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Factory Physics for Managers: How Leaders Improve Performance in a Post-Lean Six Sigma World

by Edward S. Pound, Jeffrey H. Bell, Mark L. Spearman

April 2014

Intermediate to advanced

304 pages

10h 1m

English

McGraw-Hill

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The Book in BriefWhy Is This Book Needed?
Of Theories and BuzzwordsToyota and ScienceHow Toyota Did ItBatch and Queue ProductionA Balanced ApproachThe Track Record: Lean and Six SigmaA Confused LandscapeBoeing’s Moving Assembly LineLooking Ahead
Leading Performance Improvement More ProductivelyTradeoff IllustrationsLeadership and TradeoffsThe Factory Physics Approach
Knowledge and ScienceScience, Math, Software, and IntuitionPractical TheoryThe Value Stream: Demand, Stocks, and ProductionBuffersTypes of BuffersConceptual Illustrations: Something or Someone Is Always WaitingA Manager’s World: Environment, Tactics, Controls, and MeasuresPutting Practical Science to PracticeDefinitionsFactory Physics Science: As Simple as Possible but No SimplerAdvancing the Practical Science of ManagementThe VUT EquationCycle Time versus Utilization GraphProduction and StocksLittle’s LawProduction-Flow GraphVariance of Replenishment-Time Demand EquationTradeoff Plot: Inventory versus Fill Rate GraphEfficient FrontiersInsights from the Tradeoff PlotVisual Management of Stock-Point PerformanceStocks and Flows, the Lot-Size Graph
Defining TermsModeling StocksA Perfect WorldReplenishment TimesDemandForecast Error and Lead TimeInventory Performance MeasuresComputing Inventory PoliciesInventory in an Assembly SystemModeling FlowsLittle’s LawCapacity AnalysisOverall Equipment EffectivenessBest-Case PerformanceEffect of VariabilityMeasures of VariabilityQueuing EffectsTotal Cycle TimeRaw Process TimeMove TimeShift-Differential TimeBatch TimePull SystemsCombining Stocks and FlowsCash-Flow OptimizationExamples of Cash-Flow OptimizationConclusions

The Value-Added FantasyFinancial Statements and the Science of OperationsFinancial Performance Driven by the Science of OperationsContribution Margin at the BottleneckWhen Lean Manufacturing Adds CostInventory OptimizationManaging the Portfolio of BuffersMarketing and Operations Strategies Drive Financial Results
Operations StrategyStrategyTacticsControlsMeasuresExecutionInformation Technology Control and Control LimitsFactory Physics Sales and Operations PlanningS&OP Event Sequence and ParticipantsS&OP Meeting PracticesS&OP+S&OP+ Process
Demand Tactics and ControlsDescribing and Forecasting DemandLumpy DemandInventory TacticsInventory Strategy ConsiderationsCapacity ConsiderationsCurrent Performance versus Predicted PerformanceStrategic OptionsTactics for Inventory ManagementInventory ControlCapacity TacticsUtilizationWIP Control and CONWIPVirtual Queues and Due-Date QuotingRework and ScrapResponse-Time StratagemsPredictive Control Using MRP/ERP SystemsCommon PracticesMRP for Inventory ControlMRP for Production ControlDynamic Risk-Based SchedulingDynamic Risk-Based Scheduling in Assemble-to-Order EnvironmentsMeasures Alignment and Insight
An Approach to Sustainable LeadershipA High-Level Plan So That Strategies Can Be Shared and UnderstoodVision and MissionCritical StrategiesMonthly or Quarterly Plans to Establish Prioritized InitiativesInventory OptimizationUtilization TargetsWeekly Scheduling Meetings to Plan the WorkWIP CapsDue-Date QuotingWeekly Operations Meetings to Check ProgressDaily Mechanisms for FeedbackPersonal Plans So That Individuals Understand Their Roles
Learning to See—FartherBeyond ABC—Optimal Inventory PoliciesReducing Cycle Times in a Traditional Pharmaceutical PlantRestoring Customer Service in a Fabrication and Assembly PlantIncreasing Throughput in a Biopharmaceutical FacilityDynamic Risk-Based Scheduling in the Textile Industry
Quick WinsOperations Strategy Alignment with Business StrategyAbsolute BenchmarkingHigh-Level Assessment of UtilizationBottleneck AnalysisPotential for WIP Cap DeploymentHigh-Level Analysis of Lead TimesERP/MRP MechanicsMore Complex ImplementationsA Large Company ImplementationAlternative HistoriesThe Future

Content preview from Factory Physics for Managers: How Leaders Improve Performance in a Post-Lean Six Sigma World

CHAPTER 9 Examples from Industry

Avoid the precepts of those thinkers whose reasoning is not confirmed by experience.

—Leonardo da Vinci, Thoughts on Art and Life

We will now demonstrate use of the Factory Physics methodology in practice. This chapter contains five different examples of its use in the real world. We also include an example that takes a classic treatment from a famous book on Lean manufacturing and extends the results using Factory Physics science.

LEARNING TO SEE—FARTHER

This chapter begins with an example that is not from the real world but from an influential book, Learning to See.¹ In this book, Rother and Shook present ...