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Synchronous Manufacturing

Synchronous Manufacturing Quick Reference Guide 1- Introduction 2- What is TOC? 3- Main Concepts of TOC 3-1 Decision Process 3-2 DBR technique 3-3 Buffer Management 3-4 VAT Analysis 3-5 Protective Capacity 4- Conclusion Glossary Abstract This short paper summarizes some of my personal readings as well as field experiences implementing the TOC/DBR concepts and techniques in a variety of industries. Mondher Ben-Hamida BearingPoint – Silicon Valley – Supply Chain Solutions 500 East Middlefield Road Mountain View, CA 94043 mbenhamida@bearingpoint.net TOC/DBR and Synchronous Manufacturing – Quick Reference Guide Page 2 1- Introduction The 70’s and 80’s have been particularly fertile in terms of advancement of the Industrial Management concepts and practice. In fact, the need for a more powerful management tool to enhance MRP principles and the growing and aggressive competition from the emerging super power Japan have led the western world to an extensive effort of thinking and research to come up with new ideas and concepts. JIT/Kanban had great success dealing with the new problems and in solving many issues related to MRP management tools, such as substantially reducing WIP levels and hence lead times and providing a much better overall framework to manage the shop floor. An Israeli physicist, Eliyahu Goldratt was one of those preaching the need for a smarter tool to manage production while being less complex than MRP. His message was ideologically oriented in the sense that it was a matter of West vs. East supremacy. Being a physicist and an outsider, he had a sound systemic logic. He looked at the production scheduling and management issues from a global perspective, put together some of the widely known best practices to establish the Theory of Constraints as a new body of knowledge in the Industrial Management field. The early excitement generated by these new ideas encouraged him to start his own company and involve more people from different horizons in designing tools and methods to implement the principles of TOC. This effort gave birth to an execution technique called DBR (Drum Buffer Rope). Unfortunately, his initial success could not stand for long. In fact, the revolutionary cost considerations introduced by this new methodology and the drastic organizational changes required by a typical TOC/DBR implementation were very difficult to swallow at that time (and even now to some extent!) and the aggressive nature of Dr. Goldratt led to his bankruptcy. A group of English investors took over his company and transferred the headquarters to England. Dr. Goldratt evolved into an outstanding educator and consultant and founded the Avraham Y. Goldratt Institute as a driving force and instigator of his concepts. The ‘90s have seen Dr. Goldratt finally gain a much deserved recognition and he finally established himself as one of the gurus of the modern industrial management. In the meant time, many companies saw a genuine opportunity in applying his principles and some of them flourished developing and selling APS solutions inspired from the TOC/DBR principles. The academia which, for a long time, has been perplex and even negligent towards this new trend started seeing a wealth of potential interesting research and papers started to be published in some of the leading journals1. The concepts evolved into many auxiliary names such as Synchronous Manufacturing, Constraints Management, etc. 2- What is TOC The APICS dictionary (9th edition, 1998) defines the Theory of Constraints as “A management philosophy developed by Dr. Eliyahu M. Goldratt that can be viewed as three separate but 1 Many interesting papers have been published in the International Journal of Production Research. Some of the papers I recommend are: [1] Russell, G.R. and Fry, T.D., Order review release and lot splitting in drum-buffer-rope International Journal Production Research, 1997, Volume 35, No 3, 827-845 [2] Simons, J. et al, Formulation and solution of the drum-buffer-rope constraint scheduling problem (DBRCSP) International Journal Production Research, 1996, Volume 34, No 9, 2405-2420 [3] Frendendall, L. D. and Lea, B. R., Improving the product mix heuristic in the theory of constraints International Journal Production Research, 1997, Volume 35, No 6, 1535-1544 TOC/DBR and Synchronous Manufacturing – Quick Reference Guide Page 3 interrelated areas – logistics, performance measurement and logical thinking. Logistics, include drum-bufferrope scheduling, buffer management and VAT analysis. Performance measurement includes throughput (T), inventory (I) and operating expense (OE) and the five focusing steps. Thinking process tools are important in identifying the root problem (current reality tree), identifying and expanding win-win solutions (evaporating cloud and future reality tree) and developing implementation plans (prerequisite tree and transition tree)”. The foundation of the TOC was based on a critical approach to the cost accounting system. In fact, as explained by Goldratt’s disciples Umble and Srikanth 2, “this system has some fundamental flaws. It focuses too much attention on direct labor and ignores the effects of interactions that exist in manufacturing organizations. This has resulted in a highly localized managerial perspective that overemphasizes the reduction of direct labor. The typical result