Rules for Bottleneck Scheduling in Toc

7/29/2019 Rules for Bottleneck Scheduling in Toc

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RULES FOR BOTTLENECK SCHEDULING IN TOC A proprietary scheduling system for TOC by Goldratt initiated aggressive marketing of software, Optimized

Production Technology (OPT). The principles involved in OPT are helpful in handling bottlenecks in the

scheduling of the production systems. These rules are as follows:

Rule 1: Balance Flow, not Capacity

Line balancing, which is an example of tradition system, attempts to balance the capacity of each work-station.

Work-stations are so designed that their capacity is nearly same and, hence, there is a high utilization factor.

OPT, using TOC on the other hand, focuses on balancing the flow within the plant (rather than resources as in

line-balancing). This will ensure the identification of bottleneck (on constraint). Once the bottleneck is handled

for improvement, the throughput of the system increases.

Rule 2: The level of utilization of a non-bottleneck resource is determined not by its own potential but by some

other constraint in the system.

To understand this rule, let us consider the four classis relationship of bottleneck and non-bottleneck resources:

(i) Type I Relationship

In this relationship, a bottleneck resource (B) feeds work-in-process material (WIP) to a non-bottleneck (N)

resource. Let us presume that both resources (B and N) are placed in the middle of an assembly line. Thus,

these are followed and preceded by few other resources, which are non-bottleneck (N). Fig.29.5 depicts this

relationship:

Type I relationship

For this relationship, despite non-bottleneck resource being faster, cannot deliver faster than the output rate of

bottleneck resource, which is B. Thus, the non-bottleneck resource is a starving resource, which is under-utilized.

This is also illustrated in Figure 29.2

(ii) Type II Relationship

In this relationship, a non-bottleneck resource (N) feeds work-in-process material WIP) to a bottleneck (B) resource.



Type II relationship

For this relationship, the difference between the supply rate of non-bottleneck (N) and bottleneck (B) is the

inventory pile-up rate between the non-bottleneck and bottleneck resources (Fig.29.6). The through put is still

limited by the capacity of the bottleneck.

(iii) Type III Relationship

In this relationship, a bottleneck and other non-bottleneck resources feed parts to an assembly operation (whichis a non-bottleneck).



Type III relationship

For this relationship, the difference between non-bottleneck and bottleneck resource is the inventory pile-up rate.

The assembly resource (A) is also under-utilized, as its capacity is faster than that of bottleneck resource.

(iv) Type IV Relationship

In this relationship, both non-bottleneck and the bottleneck resources directly supply in the market.

Type IV relationship

The bottleneck resource, whose rate is lesser than the market demand, is utilized at its 100% capacity. The non-

bottleneck resource can be utilized at 100% only when the market demand increases otherwise it will remain

under utilized.

Through all the four relationships just discussed, following guidelines emerge:

(a) Utilize bottleneck at 100% capacity.



(b) Under-utilize non-bottleneck to eliminate the inventory pile-up.

(c) The level of utilization of non-bottleneck is determined by the capacity of bottleneck and not by its own

capacity. In the last (IV) relationship, it is driven by market demand.

(d) Enforcing idle time on non-bottleneck and tolerating a certain level of inventory pile-up should have an optimal

trade-off.

(e) Throughput of the plant is limited by the capacity put of the bottleneck resource (which is the constraint).

Therefore, these rules suggest that the non-bottleneck should not produce more than the absorption-capacity of

bottleneck resources, otherwise there will be an increase in inventory pile-up and the operating expenses. Thus,

under-utilization of non-bottleneck is the only prudent strategy.

Rule 3

Rule 3: Utilization and activation of a resource are not synonymous or the same thing.

Traditionally, activation of resource and utilization of resource are treated as same thing. Goldratt, in his TOC,

treats these two issues separately. First, let us understand: what is the difference between utilization and

activation?

