An Optimized Production Technology Approach to Design for Throughput

Abstract

Many manufacturing organizations are losing their competitive position due to a large number of reasons discussed in this paper. To regain a competitive position, organizations must clearly understand their goals. The Goal for a manufacturing organization should be making money now and in the future [1,2]. Producing products, high utilization, keeping people busy, high quality, good customer service, etc., are means to the Goal but not ‘The Goal’ itself. To achieve an organization’s goal, management must turn to OPT. OPT (Optimized Production Technology) is the original and most advanced constraint based advanced planning and scheduling system [3,4]. It is the practical implementation of the Theory of Constraints in the modeling, planning and scheduling of activity based business. OPT has proven its applicability in job shop, repetitive manufacturing and process industries all over the world. Therefore, shop floor issues, such as bottlenecks, setups, lot sizes, priorities, random fluctuations and performance measurements, are treated in great depth. The OPT philosophy incorporates nine rules which, when followed, can help move the organization towards the goal of making money. Underlying each of the rules is the understanding that effective management of an organization takes a global perspective of all resources and their interrelationship to achieve the goal. These rules coupled with a set of measurements: Throughput, Inventory and Operating Expenses, would lead any manufacturing organization to fulfilling the goal. Since few literatures have covered the general application of these measures, this paper will focus only on Throughput. The paper will discuss the step-by-step implementation procedures that would help industry in designing their systems for throughput.