Thursday, February 14, 2019

New Book Part 8

In my last post we completed our discussion on the Ultimate Improvement Cycle (UIC) by presenting the deliverables you should achieve as you complete your first rotation of this cycle.  In this post we will continue our discussion on the UIC and dig a bit deeper into what you can expect to happen as you complete the cycle.

The UIC accomplishes five primary objectives that serve as a springboard to maximize revenue and profits as follows:

  • It guarantees that you are focusing on the correct area of the process or system, to maximize throughput and minimize operating expense and inventory.
  • It provides a roadmap for improvement to ensure a systematic, structured and orderly approach to improvement, to maximize the utilization of your improvement resources.
  • It integrates the best of Lean, Six Sigma and TOC strategies to maximize your organization’s full improvement potential.
  • It ensures that the necessary up-front planning is completed in advance of changes to the process or organization, so as to avoid the “fire, ready, aim” mindset.
  • It facilitates the synergy and involvement of the entire organization, needed to maximize your full return on investment. In short, you will see a “jump” in profitability!

Step 1a

I will now discuss, in more depth, each step required to achieve these five primary objectives. Step 1 can best be characterized in one word—Identify. As stated earlier, all of Step 1 is a series of activities aimed at identifying, rather than taking action on. What we are attempting to do in this first step is collect information that will become the basis for our well-conceived action plan for improvement. So, as you go through Step 1, we know there will be a near-irresistible urge to make changes, but don’t do it yet. The success of the UIC is dependent on the development of a coherent plan and avoiding the “fire, ready, aim” scenario that has become one of the primary causes of failure of many improvement initiatives. Resist this urge!

In Step 1, I have combined identification of the value stream, from the Lean cycle; identification of performance metrics, from Six Sigma; and identification of the current and next constraint from the Theory of Constraints. The flow and inventory analysis is completed by simply reviewing the completed current state VSM or Process Map for location, and volume of inventory within the system. The performance metrics analysis is done by meeting with all departments and leaders to determine what metrics are tracked at all levels of the organization. If your company is like many others, you will be surprised by the number of performance metrics tracked. We also recommend that you determine how the metrics are communicated throughout the organization.

Identifying the current and next constraint is the most important activity in Step 1, simply because the constraint will become the focal point for most of your improvement activities. One of the easiest ways to locate the constraint is by walking the process with your team, during the development of the current state VSM or a Process Map. As you walk this process, you will be identifying both the location and volume of raw material, WIP and finished goods inventory. Typically, the location that has the highest level of inventory will be the current constraint, and the step with the next highest level will be the next constraint, but not always. Look also for policies and procedures that have been implemented that might be policy constraints. An example might be using the performance metrics, manpower efficiency or equipment utilization in every process step. Take your time and do it right, because it will be worth it in the end. Remember, the operative word here is to simply identify, and not take action, just yet. So, how do you identify the right performance metrics? In my next post we will answer this question and continue on our cycle of improvement.

Bob Sproull

Saturday, February 9, 2019

New Book Part 7

In my last post, I completed my discussion on some of the improvement tools, actions and focus I use when implementing the Ultimate Improvement Cycles.  In this post I will present the third of the three concentric circles of the Ultimate Improvement Cycle by presenting the necessary deliverables. This information is taken from my newest book,  The Focus and Leverage Improvement Book.

I have added a new element to my original UIC concentric circles, first introduced in my book, The Ultimate Improvement Cycle [1], with that being your expected TLS deliverables. The figure below is that third concentric circle.

In Step 1a, you should come away with a complete picture of the system you are attempting to
improve in terms of flow, plus the predicted people behaviors and the knowledge that efficiency should only be measured in the constraint.

In Step 1b, you should come away with the knowledge of location of and type of waste and inventory that exists in your current reality. In addition, you may also come away with a list of potential core system problems. Your take-away for Step 1c should be a working knowledge of both the location and type of variation, plus any recurring problems that currently exist within the system.

Your deliverable from Step 2a is a coherent action plan on how to improve your system’s capacity. The product of Steps 2b and 2c is a well-organized and well-controlled constraint, with minimal waste and only controlled, common cause variation present. 

In Step 3a, you should come away with a coherent and well-documented plan on how you intend to synchronize flow within your system. Your takeaway from implementing your synchronization plan that you developed in Step 3a should be a well-functioning process, exhibiting synchronized flow of products through your system. Your product from Step 3c is an optimized safety buffer, with minimal WIP (thanks to DBR and Buffer Management) throughout your system.

The deliverable from Step 4a is a well-thought-out and clear plan aimed at sustaining the gains you’ve made that will deliver and sustain an optimized process with excellent process capability and control. From Step 4b, you should have a complete understanding of your new capacities and financial gains from implementing Throughput Accounting. In Step 4c, your sustainment actions will be in place and functioning well, based on sound financial decisions. At this point, your actions should have resulted in a constraint that is no longer your constraint. So, based upon all of your actions and focus, your constraint should now be in a new location. This is the ultimate deliverable, and it’s time to return to Step 1a. But this time, your work should be much easier to perform.

In my next post, I will continue discussing this integrated methodology.
Bob Sproull

Thursday, February 7, 2019

New Book Part 6

In my last post, I discussed some of the improvement tools, actions and focus I use when implementing the Ultimate Improvement Cycles.  In this post I will continue discussing some of the other tools I use.  Just to refresh your memory, the figure below is the 2nd of 3 concentric circles used in the Ultimate Improvement Cycle.  This material is taken from my newest book, The Focus and Leverage Improvement Book.

In Step 2a, we will now develop our plan on how best to exploit our current constraint. Some of the tools we will use in Step 2b are organizing the current constraint using 5S (Sort, Set in order, Shine, Standardize, Sustain), standardized work and visual aids. If necessary, in Step 2c, sometimes I will perform a Design of Experiment (DOE), and/or create Causal Chains to identify cause and effect relationships. Sometimes it is necessary to create Conflict Diagrams to identify conflicts. The Conflict Diagram is one of TOC’s Thinking Process tools. I also recommend using an Intermediate Objectives Map (aka Goal Tree), to further identify key relationships.

In Step 3a, we are attempting to create a synchronized flow of product through our current constraint, which is why in Step 3b I recommend using Drum Buffer Rope in combination with Buffer Management to achieve this objective. In Step 3c, we will optimize our buffer size to limit our non-constraint production. In Step 4a, we need to develop our plan on how to elevate our constraint, if it’s necessary to do so. In addition, the plan needs to include our selected protective controls. In Steps 4b and 4c, we will execute our elevation plan. I recommend performing a capacity analysis and a cost benefit analysis. In our final step, Step 4c, we need to perform process audits and policy analysis and then implement control charts.

In my next post, I will continue discussing this integrated method by presenting the deliverables related to the Ultimate Improvement Cycle.
Bob Sproull