Manufacturing Breakthrough Blog

Everyone agrees that when it comes to significant, ongoing and positive operational change in an organization, there is no magic bullet. But what if we told you that there is a faster, easier, less resource-intensive, and more effective approach that breaks through the commonly accepted conventions around building a better manufacturing business? In this blog we’ll teach you about this evolved approach to less waste, greater productivity, better decision-making, and ultimately more profitability in your manufacturing business.

Dependencies and Variability

Wednesday January 11, 2017

We completed our series on local and global optimums by laying out the impact of changes to Throughput (T), Inventory ( I ), and Operating Expense (OE) on an organization’s performance. In today’s post we will explore a new series on the “Twin Killers in Manufacturing Operations”, dependency and variability. This series of posts will reference the book, Synchronous Management – Profit-Based Manufacturing for the 21st Century, written by L. Srikanth and Michael Umble which I highly recommend!

Local Optimum Versus Global Optimum Part 5

Tuesday January 3, 2017

In Part 4, we completed our simple desk manufacturing example by calculating all three performance metrics, Throughput (T), Inventory ( I ), and Operating Expense (OE) and finished the post with L. Srikanth and Michael Umble’s Operational Measures Principle. Their principle states that Throughput should be going up, Inventory should be going down, and Operating Expense should be going down, ideally, all at the same time. However, it is possible and maybe even desirable to have one of the measures go in the wrong direction (or remain the same) in order to improve another one. In the final post of this series, we will use an example to see the relationship between changes in T, I, and OE and the financial performance of the wood shop company. to demonstrate how net profit changes as T, I and OE change.

Local Optimum Versus Global Optimum Part 4

Tuesday December 27, 2016

In part 3 of this blog post series, we completed our in-depth discussion on the three performance metrics, Throughput (T), Inventory ( I ), and Operating Expense (OE) as well as why these three metrics are superior to those promoted in the standard cost system. In today’s post we will present a simple example using T, I, and OE to illustrate the two author’s methodology. As with the other posts in this series, much of what we will discuss references the book, Synchronous Management – Profit-Based Manufacturing for the 21st Century, written by L. Srikanth and Michael Umble which I highly recommend!

Local Optimum Versus Global Optimum Part 3

Monday December 19, 2016

In Part 2 of this blog post series, we continued our discussion on local versus global optimum with a focus on the performance measures efficiency and utilization and how both can negatively impact operational decisions. We also looked at a new decision-making perspective using TOC’s three primary metrics of Throughput (T), Inventory ( I ), and Operating Expense (OE) and how they can be used to make better, real-time financial decisions. In today’s post, we will continue looking at these three metrics and how the decisions made with them can result in better decisions. As with the last several posts, much of what we will discuss in the next several posts references the book, Synchronous Management – Profit-Based Manufacturing for the 21st Century, written by L. Srikanth and Michael Umble which I highly recommend!

Local Optimum Versus Global Optimum Part 2

Tuesday December 13, 2016

In my last post we began a discussion on the difference between local and global optimums and how local performance measures can negatively impact operational decisions. We also discussed a very common behavior in many manufacturing firms referred to as the end-of-the-month syndrome whereby as the end of the reporting period approaches, behaviors change from local focus to global focus. In today’s post we will continue looking at the difference between local optimum and global optimum when attempting to make the right operational decisions. As with the last post, much of what we will discuss in the next several posts references the book, Synchronous Management – Profit-Based Manufacturing for the 21st Century, written by L. Srikanth and Michael Umble which I highly recommend!