Tie the Rope

Maximize throughput, not production

Published: Monday, August 1, 2016 - 15:46

For the sake of argument, let’s say you’re aware of an issue that’s holding your enterprise performance back, and you know what to do about it. At that point, there are seven key actions you can take to rapidly implement change, which in turn will allow you to respond to market changes with short lead times and less cash tied up in expenses or stock. You can read about the seven steps in chapter 5 of my book, Manufacturing Money, but for now let’s focus on step three: Tie the rope.

“Tying the rope”, as defined by Eliyahu Goldratt, essentially means that we don’t release raw materials, work orders, or other information to the beginning of the process at a faster rate than the process constraint can handle. This has some similarities to creating “pull” in lean processes. One of the chief sources of distraction that takes people away from the schedule is when they have many choices for what to produce next. By definition, there can only be one optimal schedule to best use the constraint.

Figure 1: A representation of a simple process

In the diagram in figure 1, the constraint is process B, which can only produce 10 units per hour, whereas the other processes can produce at a faster rate. To tie the rope in this case, we release only sufficient raw material to support a production rate of 10 units per hour. Likewise investing in any equipment other than for process B is a waste of money. Investing in more equipment for process B will continue to be a waste of money until we have boosted the output of B to its absolute maximum. Until B is running at its optimal cycle time—three shifts per day, seven days a week, 365 days a year—we technically haven’t maximized its output and can defer investing in more capacity.

You may not choose to run this type of production schedule for other reasons, but be conscious that investing in machinery should be done only once you have absolutely made the current constraint produce at its maximum output. This means that other processes (A, C, and D) are going to have spare capacity and will remain idle at times. But the objective is to maximize the throughput, not production.

Production workers shouldn’t have to wade through lots of WIP to see where an order is, nor should they have to make a complex decision about what job to make next. Their responsibility is to follow the schedule and process the WIP in front of them, which will not be much, in the sequence defined.

Raw materials will not be released until the appropriate time on the schedule so (after the initial flush of old stock) it becomes very easy to follow the schedule, since you have no other option.

When we tie the rope, we’ll see the shop floor production areas open up, and the surplus capacity in other work areas will be readily visible.

Enterprise resource planning (ERP) and other scheduling software often ask us to schedule each individual work station and generate schedules for each machine to maximize efficiency. This is a lot of work and completely unnecessary. Your existing system can usually be adapted to give you the information you need, even if it’s a purely manual system. Remember: The goal is to maximize throughput, which is done by maximizing the production of the constraint. Therefore, we only need one schedule—the constraint schedule. This eliminates the need for complex software.

A tale from the real world

A refrigeration factory had a problem with missing doors for one of its high-margin product lines. There were many, many doors in stock; however, large numbers were missed from the assembly line each day. The door line-area supervisor would do four or more stock counts a shift to try and minimize (not eliminate) doors being missing at the point of the assembly line where they were required.

Upon analysis, the metal-folding process that produced the skin for the door construction was found to be the constraint. A schedule was developed for this line to best meet market demand. We came in at 5 a.m. the next morning to issue the schedule, talk to the day shift that operated the machinery, and to be ready to help solve any issues we had with following the new schedule. That day we worked two hours overtime, since we were behind where the schedule said we needed to be.

By the end of the third day, we had eliminated the shortages from the assembly line, production was stable, and overtime was no longer required. The production supervisor had an extra two hours a day to do his job and a lot less stress. More fridges were being made per  the schedule and shipped out to customers as the back orders were reduced. No software or capital equipment was required.

This is an excerpt from the book, Manufacturing Money (Amazon Digital Services, 2015) by Jason Furness and Michael McLean. See article on Manufacturship blog.

About The Author

Jason Furness

Jason Furness, CEO and founder of Manufacturship, is an executive coach who provides lean manufacturing training and lean consulting in a pragmatic, hands-on way that gets clients results in a fast and sustainable manner. Furness oversees the development and delivery of Manufacturship’s curriculum, leads the mentoring of business owners and managers, and sponsors all client projects. During his 20-year career he has led 30 transformation projects for small and medium-sized enterprises. Furness is the co-author of Manufacturing Money: How CEOs Rapidly Lift Profits in Manufacturing (Amazon Digital Services, 2015).