Manufacturing Breakthrough Blog

Integrating Lean Six Sigma and TOC Part 4

Friday May 15, 2015

Review of the Basics of TLS

In my last three posts we briefly discussed the three components of the TLS improvement methodology, Lean, Six Sigma and the Theory of Constraints.   My message here is clear, in that while I am an avid supporter of both Lean and Six Sigma, my concern is that using either or both of these methodologies in isolation from TOC will not deliver the most optimal results. I finished my last post with an introduction to TOC’s basic improvement methodology consisting of five focusing steps. I also presented three critical questions that must be answered if your improvement initiative is going to be successful:

  1.     What to change?
  2.     What to change to?
  3.     How to cause the change to happen?

Let’s now focus on how we answer these three critical questions by expanding on Dr. Goldratt’s five focusing steps.[1] 

The Five Focusing Steps

Just to refresh your memory, here are Goldratt’s five focusing steps:

  1. Identify the system’s constraint(s).
  2. Decide how to exploit the system’s constraint(s).
  3. Subordinate everything else to the above decision.
  4. Elevate the system’s constraint(s).
  5. If in the previous steps a constraint has been broken, go back to step 1, but do not allow inertia to cause a system constraint.

Let’s now discuss each of these steps in a bit more detail. 

  • Step 1:  Identify the system constraint(s). Just as a chain has a weakest link, there will always be a resource of some kind that limits the system from maximizing its output. In order to improve the system’s performance, it is imperative that you locate this weakest organizational link and focus your improvements there. It’s important to understand that there is a logistical “value chain” of mutually supportive processes and operations in every company or manufacturing facility. Included within this value chain is the organization’s weakest link that limits the performance of the total organization. And while it may not be obvious to you, when you are looking for a starting point in any improvement initiative, it should always be the system’s constraint because it offers the greatest opportunity to increase profits in a relatively short period of time. Whether your constraint is a flow problem, a quality problem, a capacity problem, or a policy problem, it should be identified as the area on which to focus your efforts. This first step answers the question of “What to change?”

 

  • Step 2:  Decide how to exploit the system’s constraint(s). Once you have identified the link in the organizational chain that is limiting throughput, you must now decide how to take advantage of or “squeeze the most out of it.” For example, if the constraint is one of the steps in a manufacturing process that is limiting the output of the entire process (i.e. a bottleneck), you must take all necessary actions to improve the rate at which parts flow through this bottleneck.” If we don’t increase the rate through the bottleneck, then throughput will not increase! It’s really that simple. By increasing the flow of product through the constraint, you automatically improve the system throughput which translates into more revenue and more bottom line dollars. This second step answers the question of “What to change to?”

 

  • Step 3:  Subordinate everything else to the above decision. This is one of the most important steps in terms of resource utilization, with resources in this context being non-constraint operations, people, etc. The non-bottleneck resources should work only at the same pace as the constraint operation, neither faster nor slower. If the non-constraints are permitted to run faster than the constraint, then the result would only be excess in-process inventory and prolonged cycle times. If they are permitted to run slower than the constraint, then the output of the constraining operation might be jeopardized as would the organization’s throughput. This subordination step is where most companies attempting to embrace and implement TOC have failed. Your organization must be totally committed to subordinating all other resources to the constraint operation or you won’t realize all of the potential throughput gains (and profits) that are possible.

 

  • Step 4:  Elevate the system’s constraint(s). If the actions taken in Steps 2 and 3 don’t break the constraint, then you will be forced to take other actions on the constraint itself. These actions could include using additional shifts, additional overtime, adding additional resources (e.g. equipment or people) or, as a last resort, radically changing the process through things like automation or even a new product or process design. While Steps 3 and 4 answer part of the question of “How to cause the change to happen?” it doesn’t provide enough insight as to what must be done.

 

  • Step 5:  If in the previous steps a constraint has been broken, go back to Step 1, but do not allow inertia to cause a system constraint. The aim of the first four steps of this process are focused on breaking the organizational or system constraint, but once this has been accomplished, the location of the constraint will change.  Goldratt warned not to allow inertia to cause a system constraint, but what did he mean by this phrase?  He inserted this to warn you not to become complacent and to guard against “back-sliding.”   Continuous improvement is a never-ending journey, so it’s important to stay focused and move your improvement efforts to the new constraint location when the constraint moves.   And it will move when the current constraint is broken.

 

There are other principles and tools within the body of the Theory of Constraints, but for now, this is all we need to begin our discussion on how to combine TOC, Lean and Six Sigma.

 

Next Time

In my next post we will begin our discussion as to what this integrated methodology looks like, including the basic steps and some of the key tools we will use.  As always, if you have any questions or comments, leave a message and I will respond.  Thanks for reading.

Until next time,

Bob Sproull

 

References:

[1]  Goldratt, Eliyahu M. and Jeff Cox, The Goal (Great Barrington, MA: North River Press, 1986)

 

 

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