APO : Theory of Constraints - Goldratt

[Former Member]

Dear All,

Our company has selected to revamp the supply chain and implement the theory of constraints the concept introduced by Edi goldratt. As you all might be aware , TOC for operations include drum buffer rope method, and identifying the constraints on the process.

We do have APO in our landscape and this has been used in a traditional forecast model and scheduling for the operations. In this connection, I would like to know did any one use SAP APO to achive the TOC.

Regards,

Krishna

[pino_villa]

I have implemented DBR in SAP PPDS and PP space. I think confusion lies with terminlogy. I have published a paper on this subject at the SAP Insider. This paper covered a TOC case study in SAP. TOC is a methodology to achieve throughput objective, within this methodology we use DBR as a planning technique. SAP PPDS or PP does not have DBR but available planning tools both in PP and PPDS allows you to achieve DBR objective. The only area I had to build custom was around buffer management, therefore buffer zones and buffer zone monitoring. Futhermore one need to build TOC KPI, SAP KPI are quite simplistic.

[Former Member]

Pino,

Although this is not my thread, I want to thank you for your contribution.

I am a subscriber to Insider, but I was unable to find your white paper using 'search'. Can you please tell me the name of the paper? I would like to download the article.

Thanks & Best Regards,

DB49.

[Former Member]

Hi Dogboy,

Try the following link from Slideshare:

Scmeu2012 villa productionoptimization

BR,

Jeff

[Former Member]

Dear All,

Further to provide more details can an APO system used to managed DBR(Drum-buffer-rope) scheduling? If any one has done this can you please share your experiences.

regards,

krishna

[Former Member]

Krishna,

Let me first say that, no, I have no experience implementing DBR under APO. To me, TOC and DBR is not really scheduling in the sense that SAP defines scheduling, it is an iterative method to identify and improve the factors that are used in shop floor execution.

SAP's suite of planning tools can be used after all the major TOC business decisions have been made. There are multiple lot size strategies available in SAP ERP and APO, as well as the ability to create custom lot sizing methods. There is a wide range of standard scheduling heuristics in APO PP/DS, as well as the ability to create custom scheduling heuristics. The output of these functionalities would then be the 'optimum' plan (best feasible plan considering all planned constraints).

In the end, though, the DBR method must focus on execution, and not on planning. Once the optimum plan has been created, 'when' and 'under what circumstances' will the 'next' order be worked upon (released). SAP's ERP and APO offerings in this area are thin, although SAP supports customer enhancement of virtually all processes, including order release.

In my opinion, DBR is a valid business goal. For a company whose manufacturing is totally out of control, there are substantial benefits to be had. However, for a company that is already somewhat disciplined, implementing DBR solution in software offers diminishing returns. Rigorously specifying ever greater levels of detail in execution will result in more effort required in booking the required day-to-day data into the computer in order to support the process. Again, in my opinion, it is often much cheaper and more effective to use non-software solutions, such as KanBan cards.

I don't believe SAP APO has any explicitly named 'TOC' module or 'TOC' addin or 'TOC support package' or 'DBR scheduling'. It will be up to the implementation team to identify exactly what functionalities from these theoretical models should be implemented, and then find which, if any, SAP tools are suitable to use in order to support the selected DBR functionality.

There also may be third party software that directly supports DBR. SAP also supports interfacing and integrating with a wide range of 3P products. Try the standard online search engines.

Best Regards,

DB49