Goldratt’s Golden Nugget #12Light blue 2, or: A way to exploit the protective capacity using orders (as opposed to using stock)

(MTA combined with MTO)

In MTA environments there is a need to hold protective capacity. The problem is that in order to use the protective capacity when needed, this capacity is on average idle. In the previous nugget (“light blue 1″, no. 11) we discussed a way to directly exploit the protective capacity; to use this idle capacity to satisfy more sales. The first light blue method is based on the use of protective capacity to produce to stock, which is then offered in segmented markets – dumping markets. The nugget ended with a warning not to use this method if the company cannot find suitable dumping markets. In cases where the company can’t find enough such markets, and consequently a part of the protective capacity is left unutilized, there is another possible method that can enable exploitation of the remaining free protective capacity. This method is based on processing clients’ orders by the protective capacity and therefore it is applicable only in mixed MTA+MTO environments.

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Light Blue - a Buffer Management concept Dr. Eliyahu M. Goldratt Share this video Dr. Goldratt talks about a relatively new Buffer Management concept called "Light blue". The details of this concept can be found in his Golden Nuggets articles published in his blog (http://blog.eligoldratt.com). 3 min, English