Leading ERP software for growing manufacturers

Manufacturing Breakthrough

BLOG

Integrating Lean Six Sigma and TOC Part 8

Integrating Lean Six Sigma and TOC Part 8

By Bob Sproull

The Answer

At the end of my last post, I asked you why, in step 2a of the Ultimate Improvement Cycle, you think it might be important to develop your plan to exploit the current constraint. The answer to this question might appear to be obvious, but it isn’t to many people.  The fact of the matter is, if your improvement plan is not well thought out, with specific details of the action steps you intend to take, it’s quite possible that you will wander around aimlessly working on those “unimportant things” that may or may not deliver true and lasting improvement.

Short Review

In my last post we began our discussion of Steps 2a, 2b and 2c, so today let’s finish that discussion and then move onto Steps 3a, 3b and 3c.  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 Steps 2a, 2b and 2c continued

In my last post I presented thirteen benefits you should realize if you have successfully developed and executed your improvement plan.  The impact of these improvements should necessarily translate into more productive capacity in the constraint operation which will then be converted into improved throughput, higher revenues and increased margins. Remember, all of this will be taking place primarily in the constraint operation for now, unless an upstream process is starving the constraint operation or a downstream process is causing scrap and/or rework of the constraint’s output.

It is absolutely imperative that there is constant and synergistic collaboration between the resources focused on the waste reduction activities and the resources focused on the variation and defect reduction activities. Both sets of resources will make process changes that could impact the other’s activities. I can’t emphasize the communication piece enough! If you are a company where Lean and Six Sigma are being implemented by the same person, then you will automatically consider all changes together. Again, planning is critical to the success of the improvement initiative, so proposed changes should be fully discussed up front before they are actually implemented and this dialogue should take place in Step 2a if the proposed changes are known.

Before going any further, I want to reinforce an important point regarding improvements in non-constraint operations. Because the constraint operation dictates the throughput rate of the plant (or a specific process), we must do everything possible to protect the output of the constraint operation. Protection, in this sense, includes problems occurring both in downstream operations that could be negatively impacting total throughput (e.g. scrap, rework, etc.) and in the upstream processes that could starve the constraint. It would make little sense to make significant quality improvements in the constraint operation only to have the constraint products scrapped in a downstream non-constraint process step. Likewise, it would also make little sense to make processing time reductions in the constraint operation only to have the constraint starved by an upstream process. For this reason, part of our analysis and action plan must also include downstream and upstream opportunities if they are seen as potential threats to the constraint. Remember, throughput is not achieved unless new money enters the company, so if we are losing or scrapping even a single product in a downstream operation, our throughput and corresponding profits will be limited by the amount of the loss. The same can be said of an upstream process starving a constraint due to unplanned downtime, quality problems, etc.

The UIC Steps 3a, 3b and 3c

Because Step 3 is so significant, we will spend more time on it than we did on the first two steps.  In Step 3a we will plan how to subordinate non-constraints to the current constraint. In so doing we must now effectively “slow down” or limit our non-constraint operations’ output to the same rate as our constraint operation. Otherwise we will continue building inventory in front of our constraint! Subordination in its simplest form simply means that we will produce product at the same rate as the constraint operation, no slower, no faster.

According to Debra Smith [1], “Mastering step three, subordination, is the key to succeeding with TOC. Mastery of step three is dependent on a methodology of aligning measures, performance objectives, strategies, and policies to support maximizing return on investment. Return on investment is centered on understanding the interdependencies of the constraining resources and the rest of the organization.” I couldn’t agree more with Smith as it is beyond a doubt one of the keys to the success of any TOC-based improvement initiative such as the UIC.

Like Step 2a, Step 3a is a planning step in which we must evaluate the non-constraints and look for opportunities where we might be able to do things like “off-load” some of the work from the constraint to one or more of the non-constraints. We will look upstream and downstream for these opportunities, so we must be very thoughtful and methodical as we develop this plan. In doing so, however, we must exercise caution in this step because we must make certain that we don’t turn a non-constraint into a constraint. In addition, as we’ll see later, contrary to what many production managers believe, having a perfectly balanced line (i.e. all cycle times equal) is simply not a good thing.

A question to ponder

In today’s post I told you that having a perfectly balanced line (i.e. all processing times for all steps are equal) is not a good thing.  Why do you think this might be a true statement?

Next time

In my next post we will continue our discussion of Steps 3a, 3b and 3c.  As always, if you have any questions or comments, leave a message and I will respond. 

Until next time.

 

Bob Sproull

References:

[1] Debra Smith, The Measurement Nightmare: How the theory of constraints can resolve conflicting strategies, policies, and measures, CRC Press, LLC, Boca Raton, FL, 2000

 

 

 

 

Bob Sproull

About the author

Bob Sproull has helped businesses across the manufacturing spectrum improve their operations for more than 40 years.

facebook-icon facebook-icon linkedin-icon linkedin-icon twitter-icon twitter-icon blog-icon blog-icon youtube-icon youtube-icon instagram-icon instagram-icon Bookmark this page Google +