Thursday, August 5, 2010

Focus and Leverage Part 3

In the last blog one of the things I wanted to demonstrate is where to focus your improvement efforts.  But before I do this, I want to explain to those of you that don’t have much experience with or exposure to TOC, some of the basic concepts of TOC. One of the best ways to demonstrate these concepts is through the use of simple graphics.




The figure above a simple piping system used to transport water. As you can see, the pipes have different diameters. Notice the question in the box? How would you answer this question? If you wanted to increase the flow of water through this process, what would you do and where would you focus your efforts? If you said you would increase the diameter of Section C, you would be right. You would focus your efforts on Section C to improve the throughput of this piping system because Section C is constraining the flow.

Ok, so let’s assume most of you got this correct. Would focusing on any other section increase the flow of water? The correct answer is, no it wouldn’t. Now let’s look at the figure below. This is a 4-step manufacturing process with each of the step’s processing times listed. Using the piping analogy we just discussed, which step prevents more parts from being produced? Or another way of saying this is which step is preventing us from achieving more throughput? If you answered Step C, you were correct. Because Step C requires 3 minutes to process the product, this process cannot produce product any faster than 20 parts per hour (i.e. 60 minutes in an hour divided by 3 minutes per part). If you reduced the processing time of Step B from 2 minutes to 1 minute, have you increased the throughput of this




process? The answer is no, you’re still limited by Step C at 3 minutes per part. So like the piping system, you would have to focus your improvement efforts on Step C to improve the throughput of the process.

So why am I so worried about improving throughput? In my next blog, I’m going to explain why focusing your improvement efforts on increasing throughput rather than the typical cost reduction is the best way to make more money.

Bob Sproull

http://www.sproullconsulting.com

3 comments:

christianpaulsen62 said...

Bob,

Great illustrations! A lot of people seem to miss the point you raise by going after improvements that won't improve the TOC. I'm looking forward to your next post.

Thanks,
Chris Paulsen

Ignacio said...

Hi again, Bob.
It´s easy and simple but I find very dificult to explain this to my colleagues.
Thanks a lot.
Ignacio Heredero

Anonymous said...

Good Job Bob!