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    Creating A Throughput Operating Strategy - Robert Fox

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    saurav
    This document discusses creating a throughput operating strategy (TOS) to improve company performance. A TOS focuses on increasing internal flow, synchronizing operations, and linking improvements to market opportunities. It describes different types of production networks ("T", "V", and "A" networks) and how a traditional cost-focused approach can hurt performance in each. The key to a TOS is selecting a control point, gearing internal behavior around that point, and driving marketplace actions based on improvements. Benefits of a TOS include increased throughput, reduced inventory and costs, stabilized schedules, and opportunities for sales growth.

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    Creating A Throughput Operating Strategy - Robert Fox

    Uploaded by

    saurav
    44 views22 pages
    This document discusses creating a throughput operating strategy (TOS) to improve company performance. A TOS focuses on increasing internal flow, synchronizing operations, and linking improvements to market opportunities. It describes different types of production networks ("T", "V", and "A" networks) and how a traditional cost-focused approach can hurt performance in each. The key to a TOS is selecting a control point, gearing internal behavior around that point, and driving marketplace actions based on improvements. Benefits of a TOS include increased throughput, reduced inventory and costs, stabilized schedules, and opportunities for sales growth.

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    Creating a Throughput Operating Strategy - Robert Fox

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    This document discusses creating a throughput operating strategy (TOS) to improve company performance. A TOS focuses on increasing internal flow, synchronizing operations, and linking improvements to market opportunities. It describes different types of production networks ("T", "V", and "A" networks) and how a traditional cost-focused approach can hurt performance in each. The key to a TOS is selecting a control point, gearing internal behavior around that point, and driving marketplace actions based on improvements. Benefits of a TOS include increased throughput, reduced inventory and costs, stabilized schedules, and opportunities for sales growth.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    44 views22 pages

    Creating A Throughput Operating Strategy - Robert Fox

    Uploaded by

    saurav
    This document discusses creating a throughput operating strategy (TOS) to improve company performance. A TOS focuses on increasing internal flow, synchronizing operations, and linking improvements to market opportunities. It describes different types of production networks ("T", "V", and "A" networks) and how a traditional cost-focused approach can hurt performance in each. The key to a TOS is selecting a control point, gearing internal behavior around that point, and driving marketplace actions based on improvements. Benefits of a TOS include increased throughput, reduced inventory and costs, stabilized schedules, and opportunities for sales growth.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 22

    CREATING A THROUGHPUT

    OPERATING STRATEGY

    Robert E. Fox
    Viable Vision
    Branford, CT
    WHAT IS A THROUGHPUT
    OPERATING STRATEGY (TOS)?
    A Way to Dramatically Improve a Company
    - Increasing and Synchronizing Internal
    Flow (More Throughput)
    - Linking Internal Improvements to Market
    Opportunities
    - Getting Everyone to Play in Sync
    Envision a Smooth Flowing River System
    THREE RIVER SYSTEMS
    Single Product – Henry Ford’s River Rouge
    Plant for Producing Model T’s
    Single Product – Henry Kaiser’s Shipyard for
    Producing Liberty Ships
    Multiple Products – Taichi Ohno’s Toyota
    Production System for Producing Cars
    WHAT ARE THE OBSTACLES
    TO A TOS
    ƒ Cost World Measurements
    ƒ Focus on Individual Operations Rather
    Than The Overall System
    ƒ We’ve Been Trained to Manage and
    Improve by Dissecting Our Systems and
    Improving the Parts
    HOW CAN ONE IMPROVE AN
    OVERALL SYSTEM?
    ƒ It’s Too Complicated
    ƒ The Flows Look Like a Plate of Spaghetti
    ƒ It’s Hard to Untangle Them
    ƒ I Don’t Know Where to Focus
    ƒ What’s the Alternative?
    ƒ Dissect It Into Parts – Improve the Parts
    HOW TO DEVELOP A TOS?
    ƒ Understand Your Network Shape(s)
    ƒ Select a Control Point
    ƒ Gear Internal Behavior to the Control Point
    ƒ Drive Market Place Actions Based on
    Internal Improvements
    “T” NETWORKS
    ƒ A Multitude of Product Options
    COST WORLD IMPACT ON “T”
    PLANTS
    ƒ Heavy Focus on Assembly Efficiencies causes 30/40/30
    Delivery Performance – Push Products to Market
    ƒ Stealing Creates Huge Month-End Hockey Stick
    ƒ Frequent Assembly Shortages Cause Excessive Expediting
    ƒ Excessive Expediting Results in Larger Batch Sizes
    ƒ Larger Batches Create Temporary Bottlenecks
    ƒ Temporary Bottlenecks Create More Assembly Shortages
    ƒ Bad Delivery Performance Damages the Market
    ƒ It’s an Unending Process
    A “T” PLANT TOS
    ƒ Component Inventories are the Control Point
    ƒ Assemble only to Customer Demand (Pull)
    ƒ Buffer Ahead of Assembly (Components)
    ƒ Cut Component Batches and Lead Times by 50%
    ƒ Measure Flow Rates, DDP, Inventory Levels and
    Network Productivity (OE/T)
    ƒ Connect High DDP and Shorter Lead Times to
    Market Opportunities
    BENEFITS OF A “T” PLANT TOS

