Wednesday, May 22, 2019

Need you help

Good morning everyone.  As one of my valued connections and followers of my blog, I am asking for your help with a very important effort.  My daughter, Emily Hutcheson, is a Director at Butterfly Bridge and she needs your help.  Butterfly Bridge is a child advocacy center to protect children from child abuse.  As you’ll see below, they have an opportunity to win $40,000 to be used to help fund their organization.  Please find it in your heart to click on the link below and vote.  Voting is open through May 31st and the winner is based upon how many votes they get.  And please vote once a day until May 31st.  And also, please pass this on to your friends and ask them to vote.  In the next paragraph, there is an explanation that my daughter posted.
Thanks in advance everyone,
Bob Sproull

Butterfly Bridge has entered the Partners in Progress Video Contest that Wind Creek Hospitality is doing for all of Alabama and North Florida. We are using our mission video from a couple years ago and we think it is a great video! Please vote, vote, vote every day until May 31st.  You can even use multiple email addresses. The top 7 winners will be chosen and they will all win a certain amount of money, the top prize being $40,000!

Please pass this on to your friends, family, coworkers, etc. We really need some votes!

Thanks so much for all you do for Butterfly Bridge!  Here is the link: http://wshe.es/QWJ8zhIj

Monday, May 20, 2019

New Book Part 22

In my last post we completed our discussion on the various types of constraints that exist within most systems.  In today's post, I will begin a new series of posts on something referred to as the Goal Tree (aka Intermediate Objectives Map (IO Map)). As a reminder, this material is taken from my newest book, The Focus and Leverage Improvement Book - Locating and Eliminating the Constraining Factor of Your Lean Six Sigma Initiative, published by Routledge/Productivity Press.

The Goal Tree

Many people who have gone through training on the Theory of Constraint’s Thinking Process (TP) tools, have come away from the training somewhat overwhelmed and somewhat speechless to a degree.  Some “get it” and some just don’t.  Let’s face it, the TP tools are pretty intimidating and after receiving the training, I have seen many people simply walk away, feeling like they were ill-prepared to apply whatever it is they had supposedly just learned.  Even for myself, when I completed my first iteration of this training, I had this same feeling.  And in talking with others, there was a general confusion about how to get started.  For the average person, the TP tools are just not easy to grasp, so they end up kind of putting them on the back burner, rather than taking a chance on making a mistake using them.

The other complaint I have heard many times is that a full TP analysis typically takes many days to complete, and let’s face it, a regular executive team typically doesn’t have that kind of time to spend on this activity, or at least they feel like they don’t. Well for everyone who feels the same way, or maybe have gone through the same Jonah training as I did, and feel somewhat hopeless or confused, I have hope for you.  That hope for you is another logic diagram, currently known as the Goal Tree.  We say currently, because the man responsible for creating the Goal Tree, [1] Bill Dettmer, originally referred to this tool as an Intermediate Objectives Map (IO Map), but has elected to change its name in recent years.  Before going any further, I want to make sure everyone understands that I am a huge proponent of TOC’s Thinking Processes!

But having said that, I am an even bigger fan of the Goal Tree.  Why?  Because most people grasp what the Goal Tree will do for them right away, and how simple it is to learn, construct, and apply. Many of the people I have trained on the Goal Tree, have emailed me, telling me they wished they had learned this tool many years ago.  They learn it and apply it right away!

Bill Dettmer, who happens to be my favorite author of all time, tells us of his first exposure to IO Maps/Goal Trees was back in 1995 during a management skills workshop, conducted by another TOC guru, Oded Cohen, at the Goldratt Institute.  In recent years, Dettmer has written much about the IO Map (now referred to as a Goal Tree) and now uses it as the first step in a full Thinking Process analysis.  Bill is passionate about this tool and believes that it defines the standard for goal attainment and its prerequisites, in a much more simple and efficient way.  I happen to agree with Bill and believe that the Goal Tree is a great focusing tool, to better demonstrate why an organization is not meeting its goal.  And because of its simplicity, it is easy not only learn, but also, it’s much easier to teach others in your organization how to use it than the full TP analysis.

