Saturday, August 21, 2010

Focus and Leverage Part 7

Hello again everyone. I apologize for taking so long to post this blog, but a new grandson came into my life and I had to go meet him. In Part 6 I asked everyone to think about what this improvement methodology might look like. The figure below is a visual of what this integrated methodology looks like and over the next few entries, we’ll walk through how it all works.

This integration weaves together the DNA of Lean and Six Sigma with the focusing power of TOC to deliver a powerful and compelling improvement methodology. All of the strategies, principles, tools, techniques and methods contained within all three methodologies are synergistically blended and time-released to yield improvements that far exceed those obtained from doing these three initiatives in isolation from each other.

The UIC is not simply a collection of tools and techniques, but rather a viable manufacturing strategy that focuses resources on the area that will generate the highest return on investment. The UIC is all about focusing on and leveraging the operation or policy that is constraining the organization and keeping it from realizing its full financial improvement potential.

In the figure below I have laid out the tools and actions you will use and perform at each step of the UIC. As you can see, there are no new or exotic tools being introduced. Instead, in creating the UIC, one of my objectives was to keep things simple.  Please keep in mind that there are other tools available that can be used to drive this improvement engine.  My point here was to list some of the more common ones.

The UIC accomplishes five primary objectives that serve as a springboard to maximize revenue and profits as follows:

1. It guarantees that you are focusing on the correct area of the process or system to maximize throughput and minimize operating expense and inventory.

2. It provides a roadmap for improvement to ensure a systematic, structured and orderly approach to improvement to maximize the utilization of your improvement resources.

3. It integrates the best of Lean, Six Sigma and TOC strategies to maximize your organization’s full improvement potential.

4. It ensures that the necessary, up-front planning is completed in advance of changes to the process or organization so as to avoid the “fire, ready, aim” mindset.

5. It facilitates the synergy and involvement of the entire organization needed to maximize your full return on investment.

In the next few entries we will discuss, in more depth, each step required to achieve these five primary objectives. Please, if you have any questions, post them for all to see and I will be happy to answer all of them.  Thanks everyone. B/S

Bob Sproull


Bob Sproull said...

I made the two graphics in this post very large so that everyone would have a chance to read the entries contained within each box.
Bob Sproull

Sindy Su Chu said...

I can TOC to helps focus the improvement effort and achieve the maximum result. Is there particular types of processes benefit more from it? I have worked in Low volume High Mix/job shop and HVLM process before learning about TOC concept. I like to hear feedback on your experiences.

Bob Sproull said...

Hi Sindy, nice to hear from you. Your question is a good one and the answer is relatively straight forward. As long as it is a process, now matter whether it is high volume or low volume, TOC will help you find the area of focus. All processes have constraints and the challenge lies in identifying it first and then applying LSS to it. The rewards will be huge. Thanks for your question Sindy.

Bob B/S

ganesh said...

Keep it coming Bob! Really informative

Sindy Su Chu said...

Bob, thanks. I hope to learn about the typical pay-back period of UIC project. Does it vary from plant types(i-plant, v-plant, a-plant, t-plant)? Or it depends on the project scope?

Thanks for sharing the wealth of your knowledge.

Bob Sproull said...

Hi Sindy. You question is a good one as always. The pay-back period is based upon several factors, but not the plant type. For example, if the constraint is internal and there is an opportunity to generate more sales, then you're looking at weeks for a bottom line improvement. However, if the market is the constraint, then it will take longer. That is, when the market is the constraint your focus needs to be on improving the competitive edge factors such as on-time deliver, quoted lead times, cost, quality, etc. Once you get going on improving these factors so that they're much better than the competition, your bottom line improvement won't take long. It really depends on where you are with respect to your competition. Thanks for the question Sindy.

Sindy Su Chu said...

Great point. I got it. Thanks!