Throughput Accounting: Controls (#47)

In this podcast episode, we cover the reasons for controls associated with a bottleneck operation, and where they should be placed. Key points made are:

  • Traditional controls are targeted at avoiding losses, while throughput controls are targeted at increasing revenue.

  • Control the bottleneck by focusing on enhancing utilization.

  • Track the proportion of downtime caused by maintenance (acceptable) and everything else (unacceptable).

  • Should only produce what is planned; no overages allowed.

  • Track scrap occurring downstream from the bottleneck, since this represents wasted bottleneck production time.

  • Track all instances of buffer decline, and what caused each one.

  • Monitor sprint capacity levels upstream from the bottleneck.

  • Track the number of production jobs released into the system.

  • Track the number of days supply on hand of essential raw materials.

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Constraint Management
Inventory Management