There are other advantages of learning and using the Goal Tree, including a better integration of the rest of the TP tools, that will accelerate the completion of Current Reality Trees, Conflict Resolution Diagrams and Future Reality Trees, if you choose to use them.  But what I really like about the Goal Tree, is that it can be used as a stand-alone tool, resulting in a much faster analysis of the organization’s weak points, and then a rapid development of an improvement plan for your organization.  I have been teaching the Goal Tree for quite a few years, and can state unequivocally, that the Goal Tree has been the favorite of most of my classes and workshops.

One of the lessons I always encourage my students to do, is that they should always learn a new tool and then make it their own.  That message simply means that even though the “inventor” of a tool typically has a specific use in mind, tools should be continually evolving, and such was case for me with the Goal Tree.  Personally, I have attempted to transform this tool into one that most people grasp and understand in very short order, and then see its usefulness in a matter of minutes or hours, rather than days.

When using any of TOC’s Thinking Process tools, there are two distinctly different types of logic at play, sufficiency and necessity.  Sufficiency-based logic tools use a series of if-then statements, that connect cause and effect relationships between most of the system’s undesirable effects.  Necessity-based logic uses the syntax, in order to have x, I must have y or multiple y’s.  The Goal Tree falls into the category of necessity-based logic and can be used to develop and lay out your company’s strategic and tactical actions that result in successful improvement efforts.

As mentioned earlier, the Goal Tree dates back to at least 1995 when it was casually mentioned during a Management Skills Workshop conducted by Oded Cohen at the A.Y. Goldratt Institute, but it was not part of that workshop, nor did it ever find its way into common usage as part of the Logical Thinking Process (LTP).   It was described as a kind of Prerequisite Tree without any obstacles.” 

Dettmer tells us that he never thought much about it for the next seven years, until in late 2002, when he began grappling with the use of the Logical Thinking Processes (LTP) for developing and deploying strategy.  At that time, Dettmer had been teaching the LTP to a wide variety of clients for more than six years, and had been dismayed by the number of students who had substantial difficulty constructing Current Reality Trees (CRTs) and Conflict Resolution Diagrams (CRDs) of sufficient quality. According to Dettmer, they always seemed to take a very long time to build a CRT, and their CRD’s were not always what he would characterize as “robust.”  He claimed they lacked reference to a “should-be” view of the system—what ought to be happening.  It occurred to Dettmer that the Goal Tree he’d seen in 1995, could be modified and applied to improve the initial quality of CRTs.  As time went on, Dettmer began to realize that the Goal Tree could serve a similar purpose with CRD’s.  In 2007, Dettmer published a book, [2] The Logical Thinking Process: A Systems Approach to Complex Problem Solving that introduced the world to this wonderful tool and I always highly recommend this book.

In my next post, we will continue our discussion on the Goal Tree.
Bob Sproull

Tuesday, May 14, 2019

New Book Part 21

In my last post I discussed how all three elements of the Ultimate Improvement Cycle work in unison to maximize throughput and profitability.  In today's post, I will discuss the various types of system constraints that must be located before real and lasting improvement to flow and profitability can be achieved.  As a reminder, this material is taken from my newest book, The Focus and Leverage Improvement Book - Locating and Eliminating the Constraining Factor of Your Lean Six Sigma Initiative, published by Routledge/Productivity Press.

Types of Constraints

Until now, we have focused on identifying the physical constraints in a manufacturing process, and how to break them.  But, what if the constraint isn’t located inside the process? What if the constraint is policy related, or a non-physical entity, such as the efficiency metric? Let’s take a look at what this means, in terms of our improvement effort.

[1] Bill Dettmer explains that, “Identifying and breaking constraints, becomes a little easier if there is an orderly way to classify them.” Dettmer tells us that there are seven basic types of constraints as follows:

  • Resource/Capacity Constraints
  • Market Constraints
  • Material Constraints
  • Supplier/Vendor Constraints
  • Financial Constraints
  • Knowledge/Competence Constraints
  • Policy Constraints

Let’s take a look at each of these constraints and what they mean to us for our improvement efforts.

  • Resource/Capacity Constraints:  This type of constraint exists when the ability to produce or deliver the product is less than the demands of the marketplace. That is, the orders exist, but the company has insufficient capacity to deliver. These types of constraints have been what we have been discussing since we started this chapter and why using the UIC will increase capacity (throughput) to high enough levels. In fact, eliminating this type of constraint, leads directly to the next one.
  • Market ConstraintThis type of constraint exists when the demand for a product or service, is less than the capacity to produce or deliver the product or service. That is, the company has not developed a competitive edge to realize enough orders for their product or service. Market constraints come about simply because the company is unable to differentiate itself from its competition. So, how can a company differentiate itself? Quite simply, there are four primary factors associated with having, or not having, a competitive edge.  

