At the end of my last post I asked why you might think I have such a negative opinion of manpower efficiency and equipment utilization. In past posts I have laid out the basics of the Theory of Constraints, illustrating that if you want to improve the output of a process, you must first identify the constraint or bottleneck resource and then exploit or improve it. The constraint in a physical process is that step which takes the longest amount of time to complete. I’ve also explained that in order for flow to be synchronized, all non-constraint processes must be run at the same speed as the constraint.
When manpower efficiency or equipment utilization are used as the performance metrics to monitor a process, in order to maximize these metrics all process steps must be run as fast as they can. When this happens, the process becomes “clogged” with excessive amounts of work-in-process (WIP) inventory. The impact of this excessive WIP within any process is a deterioration of on-time deliveries as WIP just sits in front of the constraint waiting to be processed.
So does this mean that I believe these two metrics should be abandoned completely? The answer is absolutely not! But what I do believe is that the only place it makes sense to use these two metrics is in monitoring the constraint operation. In other words, the objective should be to increase the efficiency or utilization of the system constraint since it controls the overall output of any process.
In my last post we began our discussion of Step 4a, so today let’s continue with that discussion before we move onto Steps 4b and 4c. As I’ve done in my last few posts, just to refresh your memory on the UIC steps, here are the two figures that represent the Ultimate Improvement Cycle.
The UIC Step 4a Continued
In Step 4a we explained that we must develop our plan on how to elevate the current constraint (if this step is needed) and define appropriate protective controls. I also explained the meaning of “elevating the constraint.” Also included in this step is an analysis of what type of protective controls we must develop to protect the improvements and not lose the gains we have already made. Many times just a simple audit of the process is enough to assure that we maintain the gains. Other times, perhaps a simple control chart of throughput or processing time is sufficient. One thing we learned from TOC is “once a constraint has been broken, we must never allow inertia to cause a system constraint.” What is intertia, in this context? Within any organization in the course of attempting to break the constraint, specific rules or policies are sometimes developed. Do not fail to review these rules and policies to assure their applicability is still relevant. If they aren’t, then get rid of them. Without doing this, these rules and policies could actually become future constraints themselves. The key to understanding inertia is that once the constraint has been “broken” it will immediately move to a new location and we must not become complacent.
The UIC Steps 4b and 4c
In Step 4b, if it is needed, we will elevate the constraint. This is simply the execution of part of the plan we developed in Step 4a. If we need to add capacity to our constraint, then we do so only according to our plan and no more. It is possible, and even likely, that we have already broken our constraint during the first nine steps of this process. If this is the case, then we move to Step 4c. Remember, even if we might have broken the constraint during the first nine steps, we must still review any rules and policies that we might have implemented during this process so as to avoid system inertia. In the final step, Step 4c, we will implement protective controls to make certain that we maintain the gains we have made up to this point.
We have just completed one revolution of the Ultimate Improvement Cycle and in doing so we have most likely increased the amount of throughput passing through our process. What do we do now? We move on to the new constraint and complete the cycle again. Improvement is a journey without a final destination simply because we should never stop the improvement process. What was good enough today will not be good enough tomorrow.
In my next post we’ll move on to a different side of the Theory of Constraints known as the Thinking Processes (TP). As always, if you have any questions or comments, leave a message and I will respond.
Until next time.
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