is a highly nonsynchronized flow of products through the plant that adversely affects the firm’s ability to compete” In his books The Goal (1984), The Race (1986) and The Haystack Syndrome (1990), Goldratt introduces the following three measurements tools: ♦ Throughput (T) 􀂾 The rate at which the system generates money through sales = Sales – Raw Material ♦ Inventory (I) 􀂾 All the money invested in purchasing the things the system intends to sell ♦ Operating Expense (OE) 􀂾 All the money the system spends in turning Inventory into Throughput The objective of TOC is quite simple, increasing T while decreasing I and OE. Nevertheless, as intelligently mentioned by Goldratt, we can devote as much resources as we want trying to decrease I and OE, we will not do better than reducing them to 0. On the other hand the limit of T is infinity and that’s where the significant part of the company’s effort has to be focused. Other measurements tools used by TOC/DBR include: 􀂃 Net Profit = T – OE 􀂃 ROI = (T – I)/OE 􀂃 Productivity = T/OE 􀂃 Inventory Turns = T/I Umble and Srikanth state that “these operational measures can help managers develop a more effective global perspective for decisions affecting the firm’s operation. Focusing on these measures will help managers evaluate the impact of specific manufacturing actions and decisions on overall system performance. This, in turn, will enhance the quality of decision making throughout the organization and improve both the competitive position and profitability of the firm.” TOC preaches the need for a global approach to the scheduling problems. In fact, the traditional cost accounting system focuses on maximizing local measures by encouraging productivity by cost center (work center) while neglecting the simple truth that the sum of local optimas is not necessarily a global optima. In fact, industrial managers have the tendency to have all their machines working all the time to achieve high levels of productivity thinking that the ideal plant is the one that has all work centers running at full 2 Synchronous Manufacturing – Principles for World Class Excellence by Michael Umble and Mokshagundam L. Srikanth, Spectrum Publishing Company - 1995 TOC/DBR and Synchronous Manufacturing – Quick Reference Guide Page 4 speed in order to maximize its output (or throughput). Nevertheless, a typical plant has a wide variety of machine models which usually do not have the same production capabilities. Trying to run all these machines at 100% will simply result in a tremendous amount of WIP and the production lead times will unequivocally become much longer. The impact of such environment on the delivery performance is most likely the core problem causing nightmares to foremen and managers all over the world. Consider the following production line: It is clear that this system can not produce more than 30 pieces per hour. Running all three machines at 100% of their capabilities will simply result in a huge queue building in front of m/c 2 while m/c 3 will be starving waiting for more items from m/c 2. The traditional cost accounting system is clearly wrong in thinking that maximizing the output of each machine will result in a maximum output for the whole system. We do not live in a perfect world and the components of any system are subject to two main factors: Dependency and Statistical Fluctuations. A manufacturing plant is a perfect illustration of the impact of these two facts. Resources depend on each other since they form a chain or network and statistical fluctuations add a dimension of unpredictability that makes the management much more difficult. 3- Main Concepts of TOC/DBR 3-1 Decision Process Goldratt [2] summarizes the Throughput World’s decision process in the following steps: 1- Identify the System’s Constraint(s) 2- Decide how to exploit the system’s constraint(s) 3- Subordinate everything else to the system’s constraint(s) 4- Elevate the system’s constraint 5- If, in the previous steps, a constraint has been broken, go back to step 1, but do not allow inertia to cause a system’s constraint. A constraint is defined as anything that prevents the system from achieving a higher throughput. Usually, constraints are the bottlenecks of a system. In a manufacturing environment, what we should be looking for are essentially the work centers that are consistently overloaded and are having trouble keeping up with demand. I usually converse with the production people and use historical and current data to draw graphs showing the load per machine over different time buckets to determine with as much exactitude as possible the potential constraint(s). This first step is quite critical because determining the system’s constraint(s) will give us a good idea on the system productive capabilities. The second step aims to do whatever it takes to keep the constraints running all the time. In fact, since the system’s overall output cannot be higher than the constraint’s output, keeping the drum busy is critical. The following sections will explore this with more detail. In addition, to m/c 1 50 p/hr m/c 2 30 p/hr m/c 3 200 p/hr Max Output ? TOC/DBR and Synchronous Manufacturing – Quick Reference Guide Page 5 ensure a high performance and make sure to reduce WIP and lead times, everything in the system has to be subordinated to the drum(s). A special attention has to be devoted to the machines feeding the drum(s) and also to the gating operations. In