Quality – In its most basic form, quality is a measure of how well a product conforms to design standards. The secret to becoming quality competitive is first, designing quality into products; second, the complete eradication of special cause variation; and third, developing processes that are both capable and in control. On-Time Delivery – This factor requires that you produce products (or deliver services) to the rate at which customers expect them. This means that you must have product flow within your facility, that is better than that of your competition. As you now know, this involves identifying, focusing on, and improving your constraint. It also involves reducing unnecessary inventory, that both lengthens cycle times and hides defects. Customer Service – This simply means that you are responsive to the needs of your customer base. Customers must feel comfortable that, if their market changes, their supply base will be able to change right along with them, without missing a beat. If the customer has an immediate need for more product, the supplier that can deliver, will become the supplier of choice. Cost – This factor is perhaps the greatest differentiator of all, especially in a down economy. But having said this, low cost, without the other three factors, will not guarantee you more market share. The good news is, if you are improving throughput at a fast-enough rate, the amount you charge a customer for their business can be used to capture it. So, as long as your selling price is greater than your totally variable costs, the net flows to the bottom line.

Let's get back to our discussion on types of constraints.
  • Material ConstraintsThis type of constraint occurs because the company is unable to obtain the essential materials in the quantity or quality needed to satisfy the demand of the marketplace. Material constraints are very real for production managers and over the years they have been such a problem that material replenishment systems like MRP and SAP were developed in an attempt to fix them. However, as you know (or should know) MRP and SAP haven’t delivered the needed fix and as a result companies have spent millions of $’s needlessly, because these systems haven’t addressed the root cause of the shortages.
  • Supplier/Vendor ConstraintsThis type of constraint is closely related to Material Constraints, but the difference is that suppliers are inconsistent because of excessive lead times in responding to orders. The net effect is that because the raw materials are late arriving, products cannot be built and shipped on time.
  •  Financial ConstraintsThis type of constraint exists when a company has inadequate cash flow needed to purchase raw materials for future orders. Under this scenario, companies typically must wait to receive payments for an existing order before taking any new orders. An example of this type of constraint is a weak accounts receivable process whereby companies deliver products, but payments take long times to be received and posted.
  • Knowledge/Competence ConstraintsThis type of constraint exists because the knowledge or skills required to improve business performance or perform at a higher level, is not available within the company. An example of this is a company purchasing robotics, but fails to develop the necessary infrastructure and knowledge to support the new technology. What typically happens is the equipment breaks down and remains down for extended periods of time thus losing needed throughput.
  • Policy ConstraintsLast, but certainly not least, is the policy constraint, which includes all of the written and unwritten policies, rules, laws or business practices, that get in the way of moving your company closer to your goal of making more money now and in the future. In fact, Dettmer tells us, “In most cases, a policy is most likely behind a constraint from any of the first six categories. For this reason, TOC assigns a very high importance to policy analysis.” The most common examples of policy constraints include the use of performance metrics like operator efficiency or machine utilization where there is a push to maximize metrics in all steps in the process, when in reality maximizing them in the constraint is the only place that matters.
In my next post we will look at what I believe is the most valuable of all tools in the TOC arsenal, The Goal Tree.
Bob Sproull

Post References:

[1] H. William Dettmer, Breaking the Constraints to World Class Performance, (Milwaukee, WI, Quality Press, 1998)

Tuesday, May 7, 2019

New Book Part 20

In my last post I discussed Eli Goldratt's third step in his process of on-going improvement subordination.  In today's post, I will demonstrate how the Theory of Constraints, Lean and Six Sigma work together to counter the weaknesses of one methodology by using the strengths of the others. As a reminder, this material is taken from my newest book, The Focus and Leverage Improvement Book - Locating and Eliminating the Constraining Factor of Your Lean Six Sigma Initiative, published by Routledge/Productivity Press.

