Friday, November 18, 2005

Making a worker work Vs Profiting from him

Plants want to utilize each workers capacity to its fullest. They demand everyone work continously for as many hours as possible. However, when workers work on a non-bottleneck machine and produce more than the bottle neck, or more than the market demand, their production is out of sync with the flow of the system. They are not adding value but tying up money in inventory.
Source utilization is using a resource to move towards the goal.

Monday, November 07, 2005

Balance flow with demand. Not capacity with demand

It might seem luring to isolate each process and look at it separately and analylize if it satisfies the market demand. However, the system should be looked at as a whole.
Therefore demand should not be balanced with capacity but with flow. The flow is determined by the capacity of bottleneck. Therefore the capacity of the process is determined by the bottleneck. The bottle necks should be placed at the beginning of a process to regulate the flow of the process.

The simplest way to recognize a bottle neck is to locate the machine with largest amount of inventory in front of it.