Saturday, March 1, 2014

Focus and Leverage Part 315

In this posting we will discuss Step 3 of the Ultimate Improvement Cycle, Improve.  This step is where the rubber meets the road so to speak.  To make it a bit easier for you to follow, let's repost the two UIC graphics I had posted on Focus and Leverage Parts 312 and 313.


Step 3: Improve

To this point, you have dealt only with your constraint operation, but you cannot forget about your non-constraint operations. Because of what you know about the Theory of Constraints, you know that you must not continue producing product at a rate that exceeds your constraint operation. In step 3a, you plan how to subordinate non-constraints to the current constraint, and in so doing, you must now effectively slow down, limiting your non-constraint operation’s output to the same rate as your constraint operation.

Otherwise, you will continue building inventory in front of your constraint, beyond your safety buffer. Subordinate in its simplest form means that you will produce product at the same rate as the constraint operation, no slower or faster.  According to Debra Smith, “Mastering step three, subordination, is the key to succeeding with TOC. Mastery of step three is dependent on a methodology of aligning measures, performance objectives, strategies, and policies to support maximizing return on investment. Return on investment is centered on understanding the interdependencies of the constraining resources and the rest of the organization. I could not agree more with Smith, as subordination is beyond a doubt one of the keys to the success of any TOC-based improvement initiative.

Like step 2a, step 3a of the UIC is a planning step, in that you must evaluate the nonconstraints and look for opportunities where you might be able to offload some of the work from the constraint to one or more of the non-constraints. You will look upstream and downstream for these opportunities, so you must be very thoughtful and methodical as you develop this plan. In doing so, however, you must exercise caution in this step because you must make certain that you do not turn a nonconstraint into a constraint, and you could, if you are not careful. In addition, contrary to what many production managers believe, having a perfectly balanced line (i.e., all cycle times equal) is not necessarily a good thing (see Chapter 9).

In addition, you are attempting to establish one-piece flow within your process to ensure the steady flow of work into and out of the constraint. Because you have already implemented work cells in step 2b, in essence you may have already begun using elementary one-piece flow, but in this step, you formalize it. Your plan will include an analysis of current constraint and non-constraint cycles and processing times, telling you where you might be able to move work away from the constraint; how best to move the work; how best to create flow; how to establish a constraint buffer, an assembly buffer, and a finished goods buffer as well as a buffer replenishment system; what your resource requirements are; how to address your training needs; and how to best time all of the proposed moves.

At this point, you might be wondering why you did not perform this step of the cycle sooner. There are two reasons. First, my belief is that because you know that the capacity of the constraint operation will improve as a result of your waste and variation reduction actions completed thus far, you should wait until your new constraint capacity and processing time are known. The second reason is that the next step in the improvement cycle could radically change the time in the constraint, and hence the capacity.

In step 3b, you will focus your efforts on reducing processing time and improving flow by executing part of the plan you developed in step 3a. You have analyzed your upstream and downstream nonconstraint workloads; decided what work, if any, can be safely moved away from the constraint operation; developed or proposed redesigned process steps to accommodate the unloading of constraint work; estimated the new processing times for both non-constraint and constraint operations; and estimated the impact on flow and throughput. If you did your homework correctly, you should breeze through this step and move on to step 3c. Remember, the planning for this step had already been completed in step 3a.

In step 3c you will optimize the constraint, assembly, and finished product buffer and refine your DBR scheduling system based on any problems you may have encountered in step 2b. You will analyze your new data on compliance to schedule and, if need be, make any corrections necessary to improve compliance. The buffer in front of the constraint operation, sometimes referred to as a WIP cap, is your protection for the constraint operation in the event that one of your upstream non-constraints could unexpectedly have downtime. Keep in mind that your buffer is not necessarily product. In fact, most of the time your buffer will simply be a measure of time—that is, instead of having excess product available, your production schedule will dictate when and how many parts to produce so that you never starve your constraint.

The assembly buffer is a buffer of nonconstraint parts in front of assembly, assuming the constraint part is required in assembly. The finished product buffer is your protection for on-time delivery to customers. In this step, you need to recalculate the size of your protective buffers, taking into account the speed of the upstream nonconstraints, the historical downtime associated with the non-constraint operation, buffer penetration rate, and so on.

The important thing to keep in mind is that your non-constraints have sprint capacity, that is, the capacity to produce product at faster rates than your constraint operation; so if an upstream non-constraint operation experiences downtime for some reason, when it begins producing again, it should still have the ability to produce product at a fast enough rate to resupply the constraint buffer before the constraint buffer runs dry. Assuming you calculated the size of the buffers correctly and designed the DBR system correctly, the constraint will be protected from ever sitting idle.

In my next posting, I will discuss the fourth and final step of the Ultimate Improvement Cycle, Control.  In this step we’ll discuss how to “keep” all of the gains you’ve made to this point.

Bob Sproull

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