In my last posting I told you that we’ll continue discussing some of the true benefits of integrating TOC, Lean and Six Sigma. I also said that 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. So let's take a look at both Lean and Six Sigma as part of our TLS model.
In my estimation, the primary purpose of Lean is to lay out the step-by-step configuration of processes that we are trying to improve. There are several tools in the Lean tool box to do this such as the Value Stream Map, the Process Map, etc. Once we've completed this process lay-out, Lean teaches us to separate each of the steps into three distinct categories as follows:
- Is the step value-added?
- Is the step non-value-added?
- Is the step non-value-added, but necessary?
In some corners, value is defined if three conditions exist:
- Does it move the "thing" through the process and change it?
- Does the customer see the step as something worth paying for?
- Is the step done right the first time?
Lean would suppose that we would go through all of the steps in the process and remove all of the non-value-added steps to essentially streamline the process. I don't follow this approach because I focus my efforts on the constraint and not the entire process in question. I realize that the Lean zealots of the world will disagree with me on this point, but I do have my reasons which I'll explain a bit later. The primary reason that I map the process is to help me identify the system constraint or the bottleneck operation.
Six Sigma is a very important methodology simply because variation causes uncertainty and we always want to reduce the amount of uncertainty. Like Lean, there are many valuable tools within the Six Sigma tool kit that I use. One of the tools I love is the Causal Chain because it helps me discover the root cause of problems which could negatively impact the flow of products into and out of the constraint operation.
So why do I advocate integrating these three distinctly different methodologies? My belief is that if you want rapid improvement, then focus your improvement efforts on the leverage point which is the system constraint. Why do I believe this? Because I believe that the key to profitability improvement is done so by improving the throughput of the process.
In my next posting, I'm going to discuss why improving throughput is the best way to improve profitability. While cost accounting teaches us that the best pathway to improving profitability is through saving money, I believe that the best pathway is by making money. You might say, aren't these the same? In my next posting I'll show you why these two approaches are totally different.