There has been push-back by some people on the whole concept of Throughput Accounting (TA).  As a result, they don’t buy into using TA as a reason for integrating TOC, Lean and Six Sigma. So, let’s put the financial side of this integration to the side for a moment. In addition to the financial case made for integrating these three improvement methodologies, there are other rational and logical reasons why this integration works so well. In attempting to answer which of these three initiatives a company should use, or “which tune a company should dance to,” Thompson presents an excellent summary of the fundamental elements, strengths and weaknesses for each improvement initiative. In doing so, Thompson has inadvertently (or perhaps purposely) answered the underlying question of why the three improvement initiatives should be combined and integrated, rather than choosing one over the other.

The first four columns in the table below, reflect the summary of Thompson’s comparison (i.e. the initiative, fundamental elements, strengths and weaknesses). I have added a fifth column, “Counter Balance,” that demonstrates how the strengths of one initiative, counter-balance or compensate for the weaknesses of the others. As a matter of fact, by comparing each of the weaknesses and strengths of each of the three initiatives, we see that all of the weaknesses of each individual initiative, are neutralized by one or both of the strengths of the other two. This is such an important point for those companies that have experienced implementation problems for any of the three individual improvement initiatives done solo. 


Initiative
Fundamental Elements
Strengths
Weaknesses
Counter Balance








Lean
The cause of poor performance is wasteful activity.  Lean is a time-based strategy and uses a narrow definition of waste (non-value-adding work) as any task or activity that does not produce value from the perspective of the end user.  Increased competitive advantage comes from assuring every task is focused on rapid transformation of raw materials into finished product.
1.       Provides a strategic approach to integrated improvements through value stream mapping and the focus on maximizing the value-adding-to-waste ratio.
2.       Directly promotes and advocates radical breakthrough innovation.
3.       Emphasis on fast response to obvious opportunities (just go do it).
4.       Addresses workplace culture and resistance to change through direct team involvement at all levels of the organization.
1.       May promote risk taking without reasonable balance to consequence.
2.       May not provide sufficient evidence of business benefit for traditional management accounting.
3.       Has a limitation when dealing with complex interactive and recurring problems (uses trial and error problem solving)
1.       Six Sigma strength # 3


2.       Six Sigma strength # 2 and TOC strength # 4


3.       Six Sigma strength # 1 and TOC strength # 3.








Six
Sigma
The cause of poor performance is variation in process and product quality.  Random variations result in inefficient operations causing dissatisfaction of customer from unreliable products and services.  Increased competitive advantage comes from stable and predictable processes allowing increased yields, improving forecasting and reliable product performance.
1.       The rigor and discipline of the statistical approach resolves complex problems that cannot be solved by simple intuition or trial and error.
2.       The data gathering provides strong business cases to get management support for resources.
3.       The focus on reduction of variation drives down risk and improves predictability.
1.       Statistical methods are not well suited for analysis of systems integration problems.  I can calculate sigma for a product specification, but I am not sure how to establish sigma for process interactions and faults.
2.       The heavy reliance on statistical methods by its very nature is reactive, as it requires a repetition of the process to develop trends and confidence levels
3.       The strong focus on stable processes can lead to total risk aversion and may penalize innovative approaches that by their nature will be unstable and variable.
1.       Lean strength # 1 and TOC strength # 2








2.       Lean strength # 2 and Lean strength # 3





3.       Lean strength # 2









TOC
The cause of poor performance is flawed management technique.  Systems logic is used to identify constraints and focus resources on the constraint.  The constraint then becomes the management fulcrum.
1.       Provides simplified process and resource administration through a narrow focus on the constraint for management of a process as well as improvement efforts (exploitation).
2.       Looks across all processes within a systems context to assure that limited resources are not overbuilding non-constraint capability (the local optimization problem).
3.       Distinguishes policy vs. physical constraints.
4.       Provides direction on appropriate simplified measures (throughput, inventory and operating expense).
1.       Overemphasizing exploitation of the constraint may lead to acceptance or tolerance of wasteful non-constraint tasks within the process.
2.       If the underlying process is fundamentally inadequate no matter how well managed it may not achieve the goals and objectives.
3.       Does not directly address the need for cultural change.  TOC change process is very technically oriented and fully acknowledges the need for TQM and other improvement methods.
1.       Lean strength # 1 and Six Sigma strength # 2



2.       Lean strength # 2





3.       Lean strength # 4

Let’s look at several examples on how these counterbalances work so well.  In the above table, we see that Weakness 1 in Lean, “May promote risk taking without reasonable balance to consequence,” is counter balanced by Six Sigma Strength 3, “The focus on reduction of variation, drives down risk and improves predictability.” One thing we know for certain is that as we reduce variation in our process, we reduce risk and our ability to predict future outcomes improves dramatically. This is the cornerstone of statistical process control, which means that risks can be minimized if we rely on this Six Sigma strength to do so.

