TOC recognizes that it is possible to produce without contributing to throughput. TOC defines production that contributes to throughput as utilization. Production that does not contribute to throughput is known as activation. Activation is not desired because it not only fails to increase throughput, but it also increases inventory and operating expenses. This is consistent with the Just-In-Time (JIT) philosophy.
What is Activation?
Activation is a concept in logistics that refers to production that does not contribute to throughput. To understand activation, it is important to first understand throughput and utilization.
Throughput is the rate at which a system generates its goal, which is usually the production of goods or services. It is the measure of how much output is being produced within a given time frame. Utilization, on the other hand, refers to the extent to which a resource is being used to generate throughput. It is the measure of how effectively resources are being utilized to achieve the desired output.
Activation, therefore, is the production that does not contribute to throughput. It is the production that does not add value to the system and fails to increase the desired output. Activation is undesirable because it not only fails to increase throughput, but it also increases inventory and operating expenses.
To illustrate this concept, let's consider an example. Imagine a manufacturing company that produces widgets. The company has a production line with a certain capacity to produce widgets. If the production line is running at its full capacity and producing widgets that are being sold to customers, then it is considered utilization. The production is contributing to the desired throughput, which is the sale of widgets.
However, if the production line is running at its full capacity but producing widgets that are not being sold or used by customers, then it is considered activation. This production does not contribute to the desired throughput because it does not generate sales or add value to the system. Instead, it increases inventory levels and operating expenses, which are undesirable outcomes.
Activation is consistent with the Just-In-Time (JIT) philosophy, which aims to eliminate waste and improve efficiency in production processes. JIT focuses on producing goods or services only when they are needed, reducing inventory levels, and minimizing operating expenses. By minimizing activation and focusing on utilization, companies can optimize their production processes and achieve higher levels of efficiency.
In conclusion, activation is the production that does not contribute to throughput. It is the production that fails to increase the desired output and instead increases inventory and operating expenses. By understanding and minimizing activation, companies can improve their efficiency and align with the principles of the Just-In-Time philosophy.