other words, material release and nonconstraints’ schedules have to be in sync with the drum schedule. Steps 4 and 5 are basically the essence of an on-going improvement effort that aims to prevent inertia from becoming the system’s constraint. In fact, a drastic change in the company’s products portfolio might end up switching the highest load to another resource. Our system has to be responsive and flexible enough to allow for the necessary changes. The fourth step states that we should always try to eliminate the constraint by finding the suitable solutions such as outsourcing or adding more resources if possible. However, some TOC specialists think that for the system to run properly maintaining at least one constraint will help set the pace for the entire organization and serve as a reference. This idea is still open for discussion. 3-2 Drum-Buffer-Rope Scheduling Technique Please refer to the glossary I added at the end of this document for an exact definition of Drum, Buffer and Rope. DBR is to TOC what Kanban is to JIT. In fact, most TOC implementations are done using this technique which genuinely applies the TOC principles and has been quite successful in many environments. The Drum is the system’s constraint that sets the pace for the entire organization. In DBR terminology, the drum is also the schedule of the constraint. The Theory of Constraints defines three types of buffers as depicted by the following graph: Shipping Buffer time Customer due-date System’s end-date Drum Buffer Assembly Buffer Material Release Item Workcenter/Operation End-Item TOC/DBR and Synchronous Manufacturing – Quick Reference Guide Page 6 In TOC/DBR buffer are time buffers and not physical buffers. Their purpose is to reduce the system vulnerability in dealing with statistical fluctuations. The Drum Buffer is a time offset that helps achieve the previously stated goal of exploiting the drum by having it running all the time. By placing this time offset in front of the drum we help reduce/absorb the impact of uncertainty along the production chain from the gating operations all the way to the constraint. This uncertainty might materialize in the form of breakdown of machines feeding the drum, scheduled maintenance, labor absenteeism, etc. The drum buffer can be seen as a powerful tool in helping us prevent the drum from starving. In more practical terms, the drum buffer (or time offset) is propagated backward to the gating operations and will result in raw material being released earlier than expected by the conventional lead time. By releasing earlier we will help maximize the probability that the lot will get to the drum at the required time or a little bit earlier if it encounters (as we expect!) these monsters of statistical fluctuations. A section on buffer management will further explain this extremely interesting concept. The Shipping Buffer is also a time offset that helps protect the customer due-date. By including it in our model we will try to get products to the shipping area at or earlier than the expected delivery date/time. The Assembly Buffer is a time offset placed at the levels of the main production converging points and helps synchronize production. In fact, a common problem in assembly is the synchronization between the different production sub-lines feeding the subassembly work center. By placing assembly buffers on the lines that have been usually struggling to get to the sub-assembly w/c at the same time with the other feeding lines, we will help better synchronize our production system and also reduce unnecessary WIP. We might wonder how to determine the buffer sizes. An extensive research is being conducted to make buffer sizing more of a science and not only an empirical approach. In my own implementations I did have formulas I used but the rule of thumb was to start with a large buffer size and keep reducing it until we have a smooth flow. Needless to say that the smaller the buffer sizes, the shorter the lead times and hence the faster the production flow. Some faultfinders of TOC/DBR state that the buffer concept will unnecessarily extend the lead time. However, the truth is that this interesting tool helps reduce the specter of statistical fluctuations to a manageable entity with additional tools known as Buffer Management that we will explore in the next section. The Rope is the material release schedule tied to the drum. In other words, we are trying to make sure that no material is released to the shop floor without the “prior approval” of the drum. The shop floor has a virtual rope tying the drum to the gating operations, each time the drum finishes a lot it will pull this rope to ask for more material to be released. This is an extremely powerful concept that has an immediate impact on both leadtime and WIP. Release only what is needed when it is needed! This further enhances the idea of a global management vs. a localized approach where material is release whenever there is available capacity on the “next” w/c. Besides, one of the foundations of TOC/DBR is to have a rigorous First-In-First-Out shop floor policy used at all work centers. This has a immediate impact on WIP and leadtime control and reduction. To me one of the major contributions of TOC/DBR is this new hybrid system that combines both PUSH (MRP) and PULL (JIT) systems. The way I see it that up to the TOC/DBR and Synchronous Manufacturing – Quick Reference Guide Page 7 constraint the system behaves as a PULL system with the constraint as the mastermind. Once we get over the drum, it is perfectly a PUSH system where lots are processed in their logical sequence until the shipping area. OPEN FOR DISCUSSION! 