Boaz Ronen

Spreadsheet analysis and design

Although spreadsheet programs and microcomputers have revolutionized information processing in organizations, a significant number of serious errors have been reported through the misuse of this technology. This article discusses several different contexts for the development of spreadsheet models and presents structured design techniques for these models.

Synchronized manufacturing as in OPT: from practice to theory

Abstract Synchronized manufacturing as in the OPT system (Optimized Production Technology, by Creative Output Inc.) is a relatively new concept for production management. This paper analyses the nine OPT rules, the OPT concepts and OPT philosophy in order to establish an analytical, theoretical basis for the OPT system. The analysis is based on systems theory concepts, mathematical programming theory and techniques, as well as queuing theory, the Pareto rule, and the Japanese production experience. It is shown that the OPT rules reflect substantial integration of well established MS/OR techniques with the whole OPT philosophy. The paper analyzes the OPT classification of VAT plants and the Drum-Buffer-Rope concept used in OPT. Our analysis makes a clear distinction between BIG OPT (the management system) and its subsystem SMALL OPT (the scheduler). The paper suggests that while the BIG OPT concepts may be applied in all types of processes, job shop processes and very complex assembly lines are the most suitable ones for the SMALL OPT scheduling system. The paper then shows the management by constraints methodology as a natural enhancement of the OPT concepts.

A decision support system for purchasing management of large projects

This paper describes a model based Decision Support System (DSS) for purchasing materials and components for large projects. The DSS may be used under two scenarios. Under the first scenario, we have a project to execute, and we are looking for a good way to manage the purchasing to minimize the expected costs. The decisions under our control are when and from whom to order each item. Under the other scenario, we are bidding for the project, and wish to assess the costs associated with the purchasing decisions which we should consider before making our bid. In both cases, we take into account expected out of pocket costs as well as lateness and/or expediting penalties. The DSS is designed to help choose the best supplier for each item and schedule the placement of the orders—decisions which are very difficult to make well without such a model based DSS.

PRODUCTION OUTSOURCING: A LINEAR PROGRAMMING MODEL FOR THE THEORY-OF-CONSTRAINTS

This paper presents an analysis of the outsourcing problem. Pertinent variables are identified and the relationships between them are defined. We formulate the outsourcing problem as a Linear-Programming (LP) problem and identify an analytical solution. We proceed with an example examining three decision models: standard cost accounting, standard Theory-Of-Constraints (TOC) and our own solution. The model enables managers to determine which products to manufacture and which to outsource. The solution of the LP formulation enables managers to apply the model by computing an operational ratio, without having to solve a linear programming problem. The final model is simpler to apply and requires the computation of fewer variables than other prevalent models.

Critical Chain: A New Project Management Paradigm or Old Wine in New Bottles?

Abstract: In this paper we analyze the Critical Chain (CC) approach to managing projects. Is CC as some authors assert, one of the most important breakthrough for project management since the introduction of the Critical Path concept (CP) or does CC merely consist of known concepts presented in a different way? Our discourse compares systematically CC and CPM on three conceptual levels to reveal the differences between the two approaches. We conclude that the philosophy behind the CP and CC approaches is remarkably different resulting in a different mindset for managers and a different set of management practices. The main difference is the application of the Theory of Constraints (TOC) in the CC case. As a result, CC focuses at improving the systems performance by laying out specific policies many of which are focused on resource management especially in multiproject environments that are not explicitly addressed by CP. We conclude that while the application of CC is complex, many of its ideas can be easily adapted by practicing managers.

Focused SWOT: diagnosing critical strengths and weaknesses

Despite the problems involved in its use, SWOT (strengths-weaknesses-opportunities-threats) analysis remains a major strategic tool for listing the strengths and weaknesses of an organisation, for recording the major strengths and translating them into value. This paper presents a straightforward methodology for making a structured analysis of strengths and weaknesses, based on an analysis of important value-creating events and the strengths and weaknesses that caused these events. The focused SWOT methodology distils the strengths and weaknesses into core competences and core problems, by using the core-competence tree and the current-reality tree. The core competences and core problems are then linked into a plan of action aimed at preserving and leveraging the organisations core competences, while defending against exposure to core problems. Applications of the methodology are presented and it is demonstrated in a detailed case study.

The complete kit concept

One of the fundamentals of good operations management practices that is rarely discussed in the literature is the ‘complete kit’ concept, which suggests that work should not start until all the items required for completion of the job are available. These items (the kit) include components, tools, drawings and information. Starting a job with an incomplete kit means more labour time to finish the job, longer lead time, more work in process, reduction of throughput, poor quality and impairment of due date performance. The paper analyses the various facets of the complete kit concept in manufacturing, research and development, engineering and service organizations

Improving shop floor control: an entropy model approach

New manufacturing theories and techniques such as just-in-time and total quality management advocate the use of small lots in production and subsequently reduction of setup times. This yields better quality, lower response time, less operating expenses and less work-in-process. The implementation of the small-lot concept often encounters opposition from production people who feel that increasing the number of lots (an apparently inevitable result of reducing their size) implies a need for more information and more information technology. By means of a normative model, based on information theory and the entropy measurement, this paper proves that the move toward smaller lots implies less information needs. The model also shows the relationship between improvement activities, such as setup and time per part reduction, and the information needs.

The Pareto managerial principle: when does it apply?

The well-known 80/20 Pareto principle and its refinement into “A”, “B”, and “C” categories give rise to a managerial methodology consisting of three steps: classification; differentiation; and resource allocation. This is an easy-to-implement and extremely effective methodology. It starts with the creation of “Pareto diagrams”, i.e. bar charts of attributes and their relative frequency, presented in descending order. Typically, Pareto diagrams are useful in that they provide managers with a summary of practical information, revealing critical attributes. However, sometimes a Pareto diagram is less informative than it might be, because the relative frequency is almost uniform. The objective of this article is to provide an analytical tool (an index) that employs the above-mentioned methodology to measure the closeness of empirical Pareto diagrams to an “ideal” Pareto diagram. The index developed is based upon entropy.

Managing system constraints: a cost/utilization approach

Abstract Modern management philosophies, such as just in time (JIT), the theory of constraints (TOC) and total quality management (TQM), place a strong emphasis on operations management. These approaches create techniques and procedures for effective flow of materials, but do not provide sufficient tools to consider the economic outcomes of the various alternatives. This paper applies the cost/utilization model to the analysis of production lines and materials flow. The model combines the Pareto approach with the TOC approach. The Pareto approach concentrates on the important and costly elements of the organization. TOC focuses on the organizations constraints. It is presented in a simple graphic display aimed to allow managers to locate better constraint resources, detect faults in the planning of the production line, examine improper fluctuations in the process and pinpoint their sources. The model is a top-management decision-support tool that may be applied in areas such as buffer policy, assessment ...