This document summarizes Eli Goldratt's article on production concepts and a time-based approach called Drum-Buffer-Rope (DBR). It discusses the evolution of operations management from Ford's flow lines to Toyota's production system. While these worked well in stable environments, most industries face instability. DBR uses time rather than inventory to control production. It releases materials based on due dates adjusted by a time buffer and prioritizes orders using color-coded status. Measuring elapsed time helps balance the flow by exposing capacity constraints to focus improvement efforts. DBR works best where touch time is low, while more project-like environments require different approaches.

1. Production Concepts Evolution
S t a n d i n g o n t h e s h o u l d e r s o f o n e g i a n t
An interpretation of Dr. Eli Goldratt’s article
on Operations Management Philosophy
E l i G o l d r a t t 1 9 4 7 - 2 0 1 1
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mail@yossibonomo.com

2. simplification is a key to
resolving problems that may
seem to be very complex.
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3. Circa 2009, Dr. Eli Goldratt wrote an article by
the name of “Standing on the Shoulders of
Giants – Production concepts versus
production applications, The Hitachi Tool
Engineering example”.
This presentation is a summarization of that
breakthrough article
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Background
• Goldratt’s developed this operations management application
guideline, based on the Theory of Constraints (TOC) which he initially
introduced in his international bestseller “The Goal”.
• The most successful production organizations around the globe today
implement that approach as it is outlined in the article.
• In this presentation I am merely trying to summarize and simplify the
key elements and ideas it represents.
• In that regard I see myself as standing on the shoulders of one giant
(Eli Goldratt) and reciting, summarizing and dissecting his wisdom but
not further developing his ideas into something which I can claim as
my own

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Introduction - Continued
The article is structured in the following way:
a) It presents the evolution and fundamentals of Operations
Management and the basic supply chain concepts
b) It describes the boundaries of these concepts
c) It provides a more granular, time based approach (DBR) that is
applicable to a wider range of unstable environments
d) It illustrates a specific example (Hitachi Tools) – Will not be covered
here.
e) It describes the boundaries of DBR
In this presentation I will adhere to the same structure

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Operations Management Evolution
Implementing Ford’s Flow Line
Henry Ford revolutionized mass production by introducing flow lines.
The key for effective production is
improving the overall flow of products
through the operations
Flow means Inventories are
moving. If they’re not moving then
they accumulate
In order to achieve a better flow
the space allocated for inventory
must be limited.
Balancing the flow is based on
visibility into where work centers
inventories keep accumulating
Local Efficiencies must be
abolished
Increased
Throughput
A Mechanism that guides the operations when NOT to produce
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Operations Management Evolution
Flow Line Boundaries
• The Flow Line concept was feasible and used only in
environments where a line can be dedicated to produce a
single product.
• At Toyota (and many other industries and organizations) -
small batches of different products were needed therefore
lines couldn’t be dedicated.
• As a result Taiichi Ohno came up with the idea of the Kanban
system inspired by American Supermarkets.
The key objective still remains to
create a mechanism that guides the
operation when NOT to produce

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Production Major Limitation: Can’t have Dedicated Lines, Work Centers retooling/Setup duration
takes a very long time
Operations Management Evolution
Implementing Toyota Production System (TPS/JIT/Lean)
Limited Batches Unbalanced FlowFrequent RetoolingKanban Implemented
Implementing the Kanban System Initially
led to Throughput (TP) Reduction – an
undesirable outcome!!!
To increase TP Ohno focused on rebalancing the flow by taking the following major actions:
1. Drastically reduction of setup duration.
2. Gradually reduce Inventory until flow is disturbed, revealing which Work Centers to focus
on. Addressing root cause before commencing with Inventory Reduction.
As a result remarkable production Improvements were achieved

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Operations Management Evolution
Common Ford and TPS Supply Chain Concepts
1. Improving Flow (or lead time) is a primary objective of
operations.
2. This objective should be translated into a practical
mechanism when not to produce.
3. Local efficiencies must be abolished.
4. A focusing process to balance the flow must be in place

