Another New Book Part 7

In my last post I explained that this series of posts was taken from my newest book, Theory of Constraints, Lean, and Six Sigma Improvement Methodology - Making the Case for Integration, I will be discussing how I present the basics of TOC to those readers who may not be familiar with it.

I started the last post by saying that Goldratt and Cox analogized the concept of a chain to organizations and explained that failing to identify and strengthen the organization’s weakest link, or system constraint, will not strengthen the global system.

While Goldratt and Cox used a chain analogy to define what a constraint is, I use a different approach when explaining TOC to people who aren’t familiar with what it is. As I present this different approach, remember that the Theory of Constraints is a methodology for identifying the most important limiting factor (i.e. constraint) that stands in the way of achieving your goals and then systematically improving that constraint until it is no longer the limiting factor. So, let’s look at a different way of describing TOC.

The figure below is a simple piping system used to transport water. Water enters into Section A of this piping system, then flows into Section B and continues downward through all of the pipes until it collects in the receptacle at the base of the system. In this piping system, water flows via gravity, meaning that if you wanted more water, you could not increase the pressure to get more.

In every system, there is a point that limits throughput and this piping system is no different. Think for a minute what you would have to do to achieve an increase in the flow of water through this system? Because Section E’s diameter is the smallest, does it make sense to you that if you wanted to increase the flow of water through this system, the only way you could achieve this would be to increase the diameter of this limiting point? In other words, Section E is limiting the flow of water (i.e. throughput) through this piping system and because of this, it is designated as the system constraint (aka the bottleneck). Now ask yourself what would determine how much larger Section E’s diameter must be? The answer to this basic question is that it depends upon how much more water is needed. In other words, it’s dependent upon the new demand requirement.

In the figure below, we have now opened-up Section E’s diameter and as you can see, more water is now flowing through the system. When Section E’s diameter was increased, three distinct changes took place. First, the system constraint moved from Section E to Section B because it is now the smallest diameter pipe. Second, the throughput of water increased to the limit of the new constraint (Section B), and finally, water has now begun to accumulate in front of Section B.

Ask yourself, “Would increasing the diameter of any other section have resulted in any more throughput of water?” The answer is a resounding no! Only increasing the diameter of Section E would have resulted in more water flowing through this system. The inevitable conclusion is that the system constraint controls the system throughput and focusing improvement efforts anywhere else is typically wasted effort.

In my next post we will demonstrate how this might apply to a simple manufacturing process.

Bob Sproull

Another New Book Part 6

In this series of posts, again taken from my newest book, Theory of Constraints, Lean, and Six Sigma Improvement Methodology - Making the Case for Integration, I will be discussing how I present the basics of TOC to those readers who may not be familiar with it.

In the 1980s, Dr. Eliyahu M. Goldratt and Jeff Cox introduced us to their Theory of Constraints (TOC) improvement methodology through their highly successful and widely read business novel, The Goal [1]. Goldratt and Cox explained to us that systems are comprised of interdependent processes and functions which they equated to a chain. They explained that every chain has a weakest link, and in order to strengthen the total chain, you must first identify this weakest link and then focus your improvements on it until it is “broken.” And when it does break, a new constraint will appear immediately. They further explained that any attempts to strengthen the other links in the chain will not result in a stronger chain because it will still break at the weakest link.

Goldratt and Cox analogized the concept of a chain to organizations and explained that failing to identify and strengthen the organization’s weakest link, or system constraint, will not strengthen the global system. Similarly, attempts to improve non-constraint operations will not necessarily translate into significant organizational improvement resulting in profitability improvement. It’s kind of like a professional baseball team signing free agent sluggers when the real constraint is relief or starting pitching. They can score lots of runs, but in the end, if they can’t hold the other team to fewer runs than they score, they’ll never win a pennant.

According to Dettmer [2] and Goldratt and Cox [1], the Theory of Constraints is based upon the fact that there is a common cause for many effects we observe at the systemic or organizational level. TOC envisions a company as a system, or a set of interdependent relationships, with each relationship being dependent on others in some way. The global system performance is dependent upon the combined efforts of all of the relationships within the organization. In addition, there are disruptions and statistical fluctuations (i.e. variability) that interfere with the production and delivery of products to the next process step that ultimately impact delivery to the customer. It’s important to understand that every for-profit organization has the same two goals, to make money now and to make money in the future. Therefore, every action or decision taken by an organization should be judged by its impact on “the organization’s goals.” This, of course, implies that before we can do this, we must first define the goal and, second, determine how we are going to measure or judge our decisions and actions.

In my next post I will lay out how I present the concept of what a constraint is and why it's so important to identify it.

