Economic Order Quantity and Economic Production Quantity

Topics: Maintenance, Resource, Preventive maintenance Pages: 17 (5073 words) Published: January 4, 2011
Utilisation of Buffer Management to Build
Focused Productive Maintenance
Togar M. Simatupang
Massey University
January 2000
In today’s time based competition, high equipment productivity in a manufacturing line is necessary in ensuring a competitive company. Focused Productive Maintenance emphasises the importance of achieving profitability through equipment effectiveness. This paper demonstrates the logic of Buffer Management and Focused Productive Maintenance to shape competitive advantage in utilising resources. Some ideas for future research are given.

Total Productive Maintenance is a significant activity in creating an immutable manufacturing system against unexpected disruptions, which do occur during progressing customer orders (Nakajima, 1988). Breakdowns, fluctuations in set-up and processing time, non-instant availability of a busy resource, rush orders and quality problems are examples of disruptions. In the time competition era, managers should mobilise the available resources to minimise these inevitable disruptions (Patterson et al., 1995). Due to resource limitations, they have to focus their efforts to reap optimum results in contributing to the global goal, that is to make more profit now and in the future (Goldratt and Fox, 1992). These real results depend on how the managers arrange materials, jobs, and production resources into a robust schedule without jeopardising the profit.

Drum-Buffer-Rope (DBR) is a scheduling technique that attempts to accommodate the reality in shop floor such as statistical fluctuations, finite capacity variances, and dependent events (Goldratt and Cox, 1992). The schedule can be steered in execution by using Buffer Management. Buffer Management serves as a diagnostic tool in dealing with unexpected disruptions (Schragenheim and Ronen, 1991). The managers can trace the causes of any disruptions that may endanger on the profit and then special attention can be made to improve the system. This mechanism helps 2

productive maintenance to concentrate on the continuous improvement efforts in assuring the reliability of the operating system as a whole. This paper demonstrates the importance of Buffer Management in helping the managers in building Focused Preventive Maintenance (FPM). The review of the DBR scheduling technique is presented in the following section. The next section reveals how Buffer Management works to direct continuous improvement efforts. Then FPM can be formulated in order to gain real advantages from those ongoing improvement efforts. Avenues for future research are provided to highlight the research agenda on Buffer Management and FPM. Eventually, the last section describes some concluding remarks to provide issues in practice. Drum-Buffer-Rope

Every manufacturing company is subject to different capacities of resources. Managers have to ensure that the materials can flow fluently through these resources to fulfil demand. The least capacity of resource that is equal to or less than the required capacity of demand is termed a bottleneck (Goldratt and Cox, 1992). Resources that are likely to disrupt the planned flow of product through the production line if they are not properly scheduled and managed are called capacity constraint resources (CCRs), or simply constraint resources. Constraint resources are critical in the production line since they reflect the weakest link that determines the overall output (Dettmer, 1995). If they are not managed properly, they may prevent the system from maximising throughput and hence profit. Here, throughput is defined as the amount of money that can be generated by the manufacturing company through sales over a specified period of time (Goldratt and Cox 1992).

Besides throughput, there are two other ways to measure the performance of bottom line or operational level (Goldratt and Cox, 1992). The second measure is inventory that measures the quantity of money invested in materials that the...

References: Dettmer, H.W., “Quality and the Theory of Constraints”, Quality Progress, April,
1995, pp
Goldratt, E.M., The Haystack Syndrome: Shifting Information Out of the Data Ocean,
North River Press, Croton-on-Hudson, NY, 1990.
Goldratt, E.M., Cox, J., The Goal: A process of Ongoing Improvement, 2nd ed., North
River Press, Croton-on-Hudson, NY, 1992.
Nakajima, S., Introduction to Total Productive Maintenance, Productivity Press,
Portland, OR, 1988.
Quarter, 1995, pp. 61-64.
Schragenheim, E., Ronen, B., “Buffer Management: A Diagnostic Tool for Production
Control”, Production and Inventory Management Journal, Second Quarter, 1991,
First Quarter, 1995, pp. 8-14.
Umble, M.M., Srikanth, M.L., Synchronous Manufacturing: Principles for World
Class Excellence, South-Western Publishing, Cincinnati, OH, 1990.
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