My blog is focused primarily on the Theory of Constraints and how to use it to maximize the profitability of any company. I also discuss why integrating TOC with Lean and Six Sigma is the most dynamic improvement methodology available today.
The subject of one of my two presentations at the CPI Symposium this past weekend was aviation maintenance. Within that presentation I used an analogy between what takes place in a hospital emergency room and what takes place in an unscheduled maintenance environment. In both scenarios I discussed a different type of Drum Buffer Rope (DBR) that Bruce Nelson and I referred to in our new book as Multiple Drum Buffer Rope (MDBR). In a typical DBR setting you have a single buffer feeding a single drum...otherwise known as the system constraint. MDBR differs in this respect. You still have a single buffer, but it's feeding multiple drums. Let me explain.
In the hospital scenario, patients come into an ER and are primarily either ill or injured. They are observed by doctors and nurses and many times tests are run to help with the diagnosis. When the diagnosis is complete, the patient is either treated in the ER and released or admitted to the hospital when a bed is available.
In an unscheduled maintenance of say, helicopters, during flight something is found to be wrong which makes the aircraft unflyable (just like patients in and ER). Mechanics, Inspectors and Avionics Technicians inspect the aircraft on the flightline to make a diagnosis, just like the ER.Once there is a diagnosis, the helicopter is either fixed on the flight line or it’s sent to an aircraft hangar for repair, just like patients get sent to different wards and beds.
I made this analogy so that the attendees at the symposium would have a good frame of reference when I discussed MDBR.In the hospital environment we have a buffer of patients waiting to have their ailment treated while in the unscheduled maintenance environment you have a buffer of helicopters waiting to be fixed.When a bed in the hospital becomes available a signal is sent to the ER and a patient is pulled into the right ward.When a hangar bay becomes available a signal is sent to pull a helicopter into that bay.
So what does this MDBR system look like graphically?The Figure below is the MDBR system as it applies to the hospital environment with the drum, the buffer and the rope.
The following figure is a depiction of an Unscheduled Maintenance MDBR and as you can see, there is no real difference between the two.
It seems as though the same application could apply to any situation where you have a common buffer feeding multiple lines regardless of the industry. This analogy seemed to ring true for the attendees.
For those of you who weren't able to attend the CPI Symposium at Cal State Northridge or participate in the webinar of the symposium, it was a wonderful event. Yes there were hickups throughout the proceedings, including my own presentation on an Aviation Maintenance case study, but all in all it was good. I was privileged to work closely with Bob and Kevin Fox as the three of us attempted to present a unified vision for continuous improvement.
The over-riding message, among others, of this symposium was this. Improvement in parts of the system does not typically result in improvements to the system. Or...localized improvements do not translate into system improvements. The true power of the Theory of Constraints is realized by identifying the key leverage points in the system....the system constraint and then focusing your improvement efforts there. This simple focusing act unleashes the true benefits of both Lean and Six Sigma.
I had the opportunity to speak with many of the attendees at the symposium and in particular two college students attending Cal State. Both of them were sponges, soaking up as much information as they could. One of these students was majoring in Operation's Management and near the end of the symposium he approached me and asked me a very compelling question. He asked, "Since I will be a new employee of a company, how can I take all that I learned and apply it right away?" My answer shocked him when I said, "You can't....." I explained that many of the TOC teachings are counterintuitive and that there will be significant resistance from leadership. I further explained that especially the longer term leaders have been bound by the teachings and the performance metrics associated with traditional cost accounting. Metrics like efficiency and utilization have somewhat of a stranglehold on many leaders. When he repeated, "Then what can I do?" I responded by telling him that he would probably be hired as a supervisor in his first job....responsible for perhaps a single production line. I explained that if he applied what he had learned to his scope of responsibility and demonstrated superior results, they would stand out and be scrutinized. Let the results speak for themselves.
Another message that these two students and I spoke about was the importance of true involvement of subject matter experts (SME's). The people in the trenches....the people doing the work....the people making the products or delivering the service have all the answers if you'll simply take the time to listen and act on their ideas and suggestions. With these two simple messages, two light bulbs went off and I feel certain that at least for these two passionate students, this symposium was a life-changing event. I can only hope.....
For the past two days I have been involved in a CPI symposium in California. I was fortunate enough to be able to present on both days of the symposium. While I was there, our great CEO, Bahadir Inozu, of my company NOVACES, decided to have an interview with me with the sole purpose of promoting my new book Epiphanized: Integrating Theory of Constraints, Lean and Six Sigma. The interview was actually carried out by another NOVACES VP, Mike Hannan and has been posted on YouTube, but I wanted to share it with my loyal followers. Here is the link to it and I hope you enjoy it.
