Theory of Constraints is a powerful philosophy and could improve productivity as well as inventory control if implemented successfully. However, to date the implementation of Theory of Constraints principles as embedded in resource planning systems has been less successful. One possible reason for this lack of success is the challenge to match TOC with MRP-based Enterprise Resource Planning (ERP) system.
Since most industries are converging to ERP for improvement of management, competiveness, communication and productivity, it would be of great value to be able to embed resource planning principles of TOC into an existing Enterprise Resource Planning system.
The purpose of this project is to define and develop a functional model in an Excel spread sheet using data from a MRP based ERP system that will monitor buffers for effective management. Data from Syspro will be exported into an Excel spreadsheet. Two buffer monitoring models were developed using Excel and pivot charts. One model was developed where the buffer penetration was calculated for a current buffer monitoring dashboard and summarised in a graphical dashboard with colour zones. The other was developed incorporating Time Phase Planning which is an MRP principle as well as using the concept of Dynamic Buffer Management which is in essence a TOC principle, also with colour zones.
Analysing the buffer monitoring dashboards can be used to assistance in establishing whether the current buffer level is sufficient or not. If a product’s buffer penetration has four consecutive Green Zone Periods, the buffer level is too high. Three consecutive Red Zone Periods means the buffer level is too low. In either scenarios the buffer would be increased or decreased by 20%.
Factors that contribute to choosing a specific buffer monitoring system were discussed and the conclusion was made that buffer management can be achieved by evaluating past buffer penetrations as well aswith projected buffer penetrations which will assist in allocating the correct buffer level for the planned future demand and supply.
Thesis (B Eng. (Industrial and Systems Engineering))--University of Pretoria, 2012.