Sunday, June 9, 2013

Focus and Leverage Part 222

I am a member of over 50 groups on LinkedIn, a very popular social media site, and although I enjoy all of them, one group in particular, named TLS, is my favorite.  Not because it’s all about the integration of the Theory of Constraints, Lean and Six Sigma, which I write about often.  It’s because most of the discussions are so animated and full of passion between the group members.  There have been discussions about things like whether the TOC community should consider renaming the Theory of Constraints to something much less academic or less daunting to people unfamiliar with it.  There have even been discussions about what the actual definition of a constraint really is.  And while I have participated in some of these discussions when I have time, for the most part I just lie in the shadows and follow the on-going dialogue about the subject at hand.

Not long ago there was a rather animated exchange about Constraints Management, but rather than participating in this discussion, it was one of the ones that I chose to just follow and absorb the dialogue. Since then, I’ve had some time to give this subject a bit more thought and decided that rather than posting my thoughts on the LinkedIn site, I’ll do it here on my blog. I hope this isn’t a wearisome and tedious series for all of my loyal readers.

Let me start by saying that Constraints Management (CM) is really a product of the Theory of Constraints which Eli Goldratt and Jeff Cox introduced to the world in their early 1980’s breakthrough book, The Goal.  Some of the ideas presented in that first edition weren’t so novel, but most were and were truly innovative.  Goldratt and Cox weaved together principles, tools and techniques in a  fictitious manufacturing plant and did so in a business novel format that captivated and fascinated the early readers and still does so today.  Plant managers from all over the world identified with Alex Rogo, the fictional plant manager in the book, and many said, “Hey, that’s me they’re talking about!”  From this first book, Goldratt went on to write a sequel to The Goal named It’s Not Luck and introduced new principles, tools and techniques all under the umbrella of the Theory of Constraints.

Schragenheim and Dettmer, in their classic book, Manufacturing at Warp Speed (St. Lucie Press, Boca Raton, FL, 2000, Ch. 2) told us that Constraints Management is based upon four basic assumptions relative to how a system functions.

 1.  “Every system has a goal and a finite set of necessary conditions that must be satisfied to achieve that goal.”  What this means is that efforts to improve the system performance will not be as fruitful as they could be unless there is a clear understanding (and consensus) of what the system’s goal and necessary conditions are.
2.  “The sum of the system’s local optima does not equal the global system optimum.”  What this means to me is that the most effective system doesn’t evolve from optimizing the efficiency of each individual part of the system, but rather we must consider all interactions within the system.  In other words, if you are a company that uses efficiency as a primary metric, for example, maximizing the efficiency of each part of the system won’t guarantee maximum system effectiveness.
3.  “Very few variables – maybe only one – limit the performance of a system at any one time.”  When Goldratt and Cox introduced the concept of a constraint, they likened it to a chain which has a weakest link.  Like the chain with a weakest link, systems also have a weakest link that must be identified and exploited before the system will improve.
4.  “All systems are subject to logical cause-and-effect.”  In any system, there are negative symptoms of problems, termed Undesirable Effects (UDE’s, pronounced oodees), that exist within the system.  These UDE’s are linked together in a logical hierarchy of cause-and-effect with the core problem located at or near the bottom of the linkage.  In Constraints Management it is believed that these by solving the core problem, approximately 80 % of these UDE’s will disappear from the system.

These four assumptions form the basis of Constraints Management for me, but what are their implications from a continuous improvement perspective?  In my next posting we'll look at each of these four assumptions in a bit more detail.
Bob Sproull

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