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