I finally received my free author's books that came with my publishing deal and I have divergent feelings. The story and the appendix are fantastic and I'm convinced that you'll all love the book, but having said that, there are mistakes in it. I was worried about this prior to it being printed because Bruce and I never received the final version to review before it went to print. Yes, there are silly grammatical errors and an occasional spelling error, but the real mistakes are in the graphics, mostly in the appendix. Bruce and I are making a comprehensive list of these mistakes and will be sending them to our publisher, but it's disheartening that these mistakes had to occur in the first print at all. So if you receive some of the first books, I want to apologize for the mistakes in advance.
Books should be like any other product produced. I mean you wouldn't knowingly send your product out with defects would you? I wouldn't either, but this is what happened with our book. Perhaps I'm being too harsh to say that our publisher "knowingly" sent them out with defects, but that fact is, they did get printed and shipped with the mistakes in the book. This tells me that our publisher's quality system must have holes in it. If the mistakes were all minor, that's certainly one thing, but when they're major defects like unlabled boxes in an Intermediate Objectives Map or an Interference Diagram or arrows pointing to nowhere that take away from the meaning and understanding of what's presented, then this becomes problematic.
I'm not a big fan of rework as I'm sure most of you aren't either. Rework costs money and assuming the defective product reaches the customer, it causes ill feelings and delays. Your quality system has to be designed to prevent these kinds of mistakes, even if they are picked up in a final audit or in our case, a final book review. It's always better to delay a shipment than it is to ship defective products.
Over the past decade there has been a serious debate about the spiraling cost of healthcare in the US and for that matter throughout the world.It seems as though no matter what is tried, these rising costs seem to be impervious to virtually everything.While manufacturing and other industries have been able to hold their costs down, healthcare costs continue to rise.While I have no intention of getting into the politics that we see and hear every day, especially as it applies to the so-called Obama Care, I do want to talk about the need for everyone in the healthcare industry to take a serious look at their processes and systems.
The purpose of this posting is to demonstrate how the Theory of Constraints (TOC) concepts and tools might be used to better manage costs, improve the effectiveness in operations that could result in increased customer satisfaction. I won’t be getting into the finite details in this posting, but I do want to demonstrate how TOC can have a positive impact on the healthcare industry.
To be fair, the healthcare industry is faced with challenges that many other industries simply don’t face every day. For example, unlike for profit businesses, healthcare revenues are simply declining as new reimbursement regulations are voted into law. Healthcare providers are reimbursed by insurance companies based on a set fee, regardless of what it costs the providers to provide care. It becomes clear then, that the providers must work to drive costs down and increase patient volume in order to compensate for the declining revenue. Even though many providers are attempting to reduce waste and variation through Lean and Six Sigma, in my opinion the real gains will come when TOC is included in their improvement tool kits.
So how should healthcare providers begin this journey using TOC.One of the first steps might be to translate some common TOC terminology. For example, the basic definition of Throughput can be modified from the standard TOC definition of Revenue minus Totally Variable Costs to something like, Reimbursement Rate minus the cost of things like drugs, medical supplies for each individual patient.Another translation might be in the definition of a healthcare constraint.Example of these type constraints might be something like the time required to receive test results, the time required the prepare and operating room between surgeries or even things like the availability of beds (not enough capacity) or specific restricted drugs or specialized medical supplies.
If you’ve ever been to a hospital emergency room, it seems like you wait forever to see a doctor and then once you do, hours are spent waiting for treatment.TOC has a solution for this part of the hospital in the form of Drum Buffer Rope and Buffer Management.And both of these can also apply to the hospital’s surgery unit as well. DBR could increase throughput significantly. Basically all of the subjects I’ve written about in my blog can easily translate to the healthcare industry.These subjects are universal.
TOC’s five focusing steps can be used quite well in the healthcare industry as follows:
1.Identify the system constraint(s).Constraints exists throughput a hospital from the ER and normal in-processing of scheduled surgery to outpatient clinics.If the constraints can be identified, they can definitely be exploited to generate significant improvements in throughput without adding additional personnel.This revenue improvement flows directly to the bottom line.
2.Decide how to exploit the system constraint(s).The translation of exploitation is simply deciding how to get more out of the constraint.Eliminating wait times by reducing waste in the constraint will clearly speed up the constraint.
3.Subordinate everything to the system constraint(s).The bottom line here is, let the constraint dictate things like entry of new patients into the system through something as simple as DBR.
4.If necessary, elevate the constraint.Sometimes, if you don’t reach the needed capacity to serve more patients, you might have to spend some money…..not big money…..just some money.The example I like to present is the clean-up crew in the hospital’s surgical department.Hiring additional cleaners pales in comparison to the revenue gains that can be achieved by being able to perform more surgeries.