Bob Sproull

Another New Book Part 5

This blog post is the last in this series from my newest book, Theory of Constraints, Lean, and Six Sigma Improvement Methodology: Making the Case for Integration, which was just released.  As I said in the beginning of this series, it is taken from the Preface of this new book and I hope you enjoy this series.  In my last post in this series, I continued discussing some of my early learnings gained throughout my career and in this post, I will continue along these lines.

For those of you who have not yet had the opportunity to learn about the Theory of Constraints (TOC), I will open this book with a chapter on what it is and why it will work so well in your own improvement efforts.  In addition, I will explain in detail, the method I use to teach newcomers what TOC is and what it will do for any company.  TOC is clearly the “missing link” in most improvement initiatives.

In the second chapter, I will lay out the important points related to Lean Manufacturing and demonstrate how to identify and remove waste to make value flow.  In Chapter 3, I will introduce the reader to Six Sigma and present key points related to variability and the significant impact it has on systems.  In chapter 4, I will demonstrate how I have effectively merged the Theory of Constraints with Lean and Six Sigma to achieve maximum improvement to your company’s profitability. As you will see, while TOC works well in isolation, its full power is not realized until it is combined with Lean and Six Sigma.  The same is true for Lean and Six Sigma in that their full value is not achieved until they are combined with the Theory of Constraints.

From that point forward, I will present various case studies where I have used this integrated improvement methodology, which I refer to as [1] The Ultimate Improvement Cycle.  The case studies will clearly demonstrate how this methodology applies to seemingly every industry type.  In one of the case studies, I will explain how it works in a manufacturing environment, while in another case study, I will demonstrate how well this same methodology works in a maintenance, repair and overhaul facility. And in yet another case study, I will demonstrate how it also applies to a healthcare environment.

In the final chapter in this book, I will present something referred to as a mafia offer, which is an offer to potential and existing customers that is so good, they couldn’t possible refuse it.  Closely related to this mafia offer is something referred to as a viable vision, which if used correctly will take your future profits to the level of sales that you have today.

[1] The Ultimate Improvement Cycle has served me well throughout my years in continuous improvement consulting, as well as my time spent in roles as a General Manager of a manufacturing facility and as a VP of Engineering.  I consider myself very “lucky” to have come across the Theory of Constraints as the “missing link” throughout my improvement journey. But as I always say in my books, I wish you much luck in your improvement journey.  But my definition of luck is Laboring Under Correct Knowledge…..you make your own LUCK!

In my next post, I will begin a new series of posts on a new subject.

Bob Sproull 

[1] Bob Sproull, The Ultimate Improvement Cycle – Maximizing Profits Through the Integration of Lean, Six Sigma and the Theory of Constraints, 2009, CRC Press, Taylor and Francis Group, Boca Raton, FL

Another New Book Part 4

In this blog post, I will be continuing to present 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.  In my last post in this series, I continued discussing some of my early learnings gained throughout my career and in this post I will continue along these lines.

As time passed, I felt like there was some kind of missing link in my arsenal of improvement tools, and then it happened.  Eventually, in addition to my basic Lean and Six Sigma training, I studied hard and eventually became a Lean Six Sigma Master Black Belt.  But then the epiphany happened when I learned about the Theory of Constraints (TOC).  I studied hard and eventually became what is referred to as a TOC Jonah.  I had discovered what this missing link was and that something was called the Theory of Constraints (TOC).  Once I learned the details of TOC, my ability to make fast, major improvements jettisoned upward to levels I had not experienced before.  I must say that I was shocked, in that I couldn’t imagine why I had not come across this missing link before.  And as the title of this book suggests, the Theory of Constraints played a pivotal role in how I approach improvement.  As you will see, an integrated TOC, Lean and Six Sigma is the common denominator in all of my case studies presented in this book.

Prior to learning about the Theory of Constraints, it was not uncommon for me to focus on individual parts of processes and improve them.  I assumed that the sum total of these isolated improvements would result in system-wide improvements.  After all, when you improve any part of a process, the system automatically improves. Right?  But as I discovered, after learning about the Theory of Constraints, my assumptions were clearly erroneous!  The sum total of improvements to isolated parts of a system, does not translate into system-wide improvement.  This fact dramatically changed my entire approach to improvement.  The fact is, the only way the system will be improved is by focusing your improvement efforts on that part of the system that is limiting it!

Years later, the same CEO that wanted me to close the plant in Kentucky, called me and asked me to join him at another manufacturing company which produced truck bodies.  This time, my role was to be in charge of their continuous improvement effort.  Needless to say, I accepted his offer, but soon after I arrived, he fired the VP of Engineering and asked me to absorb Engineering into my span of control.  I reluctantly agreed, and to my dismay, I found the Engineering group was in serious trouble.  In trouble because of the length of time in which they completed their engineering work so as to be able to bid on new jobs.  And to make matters worse, the morale in Engineering was in the tank.  In one of the later chapters, I will present what happened at this facility in a case study format.

