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Production/Operations

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Operations strive to meet the delivery date promises made by sales. What is the basic conflict faced by operations managers? It stems from the apparent conflict between trying to ensure throughput (which often means taking actions like breaking a set-up that hurt local efficiency), and trying to control costs (which usually means taking actions like running large batches to ensure local efficiency). TOC questions the fundamental premise that maximizing local efficiencies actually controls “cost”. It is not always true that an increase in individual or departmental "efficiency" reduces costs. What may occur is simply an increase in work-in-process or finished goods inventory, without a corresponding increase in shipments of sold product. In such instances, TOC argues that costs have gone up, not down!

The TOC approach to production control is known as “Drum-Buffer-Rope”. It seeks not to maximize the output of every resource and department; rather the idea is to maximize the output of the pace setting resource(s). The pace setter(s) is referred to as the “Drum” because the entire operation should ‘march to its beat.’ A time “Buffer” is used to protect the Drum from normal disruptions in performance by releasing materials to the gateway operations a specified amount of time before they are due at the drum. A “Rope” mechanism is used to communicate between the Drum and the gateways to be sure that materials are not released too soon! “Buffer management” is a dynamic real-time feedback system that makes visible potential problems without creating false alarms.

This approach sounds very simple and very common sense. However, in practice it is very difficult for most organizations to fully implement. This is because supervisors and workers alike have lived by an ethic that says, “never run out of work.” To have no materials at your workstation for processing is thought to be very bad by common practice today. However, TOC claims that approach is dead wrong. Most resources should have some times when there are not materials available for work if the system is working properly. As a metaphor for this new work ethic, Goldratt chose the Roadrunner of cartoon fame in the U.S.A. It is an animal that has only two speeds: full speed and full stop. I like to use the acrostic PRIDE to describe the basic rules for the processing of work using the “Roadrunner Work Ethic.”
Priority sequence (FIFO and EDD are common)
Rated speed (don’t cut corners or slow down)
Immediate start
Defect free
Expeditious transfer (move it to the next station immediately)

For more information contact Mike Willett or Jeff Mohr or consult the following resources:

  • “The Goal” by Goldratt
  • “Manufacturing at Warp Speed” by Schragenheim and Dettmer
  • “Critical Chain” by Goldratt (Chapters 11, 12, and 15 contain summaries of what a character in this book learned while doing a year long sabbatical at UniCo – the company in “The Goal.”)

Production/Operations Diagram.