5.Return to step 1, but don’t let inertia cause a new system constraint.Once you’ve broken a system constraint, a new one will appear immediately, so be ready.Beware that sometimes procedures that have been put in place can negatively impact the performance of the overall system.
As I said earlier, injecting TOC into the healthcare industry could have a significantly positive impact on the performance of hospitals.The integration of Lean, Six Sigma and Constraints Management is the clear path forward for all industries, but especially for the healthcare industry.With the proper focus and implementation, TOC will lead to short-term and long-term profitability.
For those of you who follow my blog on a regular basis, you have seen my piping diagram to demonstrate the concept of the system constraint.You will recall that the piping diagram that I have been using looks like the following.
A good friend of mine, Philip Marris who owns and operates Marris Consulting out of Paris, France also uses a piping diagram, but does so in a much better way in my opinion.In fact, his company’s logo, which is protected internationally as his company’s trademark, is a different form of the piping diagram that I use.Here is Philip’s company’s logo:
Philip’s consulting company is a Theory of Constraints, Lean and Six Sigma (TLS) consulting company and he has had amazing results improving companies.I have taken Philip’s logo, and with his permission, have created my own version.The reason I like Philip’s rendition of the piping diagram is that to me it more clearly allows the student to understand the concept of the constraint.
My rendition of this piping diagram consists of 9 different pipes, each with different diameters.Water is gravity fed through this series of pipes starting in Section A, flowing through Section B into Section C and so forth until it is collected in a container at the bottom of the piping system. The figure below is the system with no water flowing.
In the next figure, we introduce water into this system and it flows downward through each of the pipes until it exits into the awaiting container.
The reason I like Philip’s version of the piping system, rather than the one I have been using is that it is more graphic in demonstrating where the water accumulates.That is, the system constraint becomes obvious.In this drawing Section E is the constraint and in order to improve the throughput of water, we must focus on and exploit Section E. By enlarging the diameter of Section E (exploiting it) we see the effect. The constraint has moved to a new location which is easy to find because water accumulates there.In the next figure, I demonstrate the flow of water after the diameter of Section E has been enlarged and the water flows faster.How large you make the new diameter is completely dependent upon how much more water is needed.
I want to thank Philip for allowing me to use his concept and to remind everyone that his logo is protected internationally as his company’s trademark. Remember, the key to improving throughput is to first, identify the system constraint and then decide how to exploit it. This simple diagram demonstrates this concept quite well.
I have had many emails asking whether or not our new book will be available on Kindle and I'm happy to say that it will be. In about 2 months it will be available on Kindle and Nook and after that it will be available for downloading on Apple. One other announcement is that our book is now ranked as #1 in the Manufacturing and Operation's category for new releases on Amazon out of 55 books, so we're very excited about that. Here's a link to that site category: http://www.amazon.com/gp/new-releases/books/2691/ref=zg_bsnr_nav_b_4_2683
Bruce and I want to thank everyone who follows this blog and have made this all possible.
Much of my career has been spent in manufacturing and I’ve been very fortunate to work for some very progressive companies in that they provided an opportunity for me to grow and learn.In case you don’t know already, I’m no spring chicken, so I’ve seen quite a few improvement initiatives along the way.TQM was my first foray into a more structured approach to continuous improvement and I totally enjoyed learning all that Deming and Juran and others were teaching and writing about.Early on I fell in love with applied statistics and then along came Six Sigma, so you can just imagine how I embraced this.After that, Lean Manufacturing came into my world and I immediately embraced it.In fact, I remember using Six Sigma and Lean together very early on before it was the popular thing to do.But then I was introduced to the Theory of Constraints (TOC) and my world changed dramatically…..I had my epiphany!
Because I had so much success by combining Lean and Six Sigma, it was almost an automatic for me to merge this combination with my new improvement methodology, TOC.I was introduced to TOC way back in early 1997 when I was hired by a company for the sole purpose of either closing a struggling manufacturing facility or make it profitable.Since my background was primarily Quality and Engineering, I have to admit that I was lost.How in the world was I ever going to turn around a plant when I had no prior experience even running one?I must say that I was very worried.I mean the future of the 300 people that worked there was virtually in my hands.
My mentor, the man who had hired me, gave me a copy of a book and told me all that I needed to know was in this book.The name of that book was The Goal and boy could I ever relate to the central character in that book.I remember leaving work early that day and staying up all night reading the entire book.The next day I ordered copies of it for my entire staff and when it arrived I mandated that they read it that same day and night.But we didn’t stop there.We had daily discussions of its contents and how the lessons we learned could be applied to our plant.It was then that the idea of integrating TOC, Lean and Six Sigma hit me like a ton of bricks.The short version of this story was that we successfully turned our plant around and we did it in months, not years.In fact, our plant became the model for our company.
