2 ms·
Yes it's well know in manufacturing management that there is a trade off between utilisation, capacity and cycle time. Naively it looks like it's cheapest to g
by Lio 5y ago
Yes it's well know in manufacturing management that there is a trade off between utilisation, capacity and cycle time.
Naively it looks like it's cheapest to get close to 100% utilisation by removing all slack from the system.
If you do that though you can't deal with shocks to the system and it costs you much more in the medium term. In the long term your company dies.
This is very well illustrated by John Sterman's Beer game[1]. That's aimed at supply chains in general but works well in any system you can make brittle via cost over optimisation.
This happens a lot because initially over optimisation makes accountants and managers look good to share holders. By the time the chickens have come home to roost they've moved on to another job.
1. https://www.isixsigma.com/training/training-materials-aids/the-beer-distribution-game/ https://www.isixsigma.com/training/training-materials-aids/t...