many manufacturers continue measuring local efficiency, even when those measurements encourage behaviours that increase WIP and slow down flow.
In our next newsletter, we’ll explore this third essential shift (what to measure) for a strong, resilient manufacturing operation.
If you’d like to explore what this could look like in your facility, please get in touch.
Thanks for reading!
— Jack Warchalowski, Montera CEO
[email protected]
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P.S. Need better plant performance? Start with our free inventory imbalance report as the first step to greater efficiency, higher margins and long-term profitability.
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