Continuing, Lean Weakness 2 tells us that we may not provide sufficient evidence of business benefit for traditional Cost Accounting. This weakness is countered by both Six Sigma Strength Number 2, the data gathering provides strong business cases to get management support for resources and by TOC Strength Number 4, provides direction on appropriate simplified measures (Throughput, Inventory and Operating Expense). As we have stated many times before, traditional Cost Accounting induces us to make incorrect decisions, so by adopting Throughput Accounting practices, from the Theory of Constraints, we will have sufficient evidence to make changes to our process, assuming we are focusing on the constraint operation.

Lean Weakness 3 states that, Lean has a limitation when dealing with complex interactive and recurring problems (uses trial and error problem solving) and is countered by Six Sigma Strength 1, the rigor and discipline of the statistical approach resolves complex problems that cannot be solved by simple intuition or trial and error and TOC Strength 3, (distinguishes policy vs. physical constraints). One of the Six Sigma tools that permit us to solve complex interactive and recurring problems is Designed of Experiments (DOE). DOE’s identify significant factors that cause problems, and identifies insignificant factors that do not. TOC Strength 3 helps us in two ways. First, if the problem we are facing is a policy constraint, we use TOC’s Current Reality Tree to identify it, and TOC’s Conflict Cloud to solve it. Both of these strengths will compensate for this weakness in Lean.

Now let’s look at one of the Six Sigma and TOC weaknesses and see how they are compensated for by other strengths. For example, look at Six Sigma Weakness 2, the heavy reliance on statistical methods, by its very nature is reactive, as it requires a repetition of the process to develop trends and confidence levels. This weakness is off-set by Lean strength 2, directly promotes radical breakthrough innovation, and by Lean Strength 3, emphasis on fast response to opportunities (just go do it). Likewise, TOC Weakness 3, TOC’s inability to address the need for cultural change, is off-set by Lean strength 4.

In the same way, if we compare all of the weaknesses in Lean, Six Sigma and TOC to the strengths found in the other initiatives, the three initiatives not only complement each other, but they rely on each other. The table above, is from Steven W. Thompson, Lean, TOC or Six Sigma Which tune should a company dance to? It is from an article in e-newsletter, Lean Directions.  So, in addition to the demonstrated financial benefits of this symbiotic trilogy, we now see evidence from a logical perspective, as to why they should be implemented in unison as a single improvement strategy.

In my next post, I will discuss the various types of system's constraint that you must identify and deal with as you continue on your improvement journey.
Bob Sproull

Monday, April 29, 2019

New Book Part 19

In my last post I presented ten prerequisite beliefs that you must embrace if you are to successfully improve the system you are working in.  In today's post I want to discuss Goldratt's third step in his process of on-going improvement, subordination. As a reminder, this material is taken from my newest book, The Focus and Leverage Improvement Book - Locating and Eliminating the Constraining Factor of Your Lean Six Sigma Initiative. published by Routledge/Productivity Press.

Of all the TOC focusing steps, subordination will be the most difficult one to apply. It simply means that every decision made, and every action taken by the entire organization, must be done so based on its impact on the constraining resource. And when we say the entire organization, we mean everyone!  Subordination also means that over-production must not occur, simply because we don’t want to clog the system with excess WIP.

Accounting must provide real time decision-making information to the organization, and not hold onto financial measures that are based on what happened last month or even last quarter. Accounting must also eliminate outdated performance metrics like utilization and efficiency in non-constraint operations, because they mean absolutely nothing.

Purchasing must order parts and materials based upon the rate of consumption, especially at the constraint, and stop ordering in large quantities or only on the basis of lowest cost to satisfy another outdated performance metric, purchase price variance. Sales and Marketing must understand that unless and until the current constraint is broken, they must not make hollow promises on delivery dates, in order to obtain more orders to supplement their sales commissions.