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

Another New Book Part 3

In this blog post, I will be continuing to present 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.  In my last post in this series, I continued discussing some of my early learnings gained throughout my career and in this post I will continue along these lines.

During my earlier years I had held positions in Healthcare, Manufacturing, Maintenance, Quality, Engineering, and others, and in every position, I was able to take the existing processes and make what I thought were significant improvements to practically all of them.  Back then, I truly believed that the sum total of individual process improvements would translate into improvement to the system I was working in.  As time progressed, I continued my learning and eventually became a Six Sigma Black Belt and then a Lean Sensei, and my improvement effort results kept getting better and better.  I was on top of the world back then, but then a personal epiphany happened for me.

One day, one of my old bosses called me and asked me to come work for him at his new venture where he had assumed the role of the new CEO of a manufacturing company.  When I asked him what my role would be, he simply told me that he had a manufacturing plant in Kentucky that he wanted me to manage.  I was very excited because I had never been in a position where I was the “top dog” in a manufacturing facility.  I had worked for other GM’s in other manufacturing companies, but never had I had full responsibility for the facility’s success.  I immediately said yes to his request and agreed to meet him at this new location.

When I arrived at this new company, we had a closed-door meeting discussing things like this company’s product line, their customer and supplier base and its sorted history.  Things seemed to be going well until I asked him if he had a specific way that he wanted me to manage the facility.  He simply smiled, looked me in the eye and told me that all he wanted me to do was to shut the place down! I was shocked to say the least and at first, I thought he was joking.  But to my disappointment and displeasure, he was dead serious about closing the doors of this manufacturing plant.  When I asked him why he wanted to close this facility, he just smiled again and told me that it was losing way too much money to keep it open.

I immediately pushed back on him and told him that if he wanted me to stay at his company, then he would have to give me a chance to turn this facility around and make it profitable, rather than closing it down. He just laughed and told me that they had already put their company’s best plant manager in charge of this plant, and that he was unable to make a difference, so he doubted that I could make change happen for the better.  Because I insisted on trying to turn the plant around, he reluctantly agreed to let me at least make an effort, with one caveat.  This facility had to be profitable after only three months and if it wasn’t, then I had no choice but to close the doors. In Chapter 7, I will present a case study of what was done and what the ultimate outcome ended up being for this manufacturing plant.

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

Another New Book Part 2

In this blog post, I will be continuing to present 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.  In my first post in this series, I discussed some of my learnings gained throughout my career and in this post I will continue discussing my learnings.

I also discovered that excessive waste exists in every process and unless and until it is identified and removed, real process improvement will not happen.  But having said this, companies should not attack waste in every area within their systems.  The fact is, the focal point for waste reduction activities should be on that part of the system that is constraining throughput.  While there are many forms of waste the most obvious, and perhaps the two most debilitating types are the waste associated with waiting and over-producing.  Waiting and over-production both work to lengthen the overall cycle time.  Just like Six Sigma is at the heart of variation reduction and control, Lean is at the heart of waste reduction.

Another important learning is that how people and organizations are measured will significantly affect their behaviors.  For example, if a company measures operator efficiency and values high efficiency in every step in the operation, then predictably the organization can have very high levels of work-in-process inventory, low levels of quality, and a high incidence of late or missed shipments.  As a corollary to this, maximizing the efficiency of an operation that is limiting throughput is mandatory for maximizing on-time deliveries, revenue and profits!

Another conclusion I reached is that many companies don’t have a clue as to where to focus and leverage their improvement efforts.  While many companies have embraced both Lean or Six Sigma or a combination of the two, in doing so they have essentially attempted to solve world hunger by struggling to improve every operation.  When this occurs, the improvement efforts become prolonged and many times end in frustration. Don’t misunderstand, I am a huge proponent of both Lean and Six Sigma, but they are only one third of the improvement pie.

My final learning is that organizations that fail to involve their work-force, typically do not succeed in the long run.  Everyone within a company must know the goals of the company and how their individual and collective performance might be impacting these goals.  After all of these years, it is apparent to me that the shop floor workers have a vast array of information and ideas, both of which must be sought out, implemented, and harvested.

Unfortunately, many of the companies in the business world of today, don’t practice what I learned throughout my years.  Many companies still use unproductive performance metrics and outdated accounting systems.  Many companies don’t understand, recognize, and capitalize on the constraining operation that exists within their systems.  Add to this, many companies still don’t appreciate that waste and variability encumber their processes and that active involvement of the general workforce is required if they are to successfully identify and reduce it.

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