3-3 Buffer Management Buffer Management is the backbone of shop floor control in a synchronous manufacturing environment. Depending on the size of the system it can be done either manually or using a software tool. The designated buffer manager has the sole responsibility to keep track of the production flow progress and report any holes (or missing lots) in the buffers. The most common method in buffer management if to have the buffer split into 3 zones (Green, Yellow and Red). Using the drum and the material release schedule, the buffer manager can predict when a lot is expected to show up at the buffer (the location is, as explained above, either a drum, an assembly area or a shipping area). The buffer manager will be watching the buffer penetration which is in other words the degree of lateness of the upcoming lots. The later the buffer is, the deeper the penetration into the buffer. If the buffer size is 3 days, then the buffer manager will follow this procedure: ♦ On-time < Order/Lot < 1 day late 􀂾 This is a no-worry zone. The flow is going smoothly. ♦ 1 day late < Order/Lot < 2 days late 􀂾 This is the warning zone. A flag has to be associated to this lot. Keep an eye on it. ♦ 2 days late < Order/Lot < 3 days late 􀂾 This is the expedite zone. Break the FIFO rule and place this lot at the top of the queue for all remaining steps. The buffer management is also very useful as a model validation tool. In fact, two model parameters can be verified using buffer management: 1) Buffer Size – As mentioned earlier, the most common approach if determining the buffer size is to start with a large one and keep fine-tuning it until satisfactory results are achieved. The fine-tuning process is done using buffer management. If the buffer is always full which means that the buffer manager is having hard time keeping up with late lots3, then we can conclude that our buffer is too small and that its size does not match the magnitude of the upstream statistical fluctuations. We will have to increase the length 3 Be careful with the language! Remember that we are dealing with time buffers here. A full buffer is a buffer full with holes which are late orders. In more practical terms, in the case of a drum buffer, the area in front of the constraint will be missing many lots. time Buffer length No problem yet Flag - keep an eye! Expedite - break the FIFO rule TOC/DBR and Synchronous Manufacturing – Quick Reference Guide Page 8 of the buffer. If on the other hand, the buffer is always “empty” which means that very few late orders are being recorded, then we conclude that our buffer is too big and that we need to reduce it. This will have an immediate impact of both leadtime and WIP. 2) Drum Selection – The buffer management is also very useful in validating our drum selection. In fact, we should expect the drums to be difficult to manage given the fact that they are running near full capacity all the time. If a drum buffer is always empty, we might further investigate whether this machine is a true constraint or not. 3-4 VAT Analysis VAT analysis can be seen as an important prerequisite in any synchronous manufacturing modeling. In fact, the technique helps determine the nature of the flow and determine the points that need close control. Any plant can be seen as a T (or I), A or V type of plant or any combination of these shapes. A look at the production flow gives this information which can be used in determining the most suitable buffer locations and the policies that need to be implemented. A compilation of several experiences in this modeling exercise gives the following results4: ♦ I Plants 􀂾 Issue: How to utilize capacity? 􀂾 Variance: Process variance, routing structure (same resource is used in different parts of the process) 􀂾 Solution: Dynamic lot sizing (drum schedules), buffer management ♦ T Plants 􀂾 Issue: Stock management, forecasting 􀂾 Variance: Demand 􀂾 Solution: Getting pure demand, time buffers instead of stocks, buffer management ♦ A Plants 􀂾 Issue: Synchronize assemblies, exploit capacity 􀂾 Variance: Process variance, de-synchronization at assemblies 􀂾 Solution: Synchronized material release paced by the drum, assembly buffer management ♦ V Plants 􀂾 Issue: Many divergent points, as a result there is misallocation of raw materials and capacity 􀂾 Variance: Demand, shop floor decision making 􀂾 Solution: Correct stocking levels, correct decisions on material allocation at common parts 3-5 Protective Capacity The concept is arguably the most striking example of the radical difference between synchronous manufacturing and MRP with its traditional cost accounting tools. The driving vector for synchronous manufacturing is to balance flow not capacity. This is quite 4 For more on VAT analysis and case studies, please refer to: The Constraints Management Handbook by Michael S. Spencer and James F. Cox - The St. Lucie Press/Apics Series on Constraints Management - 1997 TOC/DBR and Synchronous Manufacturing – Quick Reference Guide Page 9 remarkable. The main objective of TOC/DBR is have the whole plant support the drums. Furthermore, it preaches that for a system to be stable, we need to reduce its vulnerability vis-à-vis statistical