Engineering must respond quickly to the needs of production, to assure timely delivery and updates to specifications. Maintenance must always prioritize their work, based upon the needs of the constraining operation, including preventive and reactive maintenance activities. If there is an inspection station that impacts the constraint Throughput, then inspectors (if they exist) must always provide timely and accurate inspections so as to never cause delays that negatively impact the flow of materials into and out of the constraint. Finally, Production Control must stop scheduling the plant on the basis of forecasts, that we know are using the outdated algorithms contained within the MRP system.  DBR should be the scheduling system of choice.

As you identify the constraint, and subordinate the rest of the organization to the constraint, there will be idle time at the non-constraints. If you are like many organizations that use total system efficiency and/or utilization as key performance metrics, then you will see both of them, predictably decline. You are normally trying to drive efficiencies and utilizations higher and higher at each of the individual operations, under the mistaken assumption that the total efficiency of the system, is sum of the individual efficiencies. In a TOC environment, the only efficiencies or utilizations that really matter are those measured in the constraint operation. You may even be using work piece incentives, in an effort to get your operators to produce more and I’m sure many of you are using variances as a key performance metric. Efficiencies, utilizations, incentives and variances are all counterproductive!

Believe me, no matter how good you think your processes are, they are full of waste and variation. You must accept the premise that every process contains both excessive amounts of waste and variation, that are just waiting to be identified, removed, reduced and controlled. Your job will be to locate, reduce, and hopefully eliminate the major sources of both. Variation corrupts a process, rendering it inconsistent and unpredictable. Without consistency and control, you will not be able to plan and deliver products to your customers in the time frame you have promised. Waste drives up both operating expense and inventory, so improvements in both of these, will fall directly to the bottom line as you improve the Throughput of your process and more specifically your constraining operation. Yes, you will observe waste in your non-constraint operations, but for now focus your resources only on the constraint!

If your organization has truly accepted the ten prerequisite beliefs I presented in my last post, and all that goes with them, then you are ready to begin this exiting journey that has no destination. But simply saying you believe something can be hollow and empty. It is your day-to-day actions that matter most. Review the ten prerequisite beliefs as a group on a regular basis, and then hold your employees and yourself accountable to them. Post them for everyone to see. Utilizing the Ultimate Improvement Cycle, and true acceptance of and employment of these ten prerequisite beliefs, will set the stage for levels of success you never believed were possible!

In my next post, I will demonstrate how the Theory of Constraints, Lean and Six Sigma work together with the weaknesses of one methodology are off-set by the strengths of the others.

Bob Sproull

Monday, April 22, 2019

New Book Part 18

In my last post I explained that even if we were successful in reducing cycle time, we would not realize a single piece of Throughput, unless we reduced the processing time and non-value-added time of the operation that is constraining the Throughput, the constraint. Any attempts to reduce processing times in operations that are not constraining Throughput, are quite simply wasted effort. As a reminder, this material is taken from my newest book, The Focus and Leverage Improvement Book - Locating and Eliminating the Constraining Factor of Your Lean Six Sigma Initiative. published by Routledge/Productivity Press.

I also explained that the key to making more money now and in the future, is tied to two single beliefs, focus and leverage. In TOC terminology, these two beliefs of focus and leverage are fundamental to the idea of exploiting the constraint. If you want to increase your Throughput, then there is only one effective way to accomplish it. You must leverage the operation that is limiting your Throughput, your constraint operation! And how do you leverage your constraining operation? You do so by focusing your available improvement resources on your constraint and reduce the non-value-added and value-added times within the current cycle time.  I closed the last post by telling you that in order to be successful, there are ten basic prerequisite beliefs that you must adhere to if you are to be successful.  So let's look at these prerequisite beliefs.

10 Prerequisite Beliefs

I told you not to just jump right into the UIC and begin the improvement process. In this post, we’re going to define the ten prerequisite beliefs that your organization must embrace before your organization will be able to successfully implement and navigate through the Ultimate Improvement Cycle:


