Maximizing Profitability Part 9

(Note: For a complete listing of steps in the UIC, refer to Parts 6 and 7 of this series.)

In my last blog posting we discussed how to find waste and variation and finished with an explanation of different types of variation. When Goldratt introduced the world to his Theory of Constraints, he did so by laying out his five focusing steps. His second of five steps was to decide how to exploit the constraint or in other words, how to wring the maximum efficiency out of the constraint. Not just maximizing the efficiency, but because the constraint dictates the performance of the organization or more specifically dictates the system throughput, how do we maximize our throughput. In step 2a we will develop our plan on how to exploit the constraint.


My advice to you is very straight forward, if you want your plan to be executed, then keep it simple! Probably many of you have project management software, but I have seen many teams get bogged down in the details of the plan and end up with a failure to launch! Please don’t let that happen. Keep it simple, direct and easy to understand and it will be executed. Many times I simply used a Word Table or an Excel Spread Sheet because they’re easy to use and update. Keep the plan visible in or near the constraint since that’s where most of the action will be.

Ok, so what should be in the plan? At the end of this blog I have posted an example of a simple plan that you can use as a guide. You already know what you’re going to attack, based upon what you found or discovered in Steps 1b and 1c, so your plan will be built around your findings.  The example in this blog is only a sample of part of a plan I developed for a company. It is only intended to give you an idea of how simple your plan should look like.

As you can see, the Constraint Improvement plan is simple, uncomplicated, straight-forward and follows the actions prescribed in the Ultimate Improvement Cycle. Also notice that there aren’t details on how things like the DOE will be performed or what will happen during the 5S. This plan is simply intended to be a document that will be used to define the required activities, expected outcomes, who is responsible for making things happen, and reviewing progress against each of the action items. Each one of the teams will develop there own detailed plan, so again, don’t make your Constraint Improvement Plan overly complicated and be sure to use it for its intended purpose. I have seen so many examples where teams spent an inordinate amount of time on developing the plan at the expense of its execution. Review your plan on a regular basis and make it visible for everyone to see.

Two final points regarding the improvement plan. The first point is that the order in which you plan and execute is strictly a function of the current status of your operation. For example, if you have a major problem with equipment downtime, then activities aimed at reducing downtime should be included in the early stages of your plan. If you have problems related to defective product, then your early efforts should be focused here. The point is, there is no cookie-cutter approach or step-by-step recipe for the order in which activities are planned and executed. It is all dependent upon your own situation and status.....your own current reality.

The second point to remember is that you must involve the right players as you develop the improvement plan. The most important members of the team are the hourly operators that will be responsible for operating the new process and making product when the new process is ready. Operators are so often left out of planning activities when in fact they are the people with the most information……the true process experts. My advice is very clear-cut, if you want your plan to work, then you better involve the operators. In addition, the operators must be provided assurance that they are not planning themselves out of a job. The worst possible thing that can happen is that as cycle times are reduced, or defects and downtime are eliminated, people get moved out of their jobs or, worse yet, laid off. If this is your strategy, then I suggest that you stop right now because it’s a strategy for disaster. If this were to happen even one time, you will lose your sense of team and the motivation to improve, so do not lay people off! I realize that business conditions can change or the economy can take a downturn and that there are times when you simply can’t avoid layoffs, but if people sense that the reason their fellow workers are losing their jobs is because of improvements to the process, then improvements will stop immediately.