NICE PPT

4. Actually make more money today
and in the future!
Why is that important to know?
• It enables us to answer the question “what is
productivity?”
• An action that moves us toward making money
is productive.
• An action that takes us away from making
money is non-productive.

9. PHENOMENA IN PRODUCTION
Kind of information that we
cannot precisely predict. These
types of information vary from
one instance to the next.
Dependent
events
Statistical
fluctuations
An event, or a series of events,
must take place before another
can begin . . . the subsequent
event depends upon the ones
prior to it

10. Remember ….
We are always talking about
the organization as a
whole—not about the
manufacturing department,
or about one plant, or
about one department
within the plant.
We are not concerned with
local optimums.
OPERATIONAL MEASUREMENT
Throughput
the rate at which the system generates
money through sales
Inventory
all the money that the system has invested in
purchasing things which it intends to sell
Operational expense
all the money the system spends in order to
turn inventory into throughput
~ YIS//062009 ~

11. BOTTLENECK RESOURCES
• is any resource whose capacity is
equal to or less than the demand
placed upon it
NON- BOTTLENECK
RESOURCE
• any resource whose
capacity is greater than the
demand placed on it.Balance the flow,
not capacity !!
You should not balance capacity with demand.
What you need to do instead is balance the flow of
product through the plant with demand from the market
MANAGE YOUR
RESOURCES!!

12. If your bottlenecks are not maintaining a flow
sufficient to meet demand and make money, there
is only one thing to do.
FIND MORE CAPACITY
To increase the capacity of the plant is to increase
the capacity of only the bottlenecks.
PUT QC IN FRONT OF THE BOTTLE
NECKS
Make sure the bottleneck works only on
good parts by weeding out the ones that are
defective.
If you scrap a part before it reaches the
bottleneck, all you have lost is a scrapped
part. But if you scrap the part after it's
passed the bottleneck, you have lost time
that cannot be recovered.
Be sure the process controls on bottleneck
parts are very good, so these parts don't
become defective in later processing.
Whatever the bottlenecks produce in an
hour is the equivalent of what the plant
produces in an hour.
So ... an hour lost at a bottleneck is an
hour lost for the entire system.