Maximizing Profitability Part 6

In Part 5 I asked everyone to think about what this improvement methodology might look like. The figure below is a visual of what this integrated methodology looks like and over the next few entries, we’ll walk through how it all works.

This integration weaves together the DNA of Lean and Six Sigma with the focusing power of the Theory of Constraints to deliver a powerful and compelling improvement methodology. All of the strategies, principles, tools, techniques and methods contained within all three methodologies are blended together and then time-released to yield improvements that far exceed those obtained from doing these three improvement initiatives in isolation from each other.

The Ultimate Improvement Cycle (UIC) is not simply a collection of tools and techniques, but rather a viable manufacturing strategy that focuses resources on the area that will generate the highest return on investment. The UIC is all about focusing on and leveraging the operation or policy that is constraining the organization and keeping it from realizing its full financial improvement potential.

In the figure below I have laid out the tools and actions you will use and perform at each step of the UIC. As you can see, there are no new or exotic tools being introduced. Instead, in creating the UIC, one of my objectives was to keep things simple.  Please keep in mind that there are other tools available that can be used to drive this improvement engine.  My point here was to list some of the more common ones.

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

1. It guarantees that you are focusing on the correct area of the process or system to maximize throughput and minimize operating expense and inventory.
2. It provides a roadmap for improvement to ensure a systematic, structured and orderly approach to improvement to maximize the utilization of your improvement resources.
3. It integrates the best of Lean, Six Sigma and TOC strategies to maximize your organization’s full improvement potential.
4. 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.
5. It facilitates the synergy and involvement of the entire organization needed to maximize your full return on investment.

In the next post, I will lay out the expected deliverables associated with this integrated methodology and then begin to discuss, in more depth, each step required to achieve these five primary objectives.