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Lean Scheduling and Theory of Constraints

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A summary review of Graphicast's successful adoption of VISUAL Lean Scheduling software.

A summary review of Graphicast's successful adoption of VISUAL Lean Scheduling software.

Published in: Business, Technology

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  • 1. VISUALize the Rebound – Graphicast’s Path Through the Dark Recession Forest
  • 2. 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
  • 3. 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
  • 4. 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.
  • 5. 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)
  • 6. 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
  • 7. System With an External Constraint Market too small for your capacity – the constraint DRUM ROPE Work Order Release SHIPPING BUFFER - TIME
  • 8. 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%
  • 9. 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
  • 10. 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
  • 11. 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
  • 12. “ 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.