In my last posting, I introduced you to the basic concept of what a constraint is.
I asked you to look at this simple four-step process and tell me what action you would take to increase the throughput of product and why you would take such an action. Let’s take a look at the four choices I gave you to answer this question and the overall results that have been submitted at the time of this post:
- Run all steps as fast as you can (Selected by 2.99%)
- Balance the line to make all steps have about the same cycle time (Selected by 31.34%)
- Reduce Step 3’s cycle time (Selected by 62.69%)
- Slow down Step 1 (Selected by 2.99%)
Choice 1: “Run all steps as fast as you can” is how the process is being run now with each step running at its maximum rate. In today’s posting I’ll show you why this is not the right choice.
Choice 2: “Balance the line to make all steps have about the same cycle time” is what many Lean practitioners encourage, but there’s a problem with this approach. If every step has the same cycle time, then when one step experiences downtime, the entire line stops producing. I always recommend an unbalanced line because of something referred to as “sprint capacity.” Sprint capacity is excess capacity that exists in the non-constraint process steps that allow them to protect the constraint by being able to produce enough parts even if they experience unplanned downtime.
Choice 3: “Reduce Step 3’s cycle time” is the only way to increase the output of this process, because Step 3 is the constraint. The constraint dictates the output of all processes. In today’s posting, we’ll discuss this in more detail.
Choice 4: “Slow down Step 1” is partially correct in that all steps should be subordinated to the constraint. So what this means is that until Step 3’s cycle time is reduced, all process steps should be running at the rate of 1 part every four hours.
Now let’s get back to our discussion.
Finding the Constraint
Unlike the piping diagram in my last post, where most people see right away that Section E’s diameter must be enlarged, many people have difficulty making the connection between the time required to process product in Step 3 and the throughput rate. In fact the only way to increase the throughput rate is to reduce the time required to process the product in Step 3. In other words, Step 3 is the equivalent of Section E of the piping diagram. And because Step 3 limits the output, it is designated as the constraint for this process. Let’s see what the implications of this concept (i.e. the constraint) are on an improvement effort.
Implications of the constraint in improvement?
Suppose someone comes to you with an improvement idea that would reduce the time it takes to complete Step 1 from 60 minutes (1 hour) to 30 minutes. Let’s say that this idea costs your company $1,000 to implement. If you were the manager responsible for this process, would you approve spending $1,000 or not? The question that must be answered is: Would there be an acceptable ROI for this expenditure?
My question to you would be: "Does this improvement idea increase the output of this process?" Because Step 3 is the constraint which controls the output of this process, the answer to this question is, no, it would not increase the output. The key point to remember is that only time reductions in Step 3 will have any impact on the throughput of this process. So let’s look at the possible implications of not identifying the constraint in any process or system.
Negative consequences of producing at full capacity
Many companies use the performance metric Manpower Efficiency to judge the performance of their company’s resources. Or in the case where equipment is used to produce a company’s products, maybe Equipment Utilization might be the metric of choice. These companies have been taught that, in order to be profitable, high levels of efficiency or utilization must be achieved. But what happens within processes when companies pursue high efficiencies or utilizations? Let’s look at our 4-step process again.
Staying with our simple 4-step process, we’ve identified Step 3 as the constraint and we’ve concluded that only reducing its time would result in more output. If you’re using Manpower Efficiency or Equipment Utilization to measure how well your process is performing and you believe in driving these metrics higher, then you would instruct each of the four steps to run to their full capacity. This translates into Step 1 producing one part every hour and passing each one on to Step 2 which has one half of the capacity of Step 1. Likewise Step 3 has one half the capacity of Step 2 and one quarter the capacity of Step 1. So what happens to this process if every step runs to its full capacity?
Here is what this process looks after the first eight hours of production (the red squares represent items that are "Work-In-Process (WIP)." Step 1 has processed eight items, but because Step 2’s processing time is twice as long as Step 1’s, it can only process four of those eight items. And because Step 3 can only produce one part every four hours, in the eight hour time period, only two pieces have been processed to completion. Now for a couple of new questions:
In my next posting we’ll discuss the dangers in running all steps at full capacity and then look at how fast the process steps should be running. We’ll also provide a link to the observations I asked you to make about your own processes.
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