TOCICO

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.