Continuing with my
series on healthcare and my push for everyone to get a copy of Performance Improvement for Healthcare,
let’s now discuss how Constraints Management fits into our healthcare
discussion, again using direct quotes from this wonderful book.
“In The
Goal, Goldratt details a systematic approach to managing complex
organizations by identifying and controlling key leverage points within a
system or process. By managing these key control points, healthcare organizations
can focus on areas that drive system-level improvement instead of trying to
manage every element of a process, which can lead to local optimization without
systemic impact.”
“Constraints
Management is a systems approach that recognizes that every system has a
goal and a set of necessary conditions that must be satisfied to achieve that
goal. As such, Constraints Management begins by identifying the critical
success factors necessary to realize the goal and aligns the system to attain
greater levels of performance while minimizing waste.”
“Goals may range from
reaching superior levels of profitability now and in the future for a
for-profit organization to increased coverage or availability of provided
services for a not-for-profit company or government agency. Because it is
grounded in systems thinking, Constraints Management looks at materials,
information, and money flows and encompasses techniques useful for production
and logistics (e.g., drum-buffer-rope, critical chain project management, and
buffer management), performance measurement (e.g., throughput accounting), and
problem solving (e.g., thinking processes). It therefore breaks through the
“silo mentality” of many organizations, focusing all efforts on satisfying
end-user requirements. Dr. Kevin Watson of Iowa State University sees
Constraints Management as focused, robust, scalable, and generalizable, as
described in the next few paragraphs.”
“A constraint
is anything that limits the system from achieving higher performance
relative to its goal. In healthcare, a constraint is anything that impedes the
ability or means to provide or deliver care. H. William Dettmer, author of
numerous books on Constraints Management, defines seven basic constraint types:”
·
Market
·
Resource
·
Material
·
Supplier/vendor
·
Financial
·
Knowledge/competence
·
Policy
“He also
adds that a policy is most likely behind a constraint from any of the first six
categories. On the other hand, Dr. Boaz Ronen, a business administration
professor at Tel Aviv University and coauthor of the book, Focused
Operations Management for Health Services Organizations, defines only four
types of constraints in a managerial system”:
·
Resource
·
Market
·
Policy
·
Dummy
“The Theory of Constraints International Certification Organization
(TOCICO) Dictionary calls policy constraint a common misnomer
because “Bad policies are not the constraint; rather they hinder effective
constraint management
by inhibiting the ability to fully exploit and/or subordinate to the
constraint.” Regardless of how constraints are classified, the Constraints
Management body of knowledge provides tools to identify and manage all types of
constraints. Constraints Management is focused, recognizing that the
system’s ability to attain its goal is inhibited by a limited set of variables
or constraints.”
“Constraints
Management focuses attention and concentrates resources at the point in the
system where they may be leveraged to achieve the highest level of goal attainment.
Constraints Management allows the system to achieve optimal output and increase
flexibility and responsiveness, all while minimizing waste. This synergistic
effect results from subordinating the system to the constraint and creating
protective capacity at nonconstrained resources, thereby better enabling the
system to deal with the consequences of variability.
Constraints
Management tools are robust. Systems managed under Constraints
Management strategically buffer against variability, do not impose rigid
material-handling rules, and schedule only strategic control points in the
system. Therefore, Constraints Management systems are better able to mitigate
the effects of uncertainty than similar JIT systems. This makes Constraints Management
adaptable for highly variable manufacturing and for the purpose of managing
supply chains.
Constraints
Management techniques are scalable and generalizable to a wide
set of operations and supply-chain environments. Techniques that are useful at the
process level are applicable at higher levels of aggregation. Constraints Management tools are also
generalizable to applications far beyond production and logistics as they were
presented originally in The Goal.
The thinking
processes used in the resolution of unstructured problems are applicable to
decision making in such widely varying environments as conflict resolution,
quality control, continuous improvement, contract negotiation, policy
reengineering, and strategy development. Once managers understand the basic
concepts, they are able to apply that knowledge with little additional training
to a wide range of applications, for example, manufacturing and supply-chain
environments—from control of a manufacturing cell, to project management, to
distribution and logistics management.
Constraints
Management Tools System
improvements under Constraints Management seek to identify (1) what to change,
(2) what to change to, and (3) how to cause the change. This follows a process
of ongoing improvement (POOGI) comprised of two prerequisites and five
steps that underlie all Constraints Management production techniques. The
prerequisites for Constraints Management process improvement are (1) define the
boundaries of the system and its goal, and (2) determine a means to measure
goal attainment. While these steps appear obvious, failure to explicitly
identify the scope and purpose of the system and measure how the system
performs in achieving that goal can result in dysfunctional behavior. Having
satisfied the prerequisites, system improvement proceeds according to the five
focusing steps sequence:
1.
Identify the system constraint(s). What limits the
performance of the system now? What is the weakest link in the system?
2.
Decide
how to exploit the system’s constraint(s). How can the most performance
be achieved from a constrained step in the process without additional
investment? Here, exploit means “use, develop, make use of, take
advantage of, and make the most of.”
3.
Subordinate/synchronize everything else in
the system to the above decision. Set up and implement rules to maximize the
capacity of the system based on the speed of the system’s constraint. In this
step, all parts of the system that are not constraints are required to
do whatever they can to support the exploitation plan. Additionally, all
nonconstraints must not do anything that would interfere with the exploitation
plan for the constraint. And most important, all nonconstraints (most of the
system) must recognize that their own efficiency is not as important as
supporting the system constraint, which requires measurement changes.
4.
Elevate the system constraint. To physically increase
the capacity of the system through the acquisition of or investment in more
resources. Always remember to predict
where the constraint will be after elevation and its resulting impact on global
performance. The location of any new constraint definitely will affect an
organization’s elevate strategy.
5.
Go back to step 1. This will ensure that improvement
is ongoing and never ceases. It also helps to avoid inertia by keeping at bay
the relentless tendency to accept established precedent. Even the most
transformational improvements, once established, become the status quo.
Originally applied to
manufacturing organizations, the concepts of Constraints Management have
branched out successfully to many business environments, including service
organizations, project-based companies, not-for-profits, and most recently,
healthcare. By introducing Constraints Management, hospitals can gain
significant insight into which areas to focus their performance-improvement
efforts.
In my next posting
we’ll take a look at a few examples of how this integration has worked
successfully in the healthcare field. My
next posting will be my last one in this series on healthcare, so I urge all of
you to get this book….you won’t regret it!
Bob Sproull
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