In my last posting I covered why integrating
the Theory of Constraints, Lean and Six Sigma makes logical sense. In this posting I want to do a follow-up on
why this integration works so well by way of a Goal Tree. Not to confuse this method, in Epiphanized we referred to the Goal Tree
as an Intermediate Objectives Map, but since then the man who popularized this
tool, H. William Dettmer, has changed its name to a Goal Tree. In this posting I will continue with Appendix
I, written by Bruce Nelson.
TLS effectively combines all three
methodologies into a single improvement consortium, and it allows you to use
the best practices of each to solve most of the problems involved with
implementing improvements. But exactly
how does this integration of methodologies work?
The above
figure provides the comprehensive answer.
Using the Goal Tree you can define each of these methods as being
critical. Each supports the other in
being able to move to the next level, which is the creation of the Optimum
Process Improvement Methodology (OPIM).
Each method, if used in isolation, will fall short of the optimum
method. But when these methods are
combined, the optimum method can be realized.
Having just one method or even two methods is not sufficient to complete
the journey to the Optimum Process Improvement Method. All three working in tandem provide the
optimum approach.
The Goal Tree
succinctly defines the Critical Success Factors (CSFs) that must be in place to
achieve the Optimum Process Improvement Methodology. The CSFs are supported by the Necessary
Conditions (NCs) of the need for an improvement-focusing strategy, a
waste-reduction strategy and a variation-reduction strategy. The first layer of Necessary Conditions
translates into the need to have a working knowledge of the Theory of
Constraints, Lean and Six Sigma. TOC
provides the methods used to focus your improvement efforts (the constraint)
while Lean and Six Sigma, with their many tools and techniques, can be used to
reduce waste and variation at the constraint and eventually in the system, as
the constraint rolls from one location to another.
Russ Pirasteh
(1) and Bob Fox have published a wonderful new book on the integration of TOC,
Lean and Six Sigma entitled Profitability
With No Boundaries. Pirasteh and Fox
outline the results of a significant study (the first of its kind) aimed at
providing a head-to-head comparison of Lean, Six Sigma and an integrated
TOC-Lean-Six Sigma (iTLS) methodology.
The response variable for the individual studies conducted during this
project was a measurement of the financial benefits gained. It is the only documented study that
demonstrates the potential power of this TLS integration. The two-and-a-half-year study was performed
at the facilities of a global electronics manufacturer with twenty-one
different plants participating. In order
to negate potential cultural effects, all twenty-one facilities were located
within the U.S. It was a double-blind
study with none of the team leaders knowing they were participants.
The authors
used a variety of statistical tools to analyze the data, with the primary
response variable being a coded, cost-accounting based metric tied directly to
cost savings. Their null hypothesis was
a straightforward comparison of means whereby µ1 = µ2 = µ3 corresponding to the
average savings for Lean equal to the average savings for Six Sigma equal to
the average savings for an integrated TOC, Lean and Six Sigma (iTLS). The alternative hypothesis was that the three
averages were not equal (µ1 ≠ µ2 ≠ µ3).
The authors first used One-Way ANOVA to demonstrate that there was no
statistical difference between Lean and Six Sigma (µ1 = µ2) results. Since statistically, the Lean and Six Sigma
results appeared to come from the same population, they combined both sets of
results and compared the combined results to the iTLS results. The results of this comparison clearly
indicated that there was a statistically significant difference between Lean,
Six Sigma and iTLS. In fact, the savings
contribution from iTLS accounted for 89 percent of the total savings. The inescapable conclusion from this study
was that the interactive effects of iTLS were superior to the individual
results obtained from using either Lean or Six Sigma.
For the last
decade we (Bruce and I) have been using a comparable improvement methodology,
first reported in the book, The Ultimate
Improvement Cycle (2) and we have achieved analogous results. Although our step-by-step method, or pathway,
is somewhat different than Pirasteh and Fox method, the basic beliefs are
exactly the same. Significant bottom-line
improvement can be achieved when using an integrated approach of TOC, Lean and
Six Sigma, as compared to using individual TOC, Lean, Six Sigma or Lean-Six
Sigma methodologies.
If you are
truly interested in improving what your company does and how they do it, then
arming yourself with the concepts of the TLS methodology should certainly point
you in the right direction. The TLS approach
is most likely not the end point in this game, but rather just a step to
achieve the next level of understanding.
There will be more and possibly even better methods proposed for future
use. But as it stands today, understanding
and implementing TLS carries the potential to lift your organization to heights
not even dreamed a few years ago. Good
luck on your adventure.
In my next
posting we will begin looking at some of the TOC tools used such as Drum Buffer
Rope (DBR), Critical Chain Project Management (CCPM), Dynamic Replenishment,
etc. to provide a more comprehensive view of how TOC can be used to drive
profitability higher and higher.
Bob Sproull
Footnotes:
(1) Reza (Russ) M. Pirasteh and Robert E. Fox, Profitability With No Boundaries,
Milwaukee: ASQ Quality Press, 2010.
(2) Sproull, Robert A. The Ultimate Improvement Cycle.
Boca Raton: CRC Press 2009
No comments:
Post a Comment