Today’s
posting is the start of a series of posts aimed at how the integrated Theory of
Constraints, Lean and Six Sigma (TLS) is actually intended to work. In doing so, I want to start with a basic
understanding of the components of TLS which will set the stage for a more
in-depth look at TLS. In today’s posting
I will start with the Theory of Constraints by laying out the basic concept of
what a constraint is and then end it with Goldratt’s classic Five Focusing
Steps. For those of you who have read Epiphanized, you will recognize that much
of what I will write is from Appendix 1 that Bruce Nelson crafted so
eloquently.
So
for all of my readers who may not be familiar with what a constraint is, I want
to start with an image that I have used many times in this blog, a piping
system used to deliver water. In the
image below, you will see that there are a series of pipes, all with different
diameters. The water in this system is
fed by gravity and enters through Section A.
The water continues its path through Section B, then C until it finally
exits the system and is collected in the receptacle at the bottom.
In
my training sessions on TOC, I ask my students to tell me what they would do to
increase the water flowing through this system and why they would take their
actions. Invariably, the students always
answer this correction correctly in that it would be necessary to increase the
diameter of Section E. Likewise, they
always explain correctly that the reason behind their proposed solution is
because Section E has the smallest diameter, so unless and until this diameter
is enlarged, it would not be possible to increase the flow of water.
I
then ask the students to answer the following question: Would increasing the diameter of any other
pipe section increase the flow of water through this system? Again, the students always answer this
question with a resounding NO! So as you
can see, the concept of the constraint or bottleneck seems to be intuitive or
maybe a better description is, it’s just common sense. So if this concept is so easy for new
students to grasp, then why is this concept not being practiced in most
companies? Good question.
I
then depict this same piping system with the diameter of Section E enlarged and
ask the students to describe what they now observe within this piping system. As with the first image, most of the students
recognize that Section B is the new constraint or bottleneck. Most come to the conclusion that if we
continue identifying the constraint and fixing it, water flow will continue to
increase. Once again, this concept seems
to be intuitive. So I ask the same
question, if the concept of identifying and “fixing” the constraint is so easy
for students to grasp, then why is it not being practiced in most companies?
After presenting the
piping diagram images to the students, I then show them an image of an
imaginary process used to produce some kind of product such as the image below. Raw materials enter this process into Step 1
and are processed for 1 hours and then passed on to Step 2 where 2 hours later
they are passed onto Step 3 which takes 4 hours to process. At the end of 4 hours, the semi-finished
product is passed onto Set 4 which takes a half hour to process and then exits
the process as a finished product.
The first question I
ask my students is to tell me what the capacity of this process actually
is. Usually there is someone in the
class that gets this question right by stating one product every four
hours. After some discussion as to why
this is the capacity of this process, the class understands that because Step 3
takes four hours to complete its processing time, and because the processing
times for the other three steps are less than four hours, the process is
limited by Step 3.
I then ask the
students to describe to me what must happen if they needed to increase the
output of this process and why they would do so. I remind them of the piping diagram so as to
use it as a reference point. Typically
about half of the class recognizes that Step 3 is the constraint or bottleneck
and that they would have to reduce the time in Step 3 in order to increase the
output of this process.
I then take the
discussion one step further by asking them what would happen if each step was
run at its full capacity, meaning that Step 1 would continue producing at a
rate of one part every hour? Again,
usually half of the class sees that the only thing that would happen is that
the process would become “clogged” with work-in-process (WIP) inventory like
the figure below.
I then ask the students
how they would avoid this WIP explosion and some of the students correctly explain
that they would have to “slow down” the steps in front of the constraint to run
at the same speed as the constraint.
Once there is a discussion about why this must happen, usually all of
the students see this concept. But as
before, if the students understand this concept, then why do most companies
still insist on running all steps in the process at maximum capacity?
To complete this
discussion on the Theory of Constraints, I then present Goldratt’s Five
Focusing Steps or as it is also known, Goldratt’s Process of On-Going
Improvement (POOGI). In reality, the
students have executed the first three steps, by first, identifying the system
constraint, deciding how to exploit the system constraint and then
subordinating everything else to the system constraint. The five steps are outlined below.
The Theory of
Constraints operates under what Goldratt refers to as his Five Focusing Steps:
Step 1: Identify the
system constraint. The constraint is commonly considered anything within a system
that limits the system from achieving higher performance relative to its goal.
Step 2: Decide how to
exploit the System Constraint. Exploitation implies getting more from what you already have. It
requires that you understand why you are currently getting what you are getting,
and what steps are necessary to maximize the throughput of the constraint. How
do you get more from this constraining operation?
Step 3: Subordinate
everything else to the System Constraint. The subordination implies that all
other nonconstraint processes activate to the same level as the constraint. It
seems contrary to popular belief, but sometimes in order to go faster, you have
to go slower.
Step 4: If necessary,
elevate the system constraint. Elevation implies more constraint capacity or resources, if the
market demand on the system still exceeds current capacity. At this point, it
may be required to spend some money to increase throughput—but only during Step
4 and not during Step 2.
Step 5: Return to
step 1. When the constraint has rolled (moved) to a new location in the
system, then go back to Step 1 and follow the sequence again.
So, you may be wondering why these Five Focusing Steps are important
to someone who uses Lean, Six Sigma or the hybrid, Lean-Sigma. The facts are
simple— without the understanding of the global system focus provided by TOC,
many of the Lean and Six Sigma initiatives will fail to deliver significant
bottom line improvement.
In my next posting we’ll continue discussing some of the true
benefits of integrating TOC, Lean and Six Sigma. I’ll lay out the basics of Lean and Six Sigma
and how they fit into the TLS model that Bruce and I have been using for quite
a few years.
Bob Sproull
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