Synchronous Management Principle 1: Synchronizing the Flow | Operational Excellence Quick Hits

Speaker 1: (00:06)
Welcome to our new series. Our new series is going to be on synchronous management. It’s based on the book, Synchronous Management: Profit Based Manufacturing for the 21st Century. What we’re going to do is we’re going to start looking at the principles that support the concept of synchronous management. So there’s several principles that are touched on in the book. I’m going to take each one of them and discuss in a little bit more detail.

Speaker 1: (00:32)
The synchronous flow management that we’re going to focus on today is don’t focus on balancing capacities, focusing on synchronizing the flow. This is the first principle that’s discussed in the book. So let’s get into what the details of what balancing capacities means and what does focusing on synchronous flow mean? If we look at a system, a system is made up of different processes. Those processes do different elements of work as work flows through the system. So if we look at this, the flow of work in this case flows from left to right, and it goes through different operations to complete the tasks. Then at the end of the completion of the task, the product or service is completed to ship to the customer and we have a direction of flow.

Speaker 1: (01:24)
If we look at this balance system, what does that mean? So it means that each of the resources have the same capacity. If I look at each resource, each resource has a capacity to do 100 units per day. If each resource has a capacity to do 100 units per day, what’s the output of the system? So a lot of people would say, oh, it’s 100 units per day. Well, it’s not. Why isn’t it 100 units per day? Because we have variation in the process also. So in any system we have dependencies, which is resource two is dependent on resource one, and each resource has a dependency in the system, but we also have variability and every process has variability.

Speaker 1: (02:08)
So in this case, if we look at the efficiencies of each process, process one is 98% efficient. Process two is 96, 3 is 94, 4 is 92. So what becomes the efficiency of this system? It’s 98 times 96 times 94 times 92. So the system is only 81% efficient. So what’s the output of this system? It’s going to be 81 units or less.

Speaker 1: (02:37)
So that’s what happens when we have a balanced system. If we have a balanced system, then we have variation. Then the output’s never going to be what each person’s capable of producing because in a system like this one phenomenon that happens is delays transfer downstream. So if Mona’s going to have a delay, what’s that going to happen is it’s going to cause Omar here to not produce because she couldn’t pass on what she needed to to Omar. Those delays transfer downstream. Another phenomenon that happens is gains never transfer. If someone has a good performance, the probability of that transferring to shipments is very small.

Speaker 1: (03:20)
So let’s talk about synchronization. Synchronization is defined as a holistic business methodology that brings control and stability to a otherwise chaotic system. When we look at it, it’s created by synchronizing the system capacity to customer demand. What does that mean? We only want to release work into the system to meet the demand within the replenishment cycle. So if you don’t know what the replenishment cycle is, you can go back to my videos from previous sessions and understand what replenishment cycle is. But we only want to release work into the system within that replenishment cycle.

Speaker 1: (04:00)
Then to create the synchronization, we want to have unbalanced capacity. So unbalanced capacity means that each resource has different capacity. So if I look at the capacity of each person in this unbalanced system, you see they all have different capacities. Given the same flow direction and the same efficiencies, what’s the output of this system? So again, we have the same efficiencies as the previous round. What’s this system capable of producing? Well, by having the unbalanced capacity, what happens is delays don’t transfer because I have sprint capacity or protective capacity if I utilize my resources correctly in the system.

Speaker 1: (04:47)
So by having more capacity in the upfront operations that I do here at Omar, the chance of them causing delays for him goes down. So now I can take Omar’s efficiency times Steve’s efficiency, 94 times 92 by decoupling the upstream operations, and now the system can become more effective. So when I take those two efficiencies times the bottleneck resource of Omar, 116, I actually get 100 units per day. So my demand rate is 100 units and now I have the capability to produce those 100 units.

Speaker 1: (05:25)
So our lesson here is don’t balance the system. We want the system unbalanced and synchronize the flow. So we want the pace setter, or the bottleneck or the tax setter, whatever you call the resource with the least amount of capacity to match our customer demand given the variability in the system. That’s our session for today. Next week’s session we’re going to talk about the second principle of synchronous management focus on flow of the work and not the efficiency of the individual task, which will be a little bit more detailed of what we discussed today.