Another New Book Part 1

In this series of blog posts, I will be presenting highlights from my newest book, Theory of Constraints, Lean, and Six Sigma Improvement Methodology: Making the Case for Integration, which was just released.  This series is taken from the Preface of this new book and I hope you enjoy this series.

For quite a few years, I have been involved in improvement initiatives in a wide variety of different industry sectors. Back in the day when I started my improvement journey, I truly believed I had all of the tools in my improvement backpack that I needed in order to make significant improvements to processes and systems.  After all, I had become somewhat of an expert in improvement efforts using approaches like Total Quality Management, Total Preventive Maintenance, Statistical Process Control, Failure Mode and Effects Analysis, Design of Experiments and the list goes on and on.  And by using the tools from my backpack, I was able to make considerable improvements to many different kinds of processes in a wide array of industry segments. I was living the proverbial dream, so to speak.

As I continued learning, I began to realize that some of things I had taken as being the gospel were in fact, pretty much bogus!  I realized that maximizing the efficiency and utilization of each process step did not result in optimization of the total system at all.  In fact, I learned that maximizing the efficiency of all operations only served to create mountains of needless work-in-process inventory.  I learned that inventory was not an asset at all because it actually had a carrying cost associated with it.  But more importantly, excess inventory increased the effective cycle time of the process which decreased an organization’s ability to ship product on time.  I also learned that inventory tends to hide other problems.

I learned that cutting the cost of each individual operation did not result in the system cost being minimized.  In fact, many times in an attempt to minimize the cost of individual operations, companies made drastic cuts in operating expense and labor that were too deep, causing motivational, quality and delivery problems!  I also learned that in every organization there are only a few (and most of the time only one) operations that control the rate of revenue generation and subsequent profits.  All processes are comprised of constraining and non-constraining resources, so the key improvement consideration must always be to pinpoint and focus improvements on the operation that is constraining throughput.  Attempts to improve non-constraining resources generally result in very little improvement at all from a system perspective.

I continued learning and discovered that variability is clearly the root of all evil in a manufacturing process.  Variability in things like product characteristics or variability in process parameters or variability in processing times all degrade the performance of a process, an organization, and ultimately the total company.  Variability negatively impacts things like a company’s ability to effectively plan and execute their scheduled production plan. It also increases operational expense and decreases the chances of producing and delivering product to customers when they want them, and at the cost they are willing to pay.  Because variability is so devastating, every effort must be made to reduce it and then control it.  Six Sigma is the backbone of this part of the improvement effort.

In my next post, I will continue to present details about my newest book, Theory of Constraints, Lean, and Six Sigma Improvement Methodology: Making the Case for Integration.

Bob Sproull