Since that experience, I’ve had the opportunity to apply this integrated improvement methodology to many companies and each time it has worked so well.In 2009 I was fortunate to be able to have a book published on this integration.Since that experience, I’ve continued learning about all that TOC has to offer and believe me, it is substantial.In 2008 I took a job with a Maintenance, Repair and Overhaul (MRO) company that repaired and maintained helicopters for the US Army.I had no prior experience in an MRO environment, but it was clear to me that it didn’t matter.The principles, tools and techniques are universal.Quite simply, if there’s a process, it can be improved and done so rapidly!That’s one of the cool things about TOC…..it provides the opportunity to realize significant bottom line improvement in very short order….especially when you combine the power of Lean and Six Sigma with TOC.
This integrated methodology works equally well in a hospital environment, an MRO environment or a manufacturing environment……any environment.The reason it works so well is actually quite simple.Rather than selecting local improvement projects like many people do with Lean and Six Sigma, TOC teaches you to look at the total system.In every system there is a constraint that limits your ability to produce product at the rate required, so locating that constraint and then focusing your improvements there, delivers improvement to the total system.This integrated methodology delivers much more rapid bottom line improvement than any other approach.
I’ve been at this for quite a few years now and it has never failed me.So if you’re struggling to achieve the bottom line improvement that the stakeholders are looking for, try this method.I promise you that you won’t be sorry you did.
Yesterday I posted a blog about my new book being delayed to the customers who ordered it. The good news is, the problem has been found and the books will not be significantly delayed. So what happened? Coincidentally (I think), in the afternoon after the blog was posted, I received an email from my publisher apologizing and attempting to explain the reason why. In my publishers own words, "Our printer shipped the wrong books to our warehouse. The outside of the boxes have the correct bar code and ISBN number, but the books inside were for another publisher. Some of those books were sent to Amazon and we are straightening it out. Customers will not get the wrong book because they match orders with ISBN's so Amazon will return those books to us. We have located your books and they are being redirected to our warehouse where the orders will be expedited. It took me a while to figure out what was going on. I couldn't give you any info because I didn't have it - and was completely baffled and confused as to how this could happen....nothing like this has ever happened before. I am so sorry. I will keep you posted and please know that this is being straightened out."
Needless to say, I felt much better and sent a thank you email to my publisher for finding out what had happened and taking actions to correct the problem. So if you were the publisher, in this case, is this the end of your actions? I mean you solved the problem....right? Or did you? If I'm the publisher, the actions taken so far simply fall under the heading of corrective action...don't they? Isn't there another side to this dilemma which, of course, involves a complete root cause analysis to determine why this happened and then to determine how to prevent a recurrence. Isn't that what great companies do? My belief is that, if it truly has never happened before as my publisher stated, then something in their printing and delivery process changed and unless and until they identify the source of the change, this same scenario will happen again. Not "might happen," it will happen!
If you stop and think about problems of this nature, I refer to them as "change related problems" simply because according to the publisher, this event has never occurred before. If it were me, there are probably two tools that I would use in the next step of this investigation. The first tool is a causal chain analysis, often referred to as a why-why analysis or the 5-whys. I've used this many times and it's always worked for me. Here's an example of one I used to determine why a cotter pin hole was off location:
Working from right to left, I continue asking the question "Why?" until I arrive at the most probably root cause. The other tool that I would be using would be the Process Failure Mode and Effect's Analysis (PFMEA). The PFMEA is an incredible tool which can be used to analyze existing processes to identify potential problems. Obviously the FMEA is best used in the design stage of a process, but since this process already existed, I would use this tool to scrutinize the existing process to look for other issues that could result in the same outcome......late deliveries.
The point of this posting is that if you simply stop at the corrective action stage of a problem, you're missing a golden opportunity to improve and avoid the same or different problems.
First, I want to thank everyone for the amazing number of hits on my blog for the past two postings on NOVACES’ SystemCPI.The response to these two postings was absolutely phenomenal.It’s made me realize how interested the reader base is with respect to continuous process improvement methods.After all, that’s the purpose of this blog.
Secondly, for everyone who has purchased Bruce and my new book, Epiphanized: Integrating Theory of Constraints, Lean and Six Sigma, you have probably received a notice from Amazon regarding a new delivery date range.I was one of the first to submit an order and the original ship date was listed as February 2nd to 6th.Yesterday I received a notice that the new date range was February 24th to March 14th.I want to apologize for this delay and I wish I had a good explanation for this slip in shipping dates, but frankly, I don’t.I believe that the problem manifests itself at the publisher, but I have been unable to get any answers.The notice told me that I had to open up my own order and confirm that this date was acceptable and if I didn’t, the order would be canceled.I hope everyone will do that, but I also recognize that some won’t.
