Friday, September 26, 2014

Focus and Leverage Part 377

Yesterday I received an interesting email from one of my blog followers and I want to share my answer with everyone, but please know that I'll get back to my discussion on accounting in my next blog posting.  The follower asked me this question, "In most discussions on the Theory of Constraints, writers use the chain analogy to demonstrate the concept of the system constraint.  Why do you use a piping system to explain the constraint?"  So in today's posting, I want to explain why I switched from the chain analogy to the piping system that I now use.

As the reader stated, most people use the concept of a chain having a weakest length to demonstrate that focusing improvement on any other link of the chain than the weakest one will not guarantee that the chain will be stronger.  The point being that only by strengthening the weakest link will the chain be stronger and therefore be able to handle a heavier load.  I thought about this way back when and realized that in organizations, especially those that manufacture products, what we're really trying to explain is how do we get better flow and therefore, more throughput?  And while the chain concept is an excellent description of why it's important to strengthen the weakest part of the system, the chain is not about flow.  For those of you who may not be familiar with the Theory of Constraints, Dr. Goldratt explained that the process of ongoing improvement (POOGI) revolves around 5 focusing steps which are:
  1. Identify the system constraint (the chain's weakest link)
  2. Decide how to exploit the system constraint (how do we make the weakest link stronger?)
  3. Subordinate everything else to the above decision (don't work on strengthening the other links)
  4. If necessary, elevate the system constraint (sometimes after completing steps 1 and 2 you may have to spend money to strengthen the weakest link)
  5. When the constraint is broken, return to Step 1, but don't let inertia create a new system constraint (once the weakest link has been strengthened, there will be a new weakest link)
So why do I use the piping diagram to demonstrate the concept of the system constraint.  Let's look first at the piping diagram that I use.  In this diagram I have drawn a cross section of a piping system with each pipe having a different diameter.  Notice the two questions I ask next to the diagram.

I first lay the foundation for the question of needing more water to flow through the system and tell them that it is their job to increase the flow of water through the system.  I then ask what must be done to increase the throughput of water through this system and why they would do what they recommend.  Herein lies the major reason I use the piping diagram instead of the chain.  I equate the flow of water through the pipes to the flow of products through a process.  In other words, whereas the chain analogy talks about improving the strength of the chain, the piping diagram affords me the opportunity to interject flow, just like what happens in a typical manufacturing facility.  Section E is the system constraint just as the weakest link is in the chain.  Let's continue on with this line of reasoning.
In this slide I point out that Section E is the system constraint and then ask the question about what information they would need to determine the required diameter of Section E to deliver the right amount of water?  The point being that the demand placed on the constraint would determine how large the new diameter would need to be to supply the right amount of water.  The answer to this question is the same no matter whether you're talking about water flow or the amount of product to be produced in a manufacturing process.  In both cases, the determination would be based upon demand.  
In the next slide, we have changed the diameter of Section E to a larger diameter, but what I want the "students" to see here is that once the current constraint has been broken, it moves to a new location, meaning that there will always be a constraint within the least until customer demand has been satisfied.  When this happens, the constraint moves to the market, meaning that they now have more capacity to accept additional orders.

Before moving on, it's important to mention something.  The subordination step in Goldratt's 5 focusing steps is automatically realized in the piping diagram because of the amount of water passing through the constraint limits the flow through all pipes after the constraint.  I also take the time to explain that if the amount of water flowing into the piping system was increase, then it would back up and overflow.  This, of course, equates to running non-constraints at a faster rate than the constraint.
In the last slide, I ask my "students" if increasing the diameter of any or all sections of the piping diagram would result in more throughput of water through this system.  Of course the answer is no, only by changing (increasing) the diameter of the constraint will more water flow.  One of the problems I have with Lean is that many times teams work on non-constraints instead of the constraint and then are surprised when throughput doesn't improve.  As pointed out in this slide, the inevitable conclusion is that the system constraint controls the throughput and focusing improvement efforts anywhere else is usually wasted effort.  Of course, Cost Accounting devotees would disagree with this last statement.

I hope that you see the logic in why I use the piping diagram, rather than the chain analogy to explain the concept of the system constraint and why it's important to focus improvement efforts on the constraint. Please understand that I totally support using the chain analogy, but for my "students" it seems to bring the concept of the system constraint to them much faster. In my next posting I will return to my discussing on accounting methods.
Bob Sproull

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