Chase Aquilano Jacobs Book Chapter Review
Goal of the Firm
Performance Measurements
Unbalanced Capacity
Bottlenecks and Capacity-Constrained Resources
Basic Manufacturing Building Blocks
Methods for Control
Comparing Synchronous Manufacturing to MRP and JIT
Relationship with Other Functional Areas
Synchronous manufacturing refers to the entire production process working together in harmony to achieve the goals of the firm. Synchronous manufacturing logic attempts to coordinate all resources so that they work together and are in harmony or are "synchronized." In synchronized manufacturing system, the measured goals focus on total system performance, and not on localized measures such as labor or machine utilization.
Firms have to focus on three measures of the firm's ability to make money: net profit, return on investment, and cash flow. Financial measurements need to be used with other measures of throughput, inventory and operating expenses to help operations. The goal of the firm from an operations standpoint is to increase throughput while simultaneously reducing inventory and reducing operating expenses. Productivity is all the actions that bring a company closer to its goals.
Unbalanced capacity is preferable to an attempt to match capacity with market demand. Capacity constrained resources can become bottlenecks if their utilization is not scheduled carefully. Because each step in a process sequence is a dependent event, the ability to do the next process is dependent on the preceding one. Statistical fluctuations are the normal variations about a mean or average. Rather than balancing capacities, the flow of product through the system should be balanced.
A bottleneck is any resource whose capacity is less than the demand placed upon it. It limits the throughput. A capacity-constrained resource (CCR) is one whose utilization must be scheduled carefully so it does not become a bottleneck operation.
Production cycle time is made up of setup time, process time, queue time, wait time, and idle time. Queue time is the greatest for parts waiting to go through a bottleneck. An hour saved at the bottleneck adds an extra hour to the entire production system but an hour saved at a nonbottleneck is a mirage and only adds an hour to its idle time. The important point to note here is that one has to develop a plan for saving time at non-bottleneck work stations, but implement them only when necessary.
Batch size determination is important in synchronous manufacturing. For bottleneck resources, larger batch sizes are desirable. For nonbottleneck resources, smaller process batch sizes are desirable and reduce work-in-process inventory.
MRP and JIT are often compared to synchronous manufacturing. MRP uses backward scheduling after being given a master production schedule while synchronous manufacturing uses forward scheduling because it focuses on the critical resources. JIT like synchronous manufacturing does an excellent job in reducing lead times and work in process but is limited to repetitive manufacturing and requires a stable production level.
The production system must work closely with the other functional areas to achieve the best operating system. Cost accounting, for example, is changing to support production performance measures. Marketing communicates and conducts activities in close harmony with production for better operations too. The firm should operate as a synchronized system with all parts in harmony and supporting each other. The key to competitive advantage through operations is for the firm to operate as a synchronized system, with all parts working in concert. Companies that do this well are well on their way to achieving the fundamental goal of the firm -- profitability.
Topics covered in the chapter
Synchronous Manufacturing Defined
Goal of the Firm
Performance Measurements
Financial Measurements
Operational Measurements
Throughput Defined
Inventory Defined
Operating Expenses Defined
Productivity
Productivity Defined
Unbalanced Capacity
Dependent Events and Statistical Fluctuations
Bottlenecks and Capacity-Constrained Resources
Bottleneck Defined
Nonbottleneck Defined
Capacity-constrained Resource (CCR) Defined
Basic Manufacturing Building Blocks
Methods for Control
Time Components
Finding the Bottleneck
Saving Time
Avoid Changing a Nonbottleneck into a Bottleneck
Drum, Buffer Rope
Importance of Quality
Batch Sizes
How to Treat Inventory
Comparing Synchronous Manufacturing to MRP and JIT
Relationship with Other Functional Areas
Accounting's Influence
Marketing and Production
Case: Solve the OPT Quiz—A Challenge in Scheduling
Source
Operations and Supply Chain Management, Global edition
11th Edition
F. Robert Jacobs, Richard Chase
McGraw Hill, 2011 - Business & Economics - 802 pages
Goldratts Rules
Do not balance capacity balance the flow.
The level utilization of a nonbottleneck resource is not determined by its own potential but by
some other constraint in the system.
An hour lost at a bottleneck is an hour lost for the entire system.
Bottlenecks govern both throughput and inventory in the system.
Transfer batch may not and many times should not be equal to the process batch.
A process batch should be variable both along its route and in time.
Priorities can be set only by examining the systems constraints. Lead time is a derivative of the schedule.
Performance Measurement - Operational
1. Throughput
2. Inventory
3. Operating expenses
Performance Measurement - Financial
Net profit
Return on investment
Cash flow
Capacity Related Terminology
Capacity is the available time for production.
Bottleneck facility or resources happens if capacity is less than demand placed on resource.
Nonbottleneck facility or resources is a resource for which capacity is greater than demand placed on resource.
Capacity-constrained resource (CCR) is a resource where the capacity is close to demand placed on
the resource.
Time Components of Production Cycle
Setup time is the time that a part spends waiting for a resource to be set up to work on this same
part.
Process time is the time that the part is being processed.
Queue time is the time that a part waits for a resource while the resource is busy with something else.
Wait time is the time that a part waits not for a resource but for another part so that they can be
assembled together.
Idle time is the unused time. It represents the cycle time less the sum of the setup time, processing time, queue time, and wait time.
Inventory Cost Measurement - Dollar Days
Dollar Days is a measurement of the value of inventory and the time it stays within an area.
Ud 12.5.2022
Pub 10.12.2011
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