The feelings I had when I received this notice ranged from skepticism and disbelief to irritation and anger.After all, I was promised one date and then as this date passed a new date was given to me.As an author, I am supposed to receive a number of free books and I had made promises to give some of these “freebies” to people I know.I hate letting people down, but in this case I had no control of the outcome. It still infuriated me that I had made a promise which I now could not deliver.
Last night when I went to bed I laid there thinking about this dilemma and how I felt.This sort of thing doesn’t happen often, but when it does it becomes personal, or at least it does for me.Aren’t my feelings the same as the customers we all serve?If your company is a manufacturer of some kind of product, the scheduled delivery date is what your customers count on and when you fail to deliver on that date, your customers have the same feelings that I experienced with my book (and probably many of you who ordered a copy).The fact that this announcement from Amazon caught me completely off guard only heightened my anxiety.And when there was no explanation for the delay, I began to wonder what might have caused it.
Of course, being the eternal optimist that I am, I optimistically thought that demand was higher than anticipated and there was a shortage of first print editions to deliver to customers.Amazon publishes a ranking of books for different categories of books, so I checked these rankings and found very positive rankings.Our book was ranked number 8 in the management category, so excessive sales must be the reason for the delay.But then the pessimistic side of me took over and I thought maybe there were printing problems at the publisher.Attempts to find the answer from my publisher proved fruitless, so I contacted the distributor (Amazon) and was informed that their purchase order hadn’t been filled.Good suppliers keep their customers informed every step of the way and in the case of my publisher, this didn’t happen.It’s much better to find out in advance if there are distribution problems, then it is to find out after the delivery date has passed.
I’m telling you about this to reinforce the need to stay in touch with your customers when a similar situation arises with your products (or your services if you’re a service provider).Failure to deliver on your promised due date creates feelings of mistrust and misgivings relative to future business which linger in your customer’s minds.I absolutely believe that current delivery performance dictates futures sales opportunities, so focus on them.In past blog postings I’ve given you methods and tools that result in enhanced performance, but the single most important concept that I’ve given to you is the existence of a system constraint.Constraints control throughput and having enough throughput is essential to meeting your customer’s promised delivery dates.
If you correctly apply Goldratt’s five focusing steps, most of the time you will deliver on time.Think about these five steps and how they might apply to your company:
1.Identify the system constraint.What part of your process controls your throughput?
2.Decide how to exploit the system constraint.Once you’ve identified the system constraint, focus your improvement efforts (e.g. Lean and Six Sigma) on the system constraint.
3.Subordinate everything else to the above decision. – Don’t ever let your non-constraints outpace your system constraint.
4.If necessary, elevate the system constraint, but don’t let inertia cause a new constraint. – Sometimes you have to spend money to correct the system constraint, but most of the time Steps 1-3 will get you there without spending money.
5.Return to Step 1 – Once the system constraint has been broken, a new one will automatically take its place.
If my publisher was following these five steps, I doubt that books would be delivered late.And it’s amazing to me that since this publisher published all of Goldratt’s books, they should understand constraints management.Again, I apologize to everyone who ordered our new book and now finds an email message telling you that the promised delivery date has been missed….not by a few days, but by several weeks.
The response to my last blog posting about NOVACES was so strong, that I decided to post the second half of this series today rather than waiting.In my last posting, I set the stage for the introduction of NOVACES’ SystemCPI and in this posting I’ll deliver what it is and how it works from a high level.As I said in my last posting, I encourage everyone to visit our website so that you can see just how good this new company I now call home really is.The website again is: http://www.novaces.com/.
Each of the methods incorporated into SystemCPI has complementary features. Since not every problem is a nail, a hammer is not appropriate for all problems. Thus, the approach leads the project team to the most effective tool for a given situation. In so doing, it simplifies the selection from the array of SystemCPI tools, including Theory of Constraints and its thinking processes (a breakthrough methodology to identify and manage a system’s constraints) and Lean (a systematic approach to eliminate waste) and Six Sigma (a rigorous, data-driven process to eliminate defects).
The architecture of success
SystemCPI is comprised of four deployment phases consisting of the most effective approaches in industry today. Importantly, it recognizes organization-specific needs and preferences and it is scalable for any organization size. It can work for a small organization, a single business unit, or a large organization with multiple locations. The result is a highly structured approach that provides the systems perspective needed to focus improvements where they are most needed to produce the best returns at the enterprise level.
