The Integrated Improvement
In my last two postings we discussed the first two components of the TLS improvement methodology, Lean and Six Sigma. I told you that I am an avid supporter of both Lean and Six Sigma, but my concern is that using either or both of these methodologies in isolation from TOC will not deliver the most optimal results. In today’s posting, we will discuss the last component of TLS, the Theory of Constraints Improvement Cycle.
As I have told you in previous posts and videos, TLS is the acronym for our integrated Theory of Constraints, Lean and Six Sigma improvement methodology. Like the Lean and Six Sigma Improvement Cycles, I absolutely believe in everything that the Theory of Constraints Improvement Cycle brings to the table, but like Lean and Six Sigma, if TOC is used in isolation from the other two components, the improvement results obtained will be much less than they could or should be.
The Theory of Constraints (TOC) is a methodology used to identify the most important limiting factor (i.e. the system constraint) that stands in the way of companies moving closer to its goal. And the goal of most for-profit companies is to make more money now and in the future. The over-arching theory behind TOC is to systematically improve the constraint until it is no longer the limiting factor. In manufacturing, the constraint is often referred to as a bottleneck.
TOC’s role in the TLS improvement cycle is to identify the focal point for the improvement effort. While TOC provides the needed focus (i.e. the constraint), Lean acts to reduce waste and improve the flow of products through the process. And while Lean is doing this, Six Sigma’s role is to reduce unwanted variation, control the remaining variation and identify and remove defects.
The Basics of the Theory of Constraints
Knowing what to change, what to change to and how to implement change is usually the determining factor as to how successful an organization will be in the future. While change is necessary, it isn’t always so clear-cut. In fact, in an effort to reinvent themselves, many organizations have attempted improvement initiatives like Lean Manufacturing and Six Sigma, but have failed to achieve the positive results they had expected or at least hoped for. Guess what, there’s a simple reason for this.
Based upon my experiences, in a variety of organizations and industries, the disappointing results coming from Lean, and sometimes Six Sigma, are directly linked to failing to adequately answer the question, “What to change?” or, worse yet, failing to ask it at all. Deciding what to change cannot be done casually, in some chance manner. It must be addressed logically at the strategic, tactical and operational levels after careful deliberation and analysis. The roots of this disillusionment are manifested in ill-advised efforts wasted on local improvements that fail to achieve global or system improvement. This is where TOC enters the picture, by answering this first question of what to change?
In the 1980’s Eliyahu Goldratt introduced us to his Theory of Constraints (TOC) through his highly successful and widely read business novel, The Goal . Goldratt explained to us that systems are composed of interdependent processes and functions which he equated to a chain. Every chain has a weakest link and in order to strengthen the total chain, you must identify, focus on and strengthen its weakest link. Any attempts to strengthen the other links will not result in a stronger chain because it will still break at the weakest link.
Goldratt 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. 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.
Goldratt developed his own improvement methodology which consisted of the following 5 steps:
- Identify the system’s constraint(s).
- Decide how to exploit the system’s constraint(s).
- Subordinate everything else to the above decision.
- Elevate the system’s constraint(s).
- 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.
These five steps form the basis for TOC’s contribution to continuous improvement.
In my next posting we will continue to discuss the Theory of Constraints Improvement Cycle and then we’ll begin to integrate TOC, Lean and Six Sigma. As always, if you have any questions or comments about any of my postings that you would like me to respond to, just leave me a message in the message box and I will respond. Until next time.
 Goldratt, Eliyahu M. and Jeff Cox, The Goal (Great Barrington, MA: North River Press, 1986)
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