    ƒ Delivery Performance – 98%+


    ƒ Inventory Reduction >50%
    ƒ Productivity (T/OE) Up 20%+
    ƒ Sales Growth Due to Reliability and Market
    Offers
    ƒ One Company – 1% Off Invoice Price for
    Every Day late
    “V” NETWORKS
    ƒ Distribution and Semi-Process Industries
    COST WORLD IMPACT ON A
    “V” DISTRUTION SYSTEM

    ƒ Production and Procurement Driven by


    Forecasts
    ƒ “Push” Replenishment
    ƒ Months of Inventory
    ƒ Retail Stock Outs – Lost Throughput
    ƒ Transshipments Between Warehouses
    ƒ Obsolescence/Returns
    COST WORLD MEASURES IN A
    “V” PLANT
    ƒ Local Efficiencies
    ƒ Significant Month End Hockey Stick
    ƒ Detailed Budgets
    ƒ Sales Drives Schedules
    COST WORLD IMPACT ON A
    “V” PLANT
    ƒ Oscillating Bottlenecks
    ƒ Inventories Can Block Flow/Production
    ƒ Large Amounts of Excess Capacity
    ƒ Overtime to Meet Monthly Goal
    ƒ Nervous Schedules
    ƒ Frequent Vendor Expediting/Excess Raw
    Materials
    A “V” DISTRIBUTION SYSTEM
    TOS
    ƒ Control Point is at Plant Warehouse (Base
    of the “V”)
    ƒ Stop Forecasting
    ƒ Replenish (Pull) What Was Sold/Used at
    the Next level
    ƒ Replenish Frequently – Daily Where
    Feasible
    ƒ Plant Produces to Warehouse Buffers
    A “V” PLANT TOS
    ƒ Control Point at First Operation (Base of the
    “V”)
    ƒ Squeeze Control Point Capacity
    ƒ Following Operations Never Block Control
    Point
    ƒ Following Operations – Flexible, Fast Flow
    ƒ Plant Wide Not Local Measurements –
    T/OE, Flow Rate
    BENEFITS OF A COMBINED “V”
    DISTRIBUTION/PLANT TOS
    ƒ Inventories – Days not Months
    ƒ Retail Stock Outs – Rare
    ƒ No Warehouse Transshipments
    ƒ Obsolescence/Returns - Miniscule
    ƒ Found Capacity >50%
    ƒ Very Fast Flow – Hours
    ƒ Stable Schedules
    ƒ Focused CPI Efforts
    “A” NETWORKS
    ƒ Typically Fabrication-Assembly Operations
    COST WORLD MEASURES IN
    “A” PLANTS
    ƒ Economic Order Quantities (EOQ’s)
    ƒ Local Efficiencies
    ƒ Product Costs/Margins (Full Absorption)
    ƒ Focus on Improving Specific Operations
    ƒ Flow Managed by MRP
    COST WORLD IMPACT ON “A”
    NETWORKS
    ƒ Imbalanced Component Inventories – Shortages
    and Excesses
    ƒ Large Amounts of Hidden Capacity
    ƒ Frequent Expediting and “Threats” to Break
    Setups
    ƒ Significant Inventory Write-offs
    ƒ On Time Deliveries Often Require Extraordinary
    Efforts
    ƒ Floating Bottlenecks
    AN “A” PLANT TOS
    Control Point is Component Inventories
    Measurements for Feeding Operations
    – Holes in the Assembly Buffer
    – Fast Flow, Flexibility and Expose Capacity
    - Network Measurement (T/OE)
    Product Pricing – With Excess Capacity
    - Maximum Throughput (SP-RM)
    HOW DO YOU CREATE A TOS?
    Map Flow to Understand Networks and Their Interactions
    Select Control Point(s)
    Develop the TOS
    - Constraint Exploitation
    - Fast Flow Elsewhere
    Implementation
    - Explain TOS to All (High Level)
    - Front Line Devises Specific Improvements
    - Align Measures to Drive Desired Behaviors
    Market Improvements to Generate More Throughput

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