SystemCPI helps map the alignment of a deployment with an enterprise’s strategic objectives, while addressing two of the primary reasons for deployment failure: project selection and leadership engagement. To ensure a complete project selection process, the methodology identifies improvement opportunities using a triadic approach of System Constraint Analysis, SystemVSASM and Strategic Gap Analysis. A change readiness assessment is also conducted during this phase.
These first steps are critical to overall deployment success. This comprehensive approach establishes an enterprise’s needs up front, thus ensuring that process improvement resources are directed at projects with the biggest global impact on competitiveness and financial performance. The approach drives leadership engagement while mapping the interdependencies and constraints of the organization. And only after this phase has been completed is the applicable training of CPI practitioners conducted.
In the beginning is the end
Our CPI Maturity Model is the result of systematic applications in wide-ranging deployments.The exclusive 4X4 CPI Assessment measures progress throughout the SystemCPI stages, correlating the organization’s progress towards CPI self-sufficiency. The completion of the phase deliverables establishes benchmarks for CPI maturity. The critical deliverables are delineated in the maturity model within their respective phase. The critical deliverables are delineated in the maturity model within their respective phase (please see chart on the next page).
Start with what you know and then ask questions
We use the Theory of Constraints logical thinking process to clearly define the goal of a system, identify the gaps to reach the goal, and map out the actions required to close the gaps. By using cause and effect logic, leaders get a clear picture of what they want from the system under consideration. Further, they can identify the gaps between what is wanted and where they are today. During this step, root causes of the gaps and constraints are identified and solutions are developed to overcome them.
The improvement opportunities identified in the Assess Phase are prioritized based on organizational impact and resource availability. A deployment plan is developed that details the way forward, identifying improvement opportunities, communication and training plans, as well as metrics to measure the overall success of the deployment. Team members are identified and delivery of just-in-time training for the selected improvement opportunities is accomplished.
This phase is about applying appropriate process improvement tools and getting the desired results.SystemCPI helps to identify the appropriate tool sets and methodologies to be used and in the right sequence. These include Quick Hit Improvements, Rapid Improvement Workshops, Lean Six Sigma DMAIC Projects, and Constraints Management. Our roadmap also prompts examinations of past and ongoing process improvement projects to determine if any of those projects – their methods, findings, recommendations, results, etc. – can be leveraged in the new project.
As an organization implements CPI methods, sustaining the gains is always challenging.Indeed, without careful oversight an enterprise can backslide into its old ways of working. Thus, SystemCPI includes action plans to evaluate the status of the CPI deployment, make necessary revisions as the needs of the organization change and weave the program into the organization’s management infrastructure. Our roadmap also guides the identification of project replication opportunities, a key to maximizing return on investment.
So much to do, so little time
Responding to the urgent needs of some organizations, we have fashioned our roadmap into a SystemCPI JumpStartSM program that compresses the timeline from kickoff through development of the deployment plan. This fast-track approach requires moderate to high level of access to an organization’s executive leadership in the beginning. Yet, to facilitate this accelerated implementation the program includes action steps that quickly navigate common process improvement roadblocks and acquire the information needed on the continuous journey to operational excellence.
JumpStart efforts can be accomplished in two or three weeks. They can be conducted in consecutive weeks, or with a short break between the weeks. Despite the up-tempo deployment, the program is ideal for an enterprise needing to quickly implement or refine a CPI strategy with the necessary discipline to formalize purpose, direction, and roles.
The future never just happens
Rather than applying CPI methods in isolation, or applying a one-size-fits-all deployment, SystemCPI provides a flexible yet structured approach that recognizes the unique needs of each organization and uses an integrated approach to apply the right tools to the right situation.Lean, Six Sigma and Theory of Constraints produce great results in and of themselves, but used together they are more valuable. One is never a substitute for the other and they align well to generate improved competiveness and financial results.
A couple of years ago, I was in Utah speaking at the CPI Symposium that I just recently spoke about in my blog.I was there to speak about a success story at Fort Rucker on helicopter scheduled maintenance as well as to receive that year’s Bob Fox award.While I was there, I met quite a few people, but one man in particular stood out.This man’s name is Bahadir Inozu who is the CEO of a company called NOVACES.I hadn’t ever heard of this company, but after listening to his presentation, I was very impressed.We chatted during the symposium and exchanged business cards.That chance meeting changed my life because I am now employed by NOVACES and I couldn’t be happier.
