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Stealing in a T Plant: T type plant is relatively a complex manufacturing environment.

The critical feature of T type plant is that the final part is assembled using different component parts, and these component parts are common to many different end items. Because of this sharing of different components the plant assumes a logical T structure. T-plants constantly suffer from both synchronization problems (parts aren't all available for an assembly) and the stealing problems (one assembly steals parts that could have been used in another). TOC practitioners normally use various games or simulations (which takes a lot of time) to showcase the effects of stealing to their target audience. However the problems arising due to stealing can also be illustrated by using the simple case of a four product- four component plant, which is explained in the next section of the article. As shown in fig 1.1 the company ABC manufactures four assembled products E, F, G and J using component parts A, B, C and D. The arrow shows how the products are made and the figure below indicates the available inventory for each part. The other chart below indicates the product demand (day wise) for e.g. 100 units of product E are to be shipped to the customer on Day 2.

Daily Schedule Day Day- 1 Day- 2 Day- 3 Day- 4 Fig 1.1 Some of the key factors which determine the working of the plant are as follows: Raw material (component parts) comes in a minimum lot size of 100 Raw material ordered in morning normally comes by end of day or by next days morning The shipment to the customer shall be in full i.e. if the order is for 50 units, than all 50 units should be dispatched together Product cannot be dispatched before its due date Production (assembly) planner is expected to work according to the priorities assigned by Product demand (day wise) Production people believe that Capacity should not be wasted Maximum 100 units of products (in total) can be assembled using existing facility E H G 100 100 50 Product Order Qty

In this section, we will analyze the actions which take place on a day to day basis and what are their far reaching implications. Day-1: 100 units of E are to be assembled so that it can be dispatched on day 2. For manufacturing E , 100 units of raw material A and B are required As part A has 0 inventory, an expediter is dispatched to expedite 100 units of A (will come only by end of day) Meanwhile production supervisor is thinking whether to leave assembly operation idle or produce 100 units of product H which requires 100 units of B and C and also has a firm order, to be dispatched on Day 3. As capacity should not be wasted, 100 units of product H is produced resulting in consumption of available stock of raw material B and also resulting in finished goods inventory of product H Later in the day 100 units of raw material A arrives, but still Product E cannot be assembled

Figure 1.2 shows the status at the start of Day 2 (which as same as end of Day 1)

Fig 1.2 Day- 2 Customer is expecting that Product E will be dispatched on time Product E is behind schedule, and product H is ahead of schedule Product E is not assembled yet, because now raw material B is not there. Expediter is send to expedite 100 units of raw material B, which will come only by end of day 50 units of product G is made ahead of schedule as raw material A and C are available 40 units of product J is assembled without having a firm order, thinking that order will definitely come in near future and the capacity on assembly line should not be wasted Production of G ahead of schedule has resulted in depletion of stock of RM A

Figure 1.2 shows the status at the start of Day 3 (which as same as end of Day 2)

Fig 1.3

Day 3 Only 50 units of product E can be assembled Expeditor is sent to expedite 100 units of Raw material A and B Customer is very dissatisfied as product E is one day behind schedule and will not be shipped before Day 4 Product H is dispatched on time 40 units of product J are lying in warehouse w/o any firm order

The concerns or issues that are generally shared in T plants as a result of stealing are: Large finished goods and components inventory Poor due date performance resulting in client dissatisfaction Production supervisors/ Expeditors are always in fire fighting mode Constant changes in priorities to vendors

This scenario is common among many different organizations and despite of having enough plant capacity they are unable to manage market demand and meet their commitments on time. As a result the management gets a wrong impression that there are capacity issues at plant and also at vendors end. Now the question arises, is there any effective yet simple way to manage stealing in a T Type plant?? The answer is Yes. The issues arising due to stealing can be effectively managed by abolishing the wrong assumption that Resource standing idle is a waste. There shall be only one priority system for everyone and it should be strictly adhered. Next section of the article showcases what happens when production starts working strictly as per the given priorities (in this case it is the product dispatch date).

Day 1: Expeditor is dispatched to get 100 units of raw material A Meanwhile the assembly operation is kept idle and 100 units of raw material are kept reserved for product E 100 units of Raw material arrives by end of day No production takes place on Day 1, and customer is informed in advance that product E will be dispatched by end of Day 2

Figure 1.2 shows the status at the start of Day 2 (which as same as end of Day 1)

Day 2: Assembly planner has communicated to expediter to get 100 units of raw material B (it is going to be used for producing H) 100 units of product E are assembled and simultaneously an order of 100 units of raw material A is given to the vendor Later in the day, 100 units of E are dispatched 100 units of B arrives by the end of day (will be used on Day 3)

Figure 1.2 shows the status at the start of Day 3 (which as same as end of Day 2)

Day 3: 100 units of product H is assembled and dispatched by end of the day 100 units of A comes sometime during second half of day 3 G is planned to be assembled on day 4

A brief comparison is given below showcasing the difference b/n the old way (without TOC) and the new way (with TOC): Old way of managing Product E o Not dispatched on scheduled date o Will get dispatched probably on Day-5, if RM A is not stolen again Product H o Can be dispatched on day 3 as required Product G o Can be dispatched on day 4 as required Product J o 40 units of J are lying in warehouse w/o any firm order (resulting in higher inventory days) New way of managing Product E o Is dispatched by day 2 as scheduled Product H o Can be dispatched on day 3 as required Product G o Can be dispatched on day 4 as required Product J o 0 units of J in warehouse (will be produced only when a firm order is there)