February 2021 Volume 3

OPERATIONS & MANAGEMENT

Got Constraints? Theory of Constraints Applied to Scot Forge Supply Chain By John Coward

In many cases, the ability of a supply chain to perform reliably over time is a key contributor to the success of a business. Very few supply chains are identical with different variables that seldom remain constant over a long period of time. Occasionally it can seem like an impossible task to maintain synchronization of all those variables in the supply chain, particularly when things typically go wrong at the worst possible time (Murphy’s Law). Inevitably, the worst time typically occurs when something changes in the customer’s environment, and the need for a supply chain to react to the environmental change is significant. Fortunately, there are many high-quality established methodologies, including variations of implemented processes available to help a business minimize these types of situations. With many valid solutions available, the challenge can become how to select the suitable approach(s) for your business and its unique supply chain. Learning the Supply Chain Environment There are certainly risks for a company in selecting the methodology or implementing the processes in a manner that is not aligned with the environment. Some common performance gap symptoms can be over/under investment of capital equipment, resources and inventories; deficiencies in the supply chain’s ability to be agile; and situations where the supply chain does not reach an applicable state of reliability. To help minimize the risk at Scot Forge we continually invest in the journey of discovery within our supply chain, the learning helps us select the methodology and provides feedback when supporting processes start to reduce effectiveness and need to change. Discovery is focused around learning within the supply chain links: cultures, people, process/systems, how they collaborate and hopefully some level of understanding of variation within the link. Yes, there is no finish line for this goal, but it is one approach to implementing continuous improvement into a supply chain. Metrics can be a useful tool in identifying the need to change they are seldom adequate to identify what needs to change. An early experience from a supply chain implementation that did go well inmy own journey is the knowledge that not sufficiently understanding the environment can lead tomanaging a supply chain at the wrong level. Applying the knowledge gained from learning the environment into a variation perspective of standard deviations and bell curves can help guide implementing methodologies, processes and management at an applicable level supporting an optimizing supply chain that can perform reliably over time.

Basic Concept ofTheory of Constraints (TOC) Theory of Constraints is a methodology to establish and continually improve on a process of ongoing improvement. It is brokendown into five steps: identify the constraint; exploit the constraint; subordinate and synchronize to the constraint; elevate the performance of the constraint, and then go back to the first step and repeat the process. In my experience, to subordinate and synchronize to the constraint can be one of the most challenging behavior change steps in the process. Taking this approach and transferring it into a solution that can be implemented is known as Drum-Buffer-Rope (DBR). Basically, DBR is a method to synchronize the system to the beat of the drum (constraint) by limiting the pace of the non-bottlenecks to match the pace of the drum. A buffer in front of both the drum (constraint) and at end of the system help protect the overall pace and reliability of the system by providing a little slack in the rope. A common example of DBR is a troop marching in a line analogy. If you tie a rope to each member of a troop, the slowest troop member will dictate the pace (Drum). The rope will synchronize the other troop members to the pace of the slowest member (Rope), and by putting a little slack in the rope (Buffer) you will enable the non drum members to catch up when Murphy (variation) occurs to them, therefore not slowing the progress of the entire troop. Although this can seem like a simple solution, understanding the enterprise environment is a critical component. There can be many scenarios in the supply chain links that are influenced by cultures, people, process/systems, collaborations, variation levels and other contributing factors that might not enable execution. Scot Forge Supply Environment Let’s get started by providing a high-level background on the supply chain environment. From a markets perspective, the supply chain provides services and products in several industries like Aerospace, Defense, Mining, Education & Research, Gearing, Heavy Industrial Equipment, Bar Service Centers and Power Generation. Our entire supply chain’s knowledge and experience are applied to help our customers in these industries by providing services and products in multiple raw material grade classifications, product shapes and manufacturing processes ranging from a few pounds to 300,000 pounds. Our product mix can range from providing a product or service to a single event to making several parts each day across five different Scot Forge locations and several partners’ locations within the supply chain.This type of environment provides a robust opportunity for learning and gaining both knowledge and experience that can be applied to helping our customers solve their challenges.

FIA MAGAZINE | FEBRUARY 2021 64