Original Date: 06/26/1995
Revision Date: 01/18/2007
Best Practice : Synchronous Manufacturing
Dayton Parts, Inc. (DPI) has implemented a manufacturing philosophy based on synchronous manufacturing where production flow (not capacity) is balanced to meet customer demands. Under this system, typical measurements such as efficiencies of individual operations or operators are not used. Instead, changes are measured by impact on the overall system throughput. These concepts have been developed based on the book The Goal by Eliah Goldratt and is required reading in all plant departments.
DPI uses selected measurements to guide the focus of continuous improvement projects aimed at improving overall throughput, while reducing operating expense and WIP inventory. The process first identifies system bottlenecks which are the controlling resources of the system, and then tries to exploit those bottleneck functions. Under the throughput system, an hour wasted at a system constraint or bottleneck is equal to an hour on the complete system, and the use of a non-bottleneck resource is controlled by the constraints of the system.
Since the implementation of this concept in 1992, DPI has developed an employee involvement continuous improvement program to help identify and correct bottleneck problems. As a result, average order fill across all product lines rose from 84.2% in 1992 to 98% in 1995. This was accomplished while experiencing an increase in business from $17M in 1992 to $27M in 1994. During this same period, WIP was reduced through the continuous improvement program by almost 50%, and throughput measurements showed average days in the shop decreasing from 42 in 1992 to a low of 14 in 1995. The productivity indicator that plots sales value per labor hour also indicated a rise from $77 in January of 1994 to $98 in May of 1995.
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