fluctuations. What might hurt the system most is a breakdown of the drums or of any feeding resource. On the other hand, MRP preaches the need for high productivity results by having all machines running near full capacity. This will end up creating unnecessary inventory while making any disruption along the production chain felt badly. A system in which capacity is being balanced is a very unstable one. Protective capacity is defined as the difference is productive capability between the constraint and nonconstraint. The following illustration will explain its usefulness. Machine A is feeding Drum D. A physical buffer has been created between these 2 machines as a cushion. In Scenario 1, there is no protective capacity. Machine A and the drum have the same productive capacity. Let’s assume that the physical buffer contains 100 pieces. Let’s also suppose that machine A goes down for 2 hours the drum will immediately start consuming from the buffer and will reduce the level to 80 pieces. Machine A is up and running again but there is no way to get the physical buffer to its initial level. A could break down again and again and in order to keep the drum running we will have to consume from the physical buffer. However, we only had 100 pieces. This is clearly a very unstable environment and in order to secure the drum upstream feeding operation we need an infinite physical buffer in front of it!!! In Scenario 2, the stakes are very different. In fact, we deliberately chose to run A at 50% of its capability to match the drum D output since any additional amount of items will create unnecessary inventory. Let’s assume that the physical buffer has 50 pieces. If A goes down for 2 hours, D will start consuming from the buffer and will reduce its level to 30 pieces. Scenario 1 Scenario 2 Machine Capacity Utilization A 10 pc/hr 10 pc/hr D 10 pc/hr 10 pc/hr Machine Capacity Utilization A 20 pc/hr 10 pc/hr D 10 pc/hr 10 pc/hr A D A D TOC/DBR and Synchronous Manufacturing – Quick Reference Guide Page 10 However, once A is back to normal, we could double its output from 10 to 20 for only 2 hours in order to bring the buffer back to its initial level of 50 pieces. This situation is clearly much more stable than the previous one. In fact, by setting a protective capacity between A and D we are in position to reduce the physical buffer and strengthen the system in dealing with any potential disruptions. That is one of the reasons why synchronous manufacturing preaches the need for investing in excess capacity! 4- Conclusion For a new methodology to work, the genuine commitment of great industry leaders is much needed. Unfortunately this has never been the case for synchronous manufacturing. The drastic changes to the traditional cost accounting methods suggested by TOC have been very difficult to admit even though their logic is almost flawless. A typical TOC/DBR implementation is an extremely interesting experience given the fact that it has to involve the entire organization. My personal experiences have led me to some difficult situations where discussion and persuasion was the only way to keep things moving. For the implementation to be successful, a constant support has to be provided. In fact, some of the concepts such as Protective Capacity will inevitably create frictions between finance and operations. How can you convince MRP people that by using your machines less, you will end up producing more!!! The statement sounds crazy! However, the truth is there! Also, how can you secure simple employees that they do not risk their jobs by reducing their working time on a nonconstraint machine? Won’t they try to stretch their tasks and make them last a regular time and hence deviate from the objective?! How can you organize your workforce to implement the concept of protective capacity while using your human resources for other useful tasks. How can you convince people that a genuine DBR implementation will provide you with precise schedules only for the drums while other machines will mainly have to work on FIFO basis. Won’t this create animosity between a “constraint department” and a “nonconstraint department”. Won’t this also introduce chaos to the system? The list of issues associated to the organizational changes needed by TOC can go on and on. Although the concepts sound simple and make perfect sense, their implementation is very often an art of negotiation. Some other operational challenges may arise when implementing TOC/DBR. In fact, buffer sizing and allocation can be a tough exercise. Nowadays, many companies have used TOC/DBR principles to provide the market with constraint based software solutions. Nevertheless, only a few5 genuinely apply the whole concept and they are having difficulties achieving the great success they deserve. This is a bizarre situation. A concept that seems to make perfect sense is still experiencing problems gaining wide application more than twenty years after its inception. However, I have been witness to cases where the full implementation of TOC/DBR has achieved spectacular results. The approach does work and further enhancements to its tools and features will make it easier to implement. 