An exhaustive link on Theory of Constraints
It was interesting playing the Theory of Constraints inventory accumulation game in the assembly line. The game has been adapted to be played in a classroom setting. Coloured plastic coins were used to depict the RM / WIP / FG inventory in the system. Three production settings representing three teams were finalised to demonstrate that inventory accumulation can occur at any station .
Possible reasons for inventory pileup are -
1. poorly maintained machines resulting in high downtime - have effective maintenance policies, compute OEE.
2. poorly trained workers who are not productive on the shopfloor - depute them for training and skill upgradation
3. poor quality of raw materials resulting in defects and work stioppages - get supplies from relaible sources or give more training to the vendors
4. no timely deliveries of RM / WIP inventory at the different workstations resulting in stoppages
5. poor infrastructure and efficiency of logistics and transport / material handling equipment - improve the efficiency by proper design, capacity and physical layout of infrastructure.
Once the inventory pileup is removed, we find inventory pileup happens at another w/s and then we need to attack it.
Difference between Lean methodologies and Theory of Constraints :
Lean Methodologies try to give the best output from the existing setup by bringing in discipline, work place organisation, standardisation of processes and systems, early detection and correction of errors and defects with clear visualisation by motivating people and continuous improvement. It is a reactive approach. Theory of Constraints on the other hand is a proactive approach. It works to improve the existing setup itself by identifying reasons for inefficiencies and inventory pileups (bottlenecks) and eliminating them at the first instance.
Real Game Analysis :
On 15 Feb 2014, the game was played the second version of the game ( all initial stock only with the first workstation and none with the intermediate workstations) for 10 rounds by 9 assembly lines in the Operations class at Alliance University, Bangalore.
Each of the first workstations of the nine assembly lines were given an initial stock of 30 units of inventory. The production at each of the five workstations in each of the assembly line ( or in other words the machines which were working at each station) was randomly chosen from 1 to 5. The production from each workstation was decided by a random number generator between 1 and 5. In the initial round, only the items passed from upstream stations were passed to downstream stations,
The equation which guided movement of raw material from each work station was this :
items produced at each workstation = min(machines working, items passed from upstream station).
As the game progressed, each station started accumulating stock and thus the items despatched from each work station changed over passage of time.
Items passed from station i to station j = min ( items passed from upstream station i, stock at station i + machines working at station i ).
The game was played for ten rounds. The data is given below.
Assembly line Final O/P Bottleneck Stn Inv. bottleneck Throughput rate
II 17 4 5 17/30 = 0.58
III 18 2 3 18/30 = 0.6
IV - - - ( no team)
V 18 2 19 18/30 = 0.6
VI 17 2 3 17/30 = 0.58
VII 17 2 6 17/30 = 0.58
VIII 14 4 11 14/30 = 0.47
IX 16 4 6 16/30 = 0.53
X 18 4 9 18/30 = 0.6
The analysis of the game :
Assembly liners I had the highest throughput of 19 units, rate =0.633 while lines III, V and X had a throughput of 18 and a rate of 0.6.
The highest bottle neck at any workstation in any assembly line was observed as 19 and 16 on lines V and I respectively.
As per Eliyahu Goldratt's Theory of Constraints, we now have to turn our attention to the bottleneck stations (instead of concentrating on all the stations at the same time) and remove the bottle neck by way of better machines, techn, better training to workers , better quality of raw materials etc. etc.
After the initial bottle neck is removed ( bring the inventory to zero) continue the game for another ten rounds. Now another workstation may become the bottle neck. Work to remove the bottleneck for this station also. As the bottle neck is removed we find the throughput rate also improves, which is the success of the assembly line. As time was limited, we could not play the game for another 10 rounds and hence could not demonstrate to the students how the average throughput rate (for two rounds) increases.