  • Believing that leveraging the constraint, and focusing your resources on the constraint, is the key to improved profitability. Because of this, the constraint can never sit idle.
  • Believing that it is imperative to subordinate all non-constraints to the constraint. If you violate this key belief, your throughput will not improve and your WIP will grow to unacceptable levels, thus draining cash from your coffers.
  • Believing that improving your process is a never-ending cycle. You must be ready to re-focus your resources when the constraint moves, and it will move eventually.
  • Believing that involving and empowering your total workforce is critical to success. Your work force has the answers, if you will first listen to what they have to say and then engage them to design the solution.
  • Believing that abandoning outdated performance metrics, like efficiency and utilization, reward or incentive programs, and variances is essential to moving forward. As Goldratt says in his book, The Goal, “Show me how you measure me, and I’ll show you how I’ll behave.” These outdated metrics and practices are archaic tools from the past, so you must let them go.
  • Believing that excessive waste exists in your process, and that it must be reduced or removed. Studies have confirmed that typical processes have less than 10% value-added work, meaning that waste accounts for 90% of the available time.
  • Believing that excessive variation is in your process and that it must be reduced and then controlled. One of the keys to growth in profitability, is consistent and reliable processes. Processes are full of variation and uncertainty, and unless and until variation is reduced, and then controlled, moving forward will be difficult.
  • Believing that problems and conflicts must be addressed and solved. You can no longer afford to hide problems with inventory. When problems arise, you must stop the process and take the time to solve them. By solving them, we’re talking about finding and eliminating the root cause(s).
  • Believing that constraints can be internal, external, physical or policy or any combination of the four. In the real world, over 90% of all constraints are policy related. Policies and procedures must be scrutinized, changed, and sometimes thrown in the garbage and replaced with policies that make sense.
  • Believing that the organization is a chain of dependent functions, and that systems thinking must replace individual thinking. It is no longer acceptable to focus on improving single steps in the process, if it isn’t the weakest link. This focus on local optima, must be replaced with system optimization.
If your entire operation is ready to accept the prerequisite beliefs of constraint focus and leverage, then you have taken the first step, but it must include everyone and every department. Your entire organization must become focused on the leveraging power of the constraining operation. If you can’t do that, then there simply is no need to continue. Unless and until all functional groups within your organization, are singing from the same sheet of music, you simply will  not make any progress.

In my next post we will continue our discussion on how to use the Ultimate Improvement Cycle to make major gains in profitability.

Bob Sproull

Tuesday, April 16, 2019

New Book Part 17

In my last post we began a discussion on value-added versus non-value-added activities and made a list of some of the key areas of interest that might reduce the overall cycle time. In today's post, we will continue our discussion on non-value-added times and how we can capitalize them for cycle time reductions.  As a reminder, this material is taken from my newest book, The Focus and Leverage Improvement Book - Locating and Eliminating the Constraining Factor of Your Lean Six Sigma Initiative. published by Routledge/Productivity Press.

Just to refresh your memory, here is the list we put together in my last post.

  • Transport time – moving product from point A to point B.
  • Set-up time – converting a process from one configuration to another.
  • Queue time – time spent waiting to be processed.
  • Process batch time – time waiting within a batch.
  • Move batch time – time waiting to move a batch to the next operation, which could also include time in storage.
  • Wait-to-match time – time waiting for another component to be ready for assembly.
  • Drying time – time waiting for things like adhesives to become ready to be assembled.
  • Inspection wait time – time waiting for products to be inspected.



We said in my last post that there might be others we could add to our list, but for now assume this is our list. Which of these items add value? Clearly none of them do, so they would all be classified as non-value-added. There obviously are things we could do to reduce each one of these. For example, process batch time, is driven by the process batch size, so we could do two things that would reduce this time. We could optimize the batch size that we produce, and in conjunction with this, we could reduce the time required for set-up. In doing these two things, we would probably also reduce the move batch time, and maybe even the wait-to-match time. Clearly these actions would reduce the overall cycle time.

But even if we were successful in reducing cycle time, we would not realize a single piece of Throughput, unless we reduced the processing time and non-value-added time of the operation that is constraining the Throughput, the constraint. Any attempts to reduce processing times in operations that are not constraining Throughput, are quite simply wasted effort.

The key to making more money now and in the future, is tied to two single beliefs, focus and leverage. In TOC terminology, these two beliefs of focus and leverage are fundamental to the idea of exploiting the constraint. If you want to increase your Throughput, then there is only one effective way to accomplish it. You must leverage the operation that is limiting your Throughput, your constraint operation! And how do you leverage your constraining operation? You do so by focusing your available improvement resources on your constraint and reduce the non-value-added and value-added times within the current cycle time. It’s really that simple!

So, are you ready to begin your own cycle of improvement now? Not quite.  There are other important things that you must consider, before beginning your own cycle of on-going improvement. There are 10 prerequisite beliefs that apply to your organization that, I believe must be considered before you begin your journey.

