- They must have high on-time delivery rates and because it’s shaded in red, this probably isn’t happening or at least not to the level to highly satisfy their customers. The team further stated that in order to have high on-time delivery rates, they must have buffer management in place and functioning.
- They must also have excellent quality and because this entity is shaded in green, the team believes that their quality is excellent due to their excellent quality systems.
- Finally, they must have a high perceived value by the customer and since it’s shaded in yellow, the team doesn’t believe this is the case. The team believes that this is being driven primarily by the price of their products, but it’s probably also due to their poor on-time delivery rates.
1. Implement TOC’s Drum Buffer Rope. This project will impact two CSFs, Highly Satisfied Customers by improving the on-time delivery rate and Throughput High and Growing by synchronizing work to meet demand.
2. Implement an integrated Lean, Six Sigma and Constraints Management, but only at the system constraint first. In so doing, this will automatically drive throughput higher and will continue to do so until the constraint moves. When it does, we focus our improvement on it.
3. Implement Active Listening. Active listening is the process of soliciting and implementing solutions provided by the subject matter experts, the people building the product or delivering the service. In my experience, this will also have an immediate, positive impact on the morale of the work force.
4. Implement Dynamic Replenishment. One of the keys to profitability is to reduce inventory and avoid part’s stock-outs and by implementing a replenishment system based upon usage rather than a forecast. In so doing, two dramatic improvements will take place. Overall inventory will decrease by at least 40% and part’s stock-outs will virtually disappear. These two benefits occur because part’s replenishment will now be based upon actual consumption and not a forecast.
Notice also that the direction of the arrows has been reversed. When we created the Goal Tree, we did so from the top to the bottom, but when we identify the required improvement actions, the effects move from the bottom to the top of the hierarchy. That is, when the identified improvement actions are implemented, the result will be improvement to the upper level NC’s, CSF’s and ultimately the organization’s Goal.