Capacity Management & Theory of Constraints
Capacity management on the face of it seems simple. The goal is to align capacity with that of load and demand. To do that we must understand; what capacity is available and when it is available; and what capacity is required and when it is required. In practice however, this is extremely complicated as every resource and machine is examined individually and yet still must follow the route. However, computers and more explicitly MRPII can run the algorithms very quickly interrogate every machine and every route in the whole plant or in project environments across all the projects.
The solution is extremely complex and gives us a precise yet wrong answer, which is extremely difficult to interrogate manually. It cannot deal with the variations that happen with load, capacity and execution flow. Despite this companies still invest huge sums of money and time in MRPII and the quest for accurate data.
Theory of Constraints
The best solutions are simple solutions, if they are simple they can be understood. Theory of Constraints (TOC) gives us a simple solution to capacity management by applying focus. The premise is that in a system there are only a few constraints that need to be considered when managing capacity and ensuring that it is aligned with load and demand. These are the Capacity Constrained Resources (CCR's), this means all other resources have more capacity. Therefore, if we only load the system to the capacity of the CCR’s, the system as a whole will have enough capacity. Work is released a buffer time before the CCR’s and a buffer time after the CCR’s is assigned to give a delivery date and protect the system from the variability in execution.
TOC has many more things to better manage capacity in manufacturing, service and project environments that cannot be described in the introduction to the forum.
The Forum will provide the opportunity to help each other develop improved understanding on capacity management of systems and the use of the Theory of Constraints.
Andy, a Mechanical Engineer prior to starting his consulting career, held a number of Senior Management positions within the Aerospace and Defence industry in the UK, for fifteen years. In 2000 he joined Goldratt UK and has been the Managing Director since 2007.
Over the last sixteen years Andy and Goldratt UK have worked with hundreds of organisations implementing TOC including; Honeywell, Bombardier, Siemens, Johnson Matthey and many more SMEs.
Andy is also an owner and Director of software company RopeWeaver who provide TOC based software for SME’s in Operations and Distribution, and in 2013 Andy became shareholder in Tenon Engineering a manufacturing business engineering and producing instrumentation products.