In my next several blog postings, I want to share this great young company’s improvement methodology called SystemCPI. If what I’m posting on my blog sounds like a sales pitch for NOVACES, it’s because it most certainly is.For the past few years I had been searching for a company, or should I say a continuous improvement consulting company, that was completely in sync with the way I approached continuous improvement.NOVACES is that company and I encourage all of my readers to visit NOVACES’ website and see for yourselves what a great company it is.With that said, let’s take a look at some background information before we dive into SystemCPI.Some of what I’m posting here is material directly on NOVACES’ website at www.novaces.com, but to get the full story on NOVACES, visit the website. And don't forget to look at the various white papers, case studies, blog postings and training opportunities available for your company.
Let me also say that NOVACES is a premier implementer of today’s most powerful process improvement methodologies that strengthen operational capabilities and financial performance. NOVACES delivers Lean, Six Sigma, and Theory of Constraints consulting and training to clients in the defense, healthcare, maritime, finance and service industries. We are dedicated to advancing the science of process improvement and leveraging research to provide the most effective solutions in the market.So now let’s move on to SystemCPI.
Answering the question “how to”
As I’ve stated numerous times before, many companies implementing Lean and Six Sigma have experienced some very impressive results only to have difficulty sustaining their results.Some have difficulty keeping their programs up to speed with the pace of change and the needs of the business. Others simply struggle with harnessing the methodologies as an integrated approach to eliminate waste and variability, concluding that the approach cannot help them. The reality is that the success stories of the past several decades across virtually all industries simply do not support this conclusion.
The conventional Lean Six Sigma deployment approach has been lacking a workable framework to dependably address the needs of the overall enterprise and to deliver them quickly and reliably. In fact, this methodology typically focuses on local improvement projects without considering the overall improvement of the system. Businesses always want the most improvement for the least investment.
These issues present a challenge to companies whether they are at the beginning of the journey to process excellence or needing to refresh a current program.It begs the question of how companies can take continuous process improvement to a higher level and closer to the promise of a true overall business improvement methodology. NOVACES points out that the ideal approach needs to solve five overarching issues in a deployment that:
·Scales to any size organization and aligns easily to needs.
·Shortens the traditional execution time from adoption to results.
·Optimizes the utilization of resources required to achieve the desired goals.
·Breaks organizational policy constraints and maximizes organizational efficiency.
·Sustains the gains and defines a path to self-sufficiency.
With these requirements in mind, NOVACES created a comprehensive deployment methodology called SystemCPI. Several years in development and the result of real world applications, it is a rigorous, structured methodology that can be applied at any stage in an organization’s continuous process improvement (CPI) journey. It is equally applicable for a green field initiative or a mature program. Importantly, this seamless roadmap was designed to mitigate the emphasis on local improvements that can compromise an entire system.In addition, this method works equally well no matter what the industry setting is.
SystemCPI transcends the barriers that impede traditional approaches. It is a magnet for executive leadership and transitions to the operational level. It can jumpstart a new deployment or invigorate an existing one. At the same time, it addresses a host of implementation issues such as strategic alignment, project selection, and an inability to progress towards self-sufficiency.
War and peace among methodologies
Today’s leading CPI methods are Lean, Six Sigma, and Theory of Constraints. While these methodologies have previously been associated with manufacturing and the supply chain, today they are increasingly applied successfully to services such as healthcare, banking, and government. In the late 1990s, Lean, Six Sigma and Theory of Constraints were in an active state of contention. However, as success stories emerge from the integration of these methodologies and their toolsets, there is peace spreading among the factions.
In my next posting, we'll lay out the structured approach that SystemCPI presents and then explain each step in more detail.
First I want to thank everyone for a record-setting January in terms of page views of this blog. I am humbled by the response we are getting, so thank you for your interest. As many of you who follow this blog on a regular basis, Bruce Nelson's and my book, Epiphanized: Integrating Theory of Constraints, Lean and Six Sigma hit the streets on Monday and all signs point to brisk sales, so we want to thank everyone who purchased a copy. Bruce and I hope it's an enjoyable read for everyone and we wanted to let you know that we're working on a sequel.
Some of you may know that on February 24th and 25th I'll be speaking at a CPI Symposium at Cal State Northridge. This symposium is primarily focused on TLS, but there will also be presentations on Critical Chain Project Management (CCPM) as well as the culture side of continuous improvement. Some top-of-the-line speakers will be presenting so I encourage everyone to attend. For those of you not familiar with this symposium which is in its 7th year, here is a link that will take you to it:
I am honored to be a part of this symposium and will be working side-by-side with one of my heroes in the TOC world, Bob Fox. In the early days of TOC, Bob worked with the late Dr. Eli Goldratt and together they penned one of the classic TOC books, The Race. If you haven't ever read it, I highly recommend it. Most recently Bob collaborated with Reza (Russ) Pirasteh on a book entitled, Profitability With No Boundaries and it too is an excellent read. Russ is as responsible for the TLS movement around the world as anyone when in 2006 he reported on his now quite famous study of 21 electronics plants studying Lean, Six Sigma and TLS in isolation. In his landmark study, TLS, although only implemented in 6 of the plants. accounted for 89% of the financial gains! I highly recommend Bob and Russ's book! I will also be working closely with Bob Fox's son, Kevin who is becoming world-renowned, especially for his knowledge and work on CCPM.