In my next post, we will discuss these prerequisite beliefs in detail and then move on.
Bob Sproull



Monday, April 8, 2019

New Book Part 16

In my last post we completed our first pass through the entire Ultimate Improvement Cycle by explaining the basics of steps 3a, 3b, 3c, 4a, 4b, and 4c.  As a refresher, the figure below is a graphic of the UIC.
In today's post I will begin to explain the methodology for implementing this improvement cycle.  As a reminder, this material is taken from my newest book, The Focus and Leverage Improvement Book - Locating and Eliminating the Constraining Factor of Your Lean Six Sigma Initiative. published by Routledge/Productivity Press.

How to Implement the UIC
In our last post, we completed the first rotation of the Ultimate Improvement Cycle, so now it’s time to get started with your own cycle of improvement. I have hopefully convinced you of its value for your company. If I have convinced you, then you probably are wondering about the best way to get started. “Do I go out and just start at Step 1a of the Ultimate Improvement Cycle?” The answer is no, because if you did that, you would almost immediately begin hitting barriers and obstacles that would limit your success or maybe even question the validity of this cycle of improvement. So, if not Step 1a, then what?

Let’s first consider the question of what we are attempting to do. You need to start by accepting that the basic goal of all “for profit” organizations, is to make money now and in the future. If you’re already making money, perhaps your goal might be better stated as, “to make more money now and more money in the future.” If this is your goal, then the question you would ask yourself, “What is preventing me from making more money now and more money in the future?” My experience tells me that there are a host of things that prevent companies from making more money.

In its most basic form, making money involves generating revenue that is greater than what it costs to generate it. So, obviously if operating expenses are too high, and you aren’t generating enough revenue, then you won’t be making money. So, the question is, just how do you generate more revenue? Assume for a moment that you have more orders than you have capacity to fill them. Since you are unable to satisfy market demand, it follows that your throughput is too low. If your throughput is too low, it must also mean that your cycle times are too long. It follows then that the key to generating more revenue, must be reducing cycle times. How do we reduce cycle times? Let’s first look at something called Little’s Law.

Little’s Law states that, Cycle time equals WIP divided by Throughput (i.e. CT = WIP/T). It should be clear that reducing cycle time implies reducing WIP, as long as Throughput remains constant. So, if you have large amounts of WIP, then clearly you have an opportunity to reduce cycle time. But what if you don’t have large amounts of WIP in your plant (I’m betting you do though)? How else might we reduce cycle times?

We know that cycle time is equal to the sum of all processing times for each process step. We also know that cycle time is the sum of all value-added time, plus all non-value-added time in the total process. So, if we want to decrease cycle time, then we have three choices:

1. We can reduce value-added time
2. Reduce non-value-added time
3. Do some of both.

Just think about which activities add value, versus those that do not. Let’s make a list.
  • Transport time – moving product from point A to point B.
  • Set-up time – converting a process from one configuration to another.
  • Queue time – time spent waiting to be processed.
  • Process batch time – time waiting within a batch.
  • Move batch time – time waiting to move a batch to the next operation, which could also include time in storage.
  • Wait-to-match time – time waiting for another component to be ready for assembly.
  • Drying time – time waiting for things like adhesives to become ready to be assembled.
  • Inspection wait time – time waiting for products to be inspected

There might be others we could add to our list, but for now assume this is our list. Which of these items add value? Clearly none of them do, so they would all be classified as non-value-added. There obviously are things we could do to reduce each one of these. For example, process batch time, is driven by the process batch size, so we could do two things that would reduce this time. We could optimize the batch size that we produce, and in conjunction with this, we could reduce the time required for set-up. In doing these two things, we would probably also reduce the move batch time, and maybe even the wait-to-match time. Clearly these actions would reduce the overall cycle time.


Clearly, non-value-added time by far and away accounts for the largest percentage of total cycle time in all processes. This would imply that, if we significantly reduce non-value-added time in our process, then we could significantly reduce cycle time, which would in turn, significantly improves our on-time delivery, Throughput, and revenue. So, what are these non-value-added times that we have referred to? Just think about which activities add value, versus those that do not. Let’s make a list.

In my next post, we will continue our discussion on non-value-added times and how we can capitalize them for cycle time reductions.