Activation: “What we should do” is activation. It is the indication of doing the required work. Activation is

directed towards effectiveness. It is system’s measure of performance or holistic approach. A non -bottleneck

machine may be active (producing 100%), yet not doing anything useful beyond the capacity of bottleneck.

Utilization: “What we can do” is utilization. It also includes performing work not needed at a particular time.

Utilization is directed towards efficiency. It is a reductionist emasure of performance or mechanistic approach.

Example

Both non-bottleneck and bottleneck operating at 100% efficiency

Let us assume that a non-bottleneck has a capacity of 100 parts per day while a subsequent bottleneck has

capacity of 60 parts per day as shown in fig. When both resources work at 100% efficiency, the inventory

building-up is (100-60) or 40 parts per day. However, at a global or holistic level, the system (combined) is

operating at only 60% efficiency level as throughput is 60 parts per day. Thus, the utilization of non-bottleneck

(i.e. 100%) is not same as its activation (i.e. 60%) as it is effective for only 60% of its capacity.

Traditionally, activation and utilization have been considered as same. TOC/OPT/Synchronous manufacturing

treats these separately.



Therefore, the scheduling of all non-scheduling of all non-bottleneck resources of the manufacturing system

should be done on the basis of the constraints of the system (i.e., bottleneck resources). A non-bottleneck

resource. However, it cannot remain busy all the time.

Scheduling Rules in TOC (Goldratt)

1. Balance the flow, not capacity

2. The level of utilization of a non-bottleneck resource is determined not by its own potential but by some other

constraint in the system.

3. Utilization and activation of a resource are not synonymous or the same thing.

4. An hour lost at a bottleneck is an hour lost for the entire system.

5. An hour saved at a non-bottleneck is just a mirage.

6. Bottlenecks govern both throughput and inventory in the system.

7. Transfer batch may not and many times should not be equal to the process batch.8. A process batch should be variable both along its route and in time.

9. Set the schedule by examining capacity and priority simultaneously and sequentially. Lead times are the result

of a schedule and cannot be predetermined.

Rule 4

Rule 4: An hour lost at a bottleneck is an hour lost for the entire system.

Let us presume that there is sufficient demand for parts in the market. Now, if the bottleneck of the previous

example (in Rule 3), is running at 100% capacity and, by chance, it stops for an hour, say, for repair and

maintenance. An hour lost on this bottleneck will directly reduce the overall production rate (throughput) by one

hour. This will be the case, even if there is enough inventory pile-up before the bottleneck. An hour lost on

bottleneck can never be recovered because this machine will never have time to process parts, which would

otherwise been made in the lost time. This is due to non-availability of buffer capacity for bottleneck. Therefore,

an hour lost on bottleneck is an hour lost for the entire factory. In short, if the bottleneck has lost one hour, the

overall impact is: “the factory has topped for one hour”.

Rule 5

Rule 5: An hour saved at a nonbottleneck is just a mirage.

For a non-bottleneck resource, there is some idle time, during which either this resource is unutilized or

producing inventory pile-up. Even in case the working or processing time of this resource is crashed, the overall

impact on the system will be zero as far as throughput is concerned. This is because throughput is dictated by

the bottleneck resource. Therefore, TOC advocates attack on bottleneck for increasing its efficiency.

Let us look at the set-up time, which is needed for setting the tool/machines, etc., for each batch of part-

processing. Traditional system treats set-up time for bottleneck and non-bottleneck resource equally. TOC

advocates different approaches.

In Table above an example is presented. In this, the bottleneck resource processes one batch of part in 14 time

units (hour), while non-bottleneck does it in 12 time units (thus, has 2 units of idle time per batch). Read this

table column-wise. The processing of batch of this part first goes to bottleneck, followed by on the non-

bottleneck. Originally, due to lesser processing time (PT) on the non-bottleneck, there is an idle time (IT) of 2

hours on non-bottleneck. When, the set-up of bottleneck is squeezed by one hour, the idle time of non-

bottleneck reduces by one hour and the system throughput increases due to faster disposal at bottleneck.



