1. Synchronous Manufacturing Defined
   
   
1. Goal of the Firm
   
   
2. Performance Measurements
   1. Financial Measurements
   2. Operational Measurements
      1. Throughput Defined
      2. Inventory Defined
      3. Operating Expenses Defined
   3. Productivity
      1. Productivity Defined
         
         
3. Unbalanced Capacity
   1. Dependent Events and Statistical Fluctuations
      
      
4. Bottlenecks and Capacity-Constrained Resources
   1. Bottleneck Defined
   2. Nonbottleneck Defined
   3. Capacity-constrained Resource (CCR) Defined
      
      
5. Basic Manufacturing Building Blocks
   
   
6. Methods for Control
   1. Time Components
   2. Finding the Bottleneck
   3. Saving Time
   4. Avoid Changing a Nonbottleneck into a Bottleneck
   5. Drum, Buffer Rope
   6. Importance of Quality
   7. Batch Sizes
   8. How to Treat Inventory
      
      
7. Comparing Synchronous Manufacturing to MRP and JIT
   
   
8. Relationship with Other Functional Areas
   1. Accounting's Influence
   2. Marketing and Production

Case: Solve the OPT Quiz—A Challenge in Scheduling

According to Dr. Goldratt, synchronous manufacturing refers to the entire production process working together in harmony to achieve the goals of the firm. Synchronous manufacturing logic attempts to coordinate all resources so that they work together and are in harmony or are "synchronized." The goal is on total system performance, not on localized measures such as labor or machine utilization.

The primary goal of the firm is to make money. Firms have three measures of the firm's ability to make money: net profit, return on investment, and cash flow. Financial measurements work well at the higher level but need to be used with other measures of throughput, inventory and operating expenses. The goal of the firm from an operations standpoint is to increase throughput while simultaneously reducing inventory and reducing operating expenses. Productivity is all the actions that bring a company closer to its goals.

Unbalanced capacity is preferable to an attempt to match capacity with market demand. Capacity constrained resources can become bottlenecks if their utilization is not scheduled carefully. Because each step in a process sequence is a dependent event, the ability to do the next process is dependent on the preceding one. Statistical fluctuations are the normal variations about a mean or average. Rather than balancing capacities, the flow of product through the system should be balanced.

A bottleneck is any resource whose capacity is less than the demand placed upon it. It limits the throughput. Nonbottleneck resources have capacity greater than demand. A capacity-constrained resource (CCR) is one whose utilization must be scheduled carefully so it does not become a bottleneck operation.

Production cycle time is made up of setup time, process time, queue time, wait time, and idle time. Queue time is the greatest for parts waiting to go through a bottleneck. An hour saved at the bottleneck adds an extra hour to the entire production system but an hour saved at a nonbottleneck is a mirage and only adds an hour to its idle time.

Batch size determination is important in synchronous manufacturing. For bottleneck resources, larger batch sizes are desirable. For nonbottleneck resources, smaller process batch sizes are desirable and reduce work-in-process inventory.

MRP and JIT are often compared to synchronous manufacturing. MRP uses backward scheduling after being given a master production schedule while synchronous manufacturing uses forward scheduling because it focuses on the critical resources. JIT like synchronous manufacturing does an excellent job in reducing lead times and work in process but is limited to repetitive manufacturing and requires a stable production level.

The production system must work closely with the other functional areas to achieve the best operating system. Cost accounting, for example, is changing to support production performance measures. Marketing communicates and conducts activities in close harmony with production for better operations too. The firm should operate as a synchronized system with all parts in harmony and supporting each other. The key to competitive advantage through operations is for the firm to operate as a synchronized system, with all parts working in concert. Companies that do this well are well on their way to achieving the fundamental goal of the firm -- profitability.