This symposium should be a wonderful experience for all of the attendees and when you leave it, it is our hope that you will have a new understanding on how to implement a continuous improvement effort in your company that will surpass anything you've done before. There will be workshops, case studies and probably Q & A sessions, so something for everyone. Again, I encourage everyone to attend and to let your friends, especially your west coast friends know about it.
My oldest son Robert (or as I call him, Rob) put me onto a new book by Malcolm Gladwell entitled, What the Dog Saw.Strange title isn’t it…..at least until you read the book that is.Malcolm Gladwell has a writing style unlike any other author I’ve ever had the pleasure of reading.In the preface to his newest book, he talks about how he really never wanted to be a writer…he wanted to be a lawyer and then in his last year in college he decided he wanted to be in advertising.He applied to 18 different advertising agencies in the city of Toronto and for a while he had all 18 rejection letters taped neatly in a row on the wall of his office.Gladwell thought about graduate school, but his grades weren’t good enough.He then applied for a fellowship to go somewhere exotic for a year, but he was rejected.He tells us that writing was the thing he ended up doing by default simply because it took him forever to realize that writing could be a job.He thought that jobs were things that were serious and daunting…writing was fun.
Gladwell explains that along the way, writing has never ceased to be fun and he hopes that buoyant spirit is evident in the pieces he writes.Nothing infuriates Gladwell more than someone who reads something of his or anyone else’s and says, angrily, “I don’t buy it.”He asks, “Why are they angry?”He explains that good writing does not succeed or fail on the strength of its ability to persuade.It succeeds or fails on the strength of its ability to engage you, to make you think, to give you a glimpse into someone else’s head – even if in the end you conclude that someone else’s head is not a place you’d really like to be.
Like Malcolm Gladwell, this blog is not intended persuade you, it’s intended to at least make you pause and think about what I’ve written and make you want to read more.Bruce and my sole goal in writing these blog postings and our new book Epiphanized that was released this week, was not intended to persuade you, but rather to share some of our successes (and failures) that we’ve had along the way.It is our hope that business leaders will at least think about and try some of the things we’ve have written about.If we make you think….and then try….then we’ve succeeded.
The real message in this new Gladwell book and the genesis of its title, What the Dog Saw, is in an article he includes in this book about Cesar Millan, the so-called dog whisperer.For those of you not familiar with this character, Milan can calm the angriest and most troubled of dogs with the touch of his hand.Gladwell originally asked the question, “What goes on inside Millan’s head as he does that?” which is what inspired Gladwell to write the piece.But it seems that after Gladwell got halfway through his story, he realized there was an even better question:When Millan performs his calming magic, what goes on inside the dog’s head?Or as Gladwell says, that’s what we really want to know – what the dog saw.
After I read those lines I began thinking about how that same question applies to the things that many of us attempt to do, continually improve processes and systems.It’s not necessarily important what we see, it’s what our clients and bosses see that’s really what we want to know.When we go into companies or if we’re asked to fix things in our own companies, we usually investigate and find obvious things that must have been there for a while and we wonder to ourselves, why haven’t they already been fixed?We all delve into the issues and we can usually always find the source(s) of the problems and then we fix them.But the question I ask myself is, “What did I see compared to what the process owners saw?”Or better yet, “Why do we see things differently than the process owners”?Shouldn’t we all be seeing the same things?
I’ve given this a considerable amount of thought and I’ve come to a conclusion.I’ve written quite a bit about the need to focus your improvement efforts on the system constraint.I’ve talked quite a bit about the need to do things that result in systems improvement rather than things that result in localized improvement.My conclusion is, this message must be counterintuitive and to some people, it’s illogical.Most people are simply taught the opposite of what I and many of you preach.Most people are taught that things like high operator efficiency is a good thing and that if they could just increase it everywhere, then the entire process is better off.In my last four postings, the subject was performance metrics and what Bruce and I tried to make you think about was the fallacy or erroneous belief that this metric, efficiency, motivates the right behaviors when in fact, it motivates the polar opposite behaviors that inhibit optimal profitability.
Like I said earlier, we’re not trying to persuade you, just trying to make you think about what we’ve written and if somewhere along the way you become epiphanized, then we have succeeded.