However, when the set-up of non-bottleneck is squeezed by one hour, its idle time increases by one hour due to

no change at bottleneck resource. Throughput remains same:

Effect of an hour saved on bottleneck or non-bottleneck

Thus, an hour saved on non-bottleneck has no impact on the system performance (which is the throughput in

this case).

Looking at the condition of lower set-up time of non-bottleneck, we find an important observation. Lower set-up

time of non-bottleneck can facilitate more numbers of set-ups and, thus, batch-size can be reduced in part

processing. The effect of lower batch size means:

(a) Lower build-up inventory

(b) Lower operating expenses

(c) No effect on throughput

Rule 6

Rule 6: Bottlenecks govern both throughput and inventory in the system.

One of the most important reasons to maintain in-process inventory is to keep bottleneck machine busy. There

must be no time loss on it. WIP is to ensure continuous feed to bottleneck. Throughput of the system is

governed by the bottleneck and an hour lost/saved on it will reduce/increase the system throughput. This

feature is already explained in the previous example.

Rule 7



Rule 7: Transfer batch may not and many times should not be equal to the process batch.

Lot size is an important variable, which plays vital role in inventory build-up and throughput. OPT advocates two

lot sizes (rather than one, as in traditional system). These are transfer-batch and process-batch. From part point

of view, lot size is the transfer batch size. However, from resource point of view, lot size is process batch size.

Let us look at the example to follow:

Example

Let us consider an example. Suppose a part requires three operations: milling, drilling and inspection. The

processing time for individual part and for one processing-batch of 100 parts is as follows:

Operation Processing Time for one part Processing Time for one batch of 100

parts

Milling

Drilling

Inspection

0.45 hour

0.35 hour

0.20 hour

45 hours

35 hours

20 hours

Total 1.00 hour 100 hours

Process batch and transfer batch are equal

Process batch is greater than transfer batch

When process-batch is same as transfer-batch, the situation is same as in Fig. Thus, when milling of 100 items iscomplete, they are transferred to drilling and so on. The total time is 100 hours. If the transfer on milling,



transfer-batch is smaller than process-batch (which is 100), a small batch (say 44 parts, after getting processed

on drilling, transferred from milling to drilling after every 20 hours; and 57 parts, after getting processed on

drilling, transferred to inspection after every 20 hours of drilling for this batch) may be transferred to next

operation on the process-sheet. The situation may be one like shown in Figure. In the modified scenario, there

will be a substantial reduction in total busy time of machines and overall increase in the throughput-time. In

addition, there will be marked reduction in inventory pile-up and operating expenses. Thus, one process-batch

(which is 100 in above example) needs one set-up on machines. However, in each process-batch, there may be

more than one transfer to next machines. As shown above, the smaller transfer batch (than process-batch)

increases the throughput, reduces inventory pile-up, reduces operating expenses and reduces the total busy time

of the resources

Rule 8

Rule 8: A process-batch should be variable both along its own route and in time.

The process-batch at different levels of manufacturing: both route-wise and time-wise, should be different.

Traditionally, we follow a fixed batch-size unless exceptional situation occurs. OPT argues against it. In OPT, lot

size is a dynamic decision, which should change as per time and situation. It should be decided upon issues such

as inventory level, set-up time/cost, material handling, flexibility and agility of the system, uncertainty on the

shop-floor as well as in market, etc. It the resource is non-bottleneck, we can afford to have smaller process-

batch; but if the resource is bottleneck, we should go for larger process-batch.

Rule 9

Rule 9: Set the schedule by examining capacity and priority simultaneously, not sequentially. Lead times are the

result of a schedule and cannot be preterminated.

In a tradition system (such as, MRP), the lead time is fixed and predetermined. However, OPT advocates that

scheduling must recognize that lead time is not necessarily a fixed quantity. It may vary as a function of

schedule. The schedule should be set by examining the capacity and priority simultaneously.

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