Lean Scheduling and Theory of Constraints

VISUALize the Rebound – Graphicast’s Path Through the Dark Recession Forest

Graphicast, Inc.
Founded in 1978
Located in Jaffrey, NH
Contract manufacturer of machined, zinc alloy castings
In-house design, mold making, casting, machining capabilities
Proprietary, graphite mold casting process creates high density castings with exceptional surface finish
Most applications are high valued added machine components

A Long Time VISUAL User
Implemented VISUAL in July 1999
The impetus for selecting VISUAL was the scheduling capability
VISUAL consolidated all operational and financial activity
We developed numerous Crystal reports running off the VISUAL database
Provide detailed analysis of sales, financial, and operational information for fine tuning the business

Some Scheduling Problems Persisted
The machine shop was booked solid 8 weeks in advance
Normal shop floor issues wreaked havoc with the schedule
The schedule wasn’t pulling jobs in if previous jobs finished early
Rush orders were very disruptive to the schedule and caused late shipments
The schedule tried to break into jobs to improve lead times
Ultimately, the schedule was not able to efficiently reflect the nature of our business. We needed a different scheduling solution. Fortunately, we found the solution just before the economy collapsed.

What’s behind Lean Scheduling
Lean scheduling is based on Goldratt’s Theory of Constraints (TOC) introduced in the business novel, “The Goal”
Utilizing TOC in production
Identify the constraint that limits the throughput of the system
Relieve or eliminate the constraint to free the system to operate at its peak level
If you have a production constraint, add extra shifts, add a second machine or use unconstrained machines to produce the same part
If you have a “between the ears” constraint, change restrictive policies and procedures
If you have a market constraint, increase throughput (sales revenue)

What’s behind Lean Scheduling - continued
TOC scheduling relies on three components
“ Drum” – The pace of the “constraint”
“ Buffer” – Some amount of WIP or time that protects the constrained component
“ Rope” – A signal to upstream operations to release work into the system
TOC thinking is consistent with Lean and Six Sigma
Use TOC to focus on constraints
Use Lean or Six Sigma techniques to improve and stabilize operations

System With an External Constraint Market too small for your capacity – the constraint DRUM ROPE Work Order Release SHIPPING BUFFER - TIME

The Impact of Lean Scheduling
Lead times dropped to four weeks from sixteen weeks
Practically eliminated overtime
Savings of about $100,000 per year
Went to four day work week
Bonus to employees for losing overtime
Reduced electric bill by 15%

The Impact of Lean Scheduling - continued
Reduced Inventory by 30%
Freed up about $100,000 of cash
Effectively doubled plant capacity
Overall plant utilization is about 50%
Plenty of capacity to handle rush orders without impacting on-time deliveries
No increase in equipment or employees needed to grow
Major issue is now increasing throughput

A minimal amount of oversight day to day
Simple reports
VISUAL Planned Load
VISUAL Resource Operations Buffer Status
Plant Wide Buffer Status - Crystal
Simple scheduling
Floor supervisors decide where to run jobs
Minimal management involvement

A minimal amount of oversight day to day - continued
Lean Scheduling efficiently reflects our day to day operations
Rapid changes
Rush orders
Capacity planning
Very quick “what-if” analysis
Increasing or decreasing bookings
Impact of overtime, personnel levels, vacations or absences
We do not have a scheduling person

“ Driving Business Innovation to Improve Business Performance”
Savings
From day one of the Lean Scheduling transformation
Payback
2 ½ months for the entire investment in Lean Scheduling
Fingertip Information
Lean Scheduling gave us a rapid and efficient response tool to the current economic crisis
Recognition
Graphicast received a 2009 PM100 award from Managing Automation Media for the Lean Scheduling project
“ Progressive Manufacturing” awards were bestowed on the 100 companies deemed to have most effectively used innovative methods to improve business performance.

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Lean Scheduling and Theory of Constraints

by Graphicast on Oct 27, 2009

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