About this Presentation
The Viable Vision (VV) is to turn the current sales into annual net profit in 4 years. The main elements are significantly increasing sales volume and ensuring the full support of the logistics to meet the market requirements. The focus of this presentation and simulation is to experience the capacity considerations during the VV project. We need to predict by how much we need to increase the sales volume. Net profit is T – OE. T = 55% OE is about 65%. NP = -10%. OE changes but not linearly; incrementally. An example is given from the base line to two different scenarios. Sales should go up by 4 fold. What is the impact on capacity and OE? Additional OE is computed based on second shift, purchasing machinery, hiring workers, etc. The various scenarios of a manufacturing facility are simulated for three years and the results used to see progress on the Viable Vision. The main insights are: the market is the major constraint; lead time depends mainly on the excess capacity of the weakest link; plan only what is absolutely necessary to achieve the objectives; protect planning with buffers; control your execution both through monitoring the actual use of buffers and by monitoring planned load on critical resources; when you strive to increase sales dramatically be ready to elevate the capacity; simplified-drum buffer rope (SDBR) is effective and simple to use; buffer management is critical for maintaining the right priorities in highly dynamic environments; planned load is effective for monitoring the capacity levels of critical resources and the advantage of adding full shifts rather than overtime is by keeping the appropriate amount of protective capacity of non-constraints in place.
What Will You Learn
To help you get the most value from this session, we’ve highlighted a few key points. These takeaways capture the main ideas and practical insights from the presentation, making it easier for you to review, reflect, and apply what you’ve learned.
The speaker emphasizes the importance of having a clear vision and the challenges of implementing it.
The speaker discusses the need for significantly increasing sales and ensuring value delivery.
The speaker discusses the importance of having a robust logistical system in place to handle increased sales.
Instructor(s)
Eli Schragenheim
Eli Schragenheim is a well-known international management educator, author and consultant active in various fields of management. He worked with a huge variety of organizations all over the world, including public-sector organizations, industrial, high-tech and start-ups. Since he had joined Dr. Eliyahu M. Goldratt, the famous creator of the Theory of Constraints (TOC) in 1985, Eli Schragenheim had taught, spoke at conferences, and consulted all over the globe. Eli Schragenheim is the author of several books on various aspects of management. His last book, Throughput Economics – Making Good Management Decisions, together with Henry Camp and Rocco Surace, was published in July 2019. Eli Schragenheim first book Management Dilemmas (1998) showed a variety of problematic situations in management and the rigorous analysis leading to the right solution. Next he collaborated with William H. Dettmer in writing Manufacturing at Warp Speed. In this book the new concept of Simplified-DBR, now a key concept in production planning according to TOC, was introduced. He collaborated with Carol A. Ptak on ERP, Tools, Techniques, and Applications for Integrating the Supply Chain, and with Dr. Goldratt and Carol Ptak on Necessary but Not Sufficient. In 2009 his book Supply Chain Management at Warp Speed, with William H. Dettmer and Wayne Patterson was published. In March 2015, Eli has opened a blog, now containing more than 140 articles on various topics in TOC that everybody can access.