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The Boundaries of TPS
TPS Assumes a stable environment. Car models change only once a year and most
vehicle components remain the same Year over Year.
Most industries are unstable and they have much more to gain from better flow
then stable environments do:
Instability due to
short product’s life.
Overproduction
becomes
obsolescence
Long production
Missing the market
demand
Instability in
demand over time
per product
Satisfy the demand
from stock
High finish goods
inventories
High level of
shortages
Instability in overall
load/uneven orders
Poor due date
performance
Add more capacity

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A Time Based Approach
Objective
The key objective is to improve flow using Time,
rather then Space (Ford) or inventory (TPS), as the
base mechanism when NOT to produce
Time
Much less sensitive to
disruptions
Restrict the overall amount
of work in the system rather
than 2 work centers
Work isn’t being
restrained artificially.

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A Time Based Approach
Challenge
90%
10%
Lead Time
Time in
Queues
Touch Time
• Relatively short Touch Time in
most industrial settings makes it
extremely difficult to accurately
calculate release of materials
through MRP systems
• A bird’s eye view approach is needed to determine
how much time before the due date of an order
should the material be released?

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A Time Based Approach
Management Attention Impact
Companies that
implement successfully
Ford or Ohno’s systems
• Touch Time<=1%
• Priorities are “Hot”, “Red Hot”,
“Do it Now”.
• Poor due-date
performance
• High Inventories
• Long Lead Time
Majority of “Conventionally” run companies.
Time Buffer is the time interval of release of material
before the Due Date. TT is negligible since >99% of time
material is in Queue.

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A Time Based Approach
Local Efficiencies – different approaches
When Upstream
Resources aren’t a
bottleneck and they
run out of work
local efficiencies must
be abolished.
Ford and Ohno’s Operations Philosophy
Common Belief – Strive to achieve maximum resources utilization
Release more
material
Longer
Queues
Missed Due
Dates
Release material
sooner
Increase
Capacity
Ensure no
unnecessary work is
initiated

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A Time Based Approach
Phase 1 - Improving Flow – Immediate results
For “conventionally Run” companies located on the upper right slope we need to :
Reduce time buffers (TB) by half of the current Lead Time (LT).

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A Time Based Approach
Phase 2 – Creating a priority system
“Trying to be more accurate then the noise doesn’t improve things but makes them worse.”
Current Lead Time (LT) >> Touch Time (TT)
New Time Buffer (TB) > TT
Applying
phase 1
In Phase 2 the Elapsed Time from order released is measured.
Order is
released
Order is
Completed
New Time Buffer (TB) > TT
1/3 1/3 1/3 Actual Elapsed Time > TB
Priority 1Priority 2Priority 3Priority 4
• Managing batches (orders) within the color is a noise.
• Local Efficiencies must be abolished

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A Time Based Approach
Phase 3 – Focusing Process to balance the flow
Phase 1: Choking
release of materials
Abundant capacity is
exposed
Capacity Constrained Work
Centers are exposed
Identified through
queues in front of them
Exploit the Constraint. Ensure Work
Center is fully occupied and isn’t idle.
Subordinate to the constraint. Offload
work to work centers with excess
capacity
TOC
Focusing
Step #1
TOC
Focusing
Step #2
TOC
Focusing
Step #3
Check quantity of Red Status orders:
• <5% - Decrease TB
• >10% - Increase TB
1
2
3

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A Time Based Approach
DBR
The Bottleneck – The Constrained
Work Center
Choking the release of material
Translating Due Dates to Release
Dates
Drum Beat
Buffer
Rope
A Time base application of Theory of Constraints

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The boundaries of DBR
• DBR assumes environments with relatively short Touch
Time (<10% of LT), this is where it becomes most
effective.
• Environments where the TT is >1/3 of LT are called
Project Environments
• For These environments a different application is
needed – “Critical Chain Project Management”.