Getting The Big Picture of your Value Chain

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Drum Buffer Rope (DBR) is the slang name for an extremely important value chain concept which was developed by Eliyahu M. Goldratt ( Eli Goldratt ). 

The "Theory of Constraints" (TOC) helps C+H firms understand how best to optimize their value chain activities in order to optimize shareholder value and generate optimal revenue based on the everyday issues associated with things like job scheduling. Eli's original book, The Goal, uses the Drum Buffer Rope analogy to help us understand the problems of value chain optimization in a way that is quite astounding, 

TOC helps us to view our entire Value Chain from the perspective of an overall, big picture, system. The book The Goal gets you started, but it starts us off in a manufacturing setting and dealing with job scheduling issues. It's a quick and easy read, for sure.

We like to get managers up-to-speed and conversant on the Theory of Constraints because it helps everyone to focus on mission-critical manufacturing and distribution work flow issues in a way that they never thought possible. TOC leverages systems theory to point out that common manufacturing bottlenecks such as high value pieces of equipment such as a CO2 extractor or a Cannabis Winterization (freezer and process combination) create process bottlenecks and scheduling issues which need to be seen from a big picture perspective rather than from a work step or work cell perspective.

In essence, TOC will "rock" your job scheduling world in the same way that Agile Kanban systems do. But TOC does not stop there. It helps your manufacturing or processing team to attack scheduling issues with a new understanding.

We advise that you pick up "The Goal" and get started on understanding the basics of TOC! It's perfect for executive management, too, as it's not techie.

Here's a further, more detailed, explanation of Drum Buffer Rope...

Like members of a mountaineering team who climb a mountain on the rope, a drum and rope are used for an analogy of management tools when soldiers march or boy scouts hike.

This troop analogy was first applied to a production line by Ford Motor Co., Ltd. who connected production processes of an automobile assembly line by conveyer belts. Then, Mr. Taiichi Ohno of Toyota Motor Corporation introduced a rope called "KANBAN". Both of the concepts brought an innovation in company management and had a great impact on economic growth.

As in an example of boy scouts hiking, those who are bottlenecks are positioned at the beginning and a rope is used for subordinating (synchronizing) the speed of followers with that of the bottleneck persons. This enables preventing the march (work-in-process inventory) from expanding. In other words, to eliminate work-in-process inventory is to reduce costs. Also, in preventing the front ones of the bottleneck group who determine the marching speed of the entire team from slowing down, a rope plays an important role as a buffer to absorb the changes in the marching speed of the front ones of the bottleneck group. A drum plays a role of conveying the information about the speed of the slowest bottleneck persons to everyone in the group and cheering up the bottleneck persons to raise their speed up.

When the rope is stretched out to the limit, it is necessary to impose a constraint on those who tied to the rope so that they will not be able to raise the speed any further. In some cases, work needs to suspend when the buffer reaches the limit. Similarly, the team may sometimes need to stop. If the drum is beaten at the speed of the first person of the team, an interval with the following persons will get wider and wider. In that case, the inventory level will increase and throughput will decrease. If the drum is beaten at the speed of the last person of the team, i.e. the team marches at the speed of the inventory, the inventory level will decrease and throughput will increase as the speed of demand increases. The pull-type system means to beat a drum at the speed of the last person, which corresponds to as demand-driven pull type supply chain management.

Taken with kind permission from the book:
"Understand Supply Chain Management through 100 words" by Zenjiro Imaoka.
Published by KOUGYOUCHOUSAKAI