5 Check out: Thru-Put Technologies, Inc at http://www.thru-put.com and Scheduling Technology Group at http://www.stgamericas.com TOC/DBR and Synchronous Manufacturing – Quick Reference Guide Page 11 Glossary6 6 APICS Dictionary, 9th Edition B Buffer In the theory of constraints, buffers can be time or material and support throughput and/or due date performance. Buffers can be maintained at the constraint, convergent points (with a constraint part), diverging points and shipping points. Buffer Management In the theory of constraints, the process in which all expediting in a shop is driven by what is scheduled to be in the buffers (constraint, shipping and assembly buffers). By expediting this material into the buffers, the system helps avoid idleness at the constraint ad missed customer due dates. In addition, the causes of items missing from the buffers are identified and the frequency of occurrences is used to prioritize improvement activities. C Constraint Any element or factor that prevents a system from achieving a higher level of performance with respect to its goal. Constraints can be physical, such as a machine center or lack of material, but they can also be managerial, such as a policy or procedure. Constraint Management The practice of managing resources and organizations in accordance with theory of constraints (TOC) principles. Current Reality Tree In the theory of constraints, a logic-based tool for using cause-and-effect relationships to determine root problems that cause the observed undesirable effects of the system. D Drum In the theory of constraints, the constraint is viewed as a drum and nonconstraints are like soldiers in an army who march in unison to the drumbeat; the resources in a plant should perform in unison with the drumbeat set by the constraint. Drum-Buffer-Rope In the theory of constraints, the generalized technique used to manage resources to maximize throughput. The drum is the rate or pace of production set by the system’s constraint. The buffers establish the production against uncertainty so that the system can maximize throughput. The rope is a communication process from the constraint to the gating operation that checks or limits material released into the system to support the constraint. F Future Reality Tree In the theory of constraints, a logic-based for constructing and testing potential solutions before implementation. The objectives are to (1) develop, expand and complete the solution and (2) identify and solve or prevent new problems created by implementing the solution. I Inventory In the theory of constraints, inventory is defined as those items purchased for resale and includes finished goods, work-inprocess and raw materials. Inventory is always valued at purchase price and includes no value-added costs, as opposed to the traditional cost accounting practice of adding direct labor and allocating TOC/DBR and Synchronous Manufacturing – Quick Reference Guide Page 12 overhead as work-in-process progresses through the production process. O Operating Expense In the theory of constraints, the quantity of money spent by the firm to convert inventory into sales in a specific time period. P Protective Capacity A given amount of extra capacity at nonconstraints above the system constraint’s capacity, used to protect against statistical fluctuation (breakdowns, late receipts of materials, quality problems, etc.) Protective capacity provides nonconstraints with the ability to catch up to “protect” throughput and due-date performance. R Rope In the theory of constraints’ drum-bufferrope system, the rope consists of the minimum set of instructions to ensure that (1) nonconstraint resources are used (and not overactivated or misallocated); and (2) material is released into the system and flows to the buffers in a way that supports the planned overall system throughput. T Theory of Constraints A management philosophy developed by Dr. Eliyahu M. Goldratt that can be viewed as three separate but interrelated areas – logistics, performance measurement and logical thinking. Logistics, include drumbuffer- rope scheduling, buffer management and VAT analysis. Performance measurement includes throughput (T), inventory (I) and operating expense (OE) and the five focusing steps. Thinking process tools are important in identifying the root problem (current reality tree), identifying and expanding win-win solutions (evaporating cloud and future reality tree) and developing implementation plans (prerequisite tree and transition tree). Throuhput In the theory of constraints, the rate at which the system (firm) generates money through sales. Transition Tree In the theory of constraints, a logic-based tool for identifying and sequencing actions in accomplishing an objective. The transitions represent the states or stages in moving from the present situation to the desired objective. V VAT Analysis In the theory of constraints, a procedure for determining the general flow of parts and products from raw materials to finished products (logical product structure). A V logical structure starts with one or few raw materials and the product expands into a number of different products as it flows through divergent points in its routings. The shape of an A logical structure is dominated by converging points. Many raw materials are fabricated and assembled into a few finished products. A T logical structure consists of numerous similar finished products assembled from common assemblies, sub-assemblies and parts. Once the general parts flow is determined, the system control points (gating operations, convergent points, divergent points, constraints and shipping points) can be identified and managed.