Sunday, October 6, 2013

Focus and Leverage Part 254

Today’s posting is a continuation of my series on integrating the Theory of Constraints, Lean and Six Sigma which creates what I believe is the most powerful and dynamic improvement methodology that exists today.

The most profound difference between this methodology, and one that promotes the use of localized improvement projects, is that this integration promotes and supports system-wide improvements.  The over-arching philosophy of this integrated model is that improvements within the constraint offers the potential for the largest payback because of the system-wide improvements that we realize.  This method does not support localized improvements in non-constraints unless they are negatively impacting products (i.e. via scrap or rework) coming to the constraint (upstream non-constraints) or products that have been released by the constraint (downstream non-constraints).

The Theory of Constraints (TOC), developed and introduced by the late Dr. Eliyahu Goldratt, provides us with the needed focus by employing five simple focusing steps as follows:

1.  Identify the system constraint or that part of the system that is preventing us from moving closer to our goal.  The goal could be making more money through improved throughput or some other abstract organizational entity.

2.  Decide how to exploit the system constraint by focusing and employing the tools of Lean and Six Sigma to simultaneously reduce waste and variation to improve flow and quality.

3.  Subordinate everything else to the above decision by not pushing more work into the system until it is ready to receive more.  This step is often the most difficult one for organizations to embrace, but it is the key to improved flow.

4.  If necessary, elevate the system’s constraint.  If after the first three steps we are still not satisfying customer demand requirements, then we may have to spend money either by adding more labor or equipment within the process being improved.  In my experience, most of the time we usually don’t need to execute this step.

5.  If in the previous steps the constraint has been broken, go back to Step 1, but don’t allow inertia to create a system constraint.  When the current constraint is broken, a new one will appear immediately and our improvement resources must be poised to move to it.  One of the key points in this step is that improvement efforts should never stop.

Our decision on how to exploit the constraint will always involve focusing our Lean and Six Sigma improvement tools and techniques on the constraint to remove waste and variation and to make value flow.  We also are cognizant of the need to never over-produce, so all non-constraint process steps are subordinated to the pace of the constraint.

In my next posting we will lay out my typical approach to improvement efforts and how I use many of the improvement tools and techniques from Lean and Six Sigma to effectuate improvements to processes.
Bob Sproull


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