In my last post we presented the first four Prerequisite Beliefs (PB) that I believe are absolutely necessary for creating a true, positive and lasting environment for change. These first four PBs were as follows:
- PB 1: Believing that leveraging the constraint and focusing your resources on the constraint is the key to improved profitability.
- PB 2: Believing that it is imperative to subordinate all non-constraints to the system constraint.
- PB 3: Believing that improving your process is a never-ending cycle.
- PB 4: Believing that involving your total workforce is critical to success.
In today’s post we will continue presenting our ten prerequisite beliefs that I believe must be embraced if true positive and lasting change is to be achieved.
Prerequisite Beliefs (PB)
PB 5: Believing that abandoning outdated performance metrics like efficiency and utilization, reward or incentive programs, and variances is essential to moving forward.
Manpower efficiency, equipment utilization, incentives, and variances are all counterproductive unless they are measured within the confines of the system constraint. So the fifth prerequisite belief in preparing for the implementation of the UIC that must be accepted is abandoning outdated performance metrics, incentives, and variances. Looking back at my improvement experiences in a variety of industries, this has been one of the most difficult PBs to embrace simply because of the “death grip” traditional cost accounting has on organizations. If you are unwilling to fully embrace this prerequisite belief, do not attempt to use the UIC.
The next two PBs should be considered together because they both impact each other profoundly.
PB 6: Believing that excessive waste is in your process and that it must be removed.
PB 7: Believing that excessive variation is in your process and that it must be reduced.
The sixth and seventh prerequisite beliefs that must be accepted by your entire organization involve waste and variation. You must accept the premise that every process contains both excessive amounts of waste and variation that are waiting to be identified, removed, and reduced. No matter how perfect you might believe your process is, believe me, it has variation and it is full of wasteful activities. Your job will be to locate, reduce, and hopefully eliminate the major sources of both.
Variation corrupts a process, rendering it inconsistent and unpredictable. Without consistency and control you will not be able to plan and deliver products to your customers in the time frame you have promised. Waste drives up both operating expense and inventory, so improvements in both of these ultimately go directly to the bottom line as you improve the throughput of your process and more specifically your constraining operation.
But with these two PBs, comes words of caution. Although you will observe waste and variation in your non-constraint operations, for now focus your resources only on the waste and variation negatively impacting your constraint operation.
In my next post we will complete our discussion on my ten Prerequisite Beliefs needed to create the environment for change.As always, if you have any questions or comments about any of my posts, leave me a message and I will respond.
Until next time.
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