Golden nugget 11: Light blue 1, or: A way to exploit the protective capacity – Have your cake and eat it too.

Dr. Eliyahu M. Goldratt


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Level of TOC knowledge acquired:

Advanced

Designed for:

Business owners, Consultants, Executives, Implementers and Managers

Topics:

Decisive Competitive Edge (DCE) and Operations/Production

Application:

Buffer Management and Make to availability

Language:

English

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One of the crucial elements required in any MTA environment is maintaining high enough a level of protective capacity, 1. Practically, it means that the work centers are not allowed to operate 100% of the time. In fact, the most loaded resource will be, on average, about 20% idle 2. However, as we all know, people feel very uncomfortable with the idea of idle capacity. This is especially true in environments that utilize highly expensive equipment, and even more prominent in environments where full activation of resources is theoretically possible, since they have saleable products at many different intermediate stages of the production process. Such environments do exist, and are evident in many V environments. The reluctance to hold capacity idle may cause companies to dip into the protective capacity, especially when we bear in mind that most companies are not used to operating with a decisive competitive edge and therefore, at least in the early stages of implementation, are not fully aware that having a decisive competitive edge does not only help in getting more sales, but is the foundation for stable growth. How can we make sure that the proper amount of protective capacity will be maintained?