As an individual you are your first business, and as your first business you must realize that continued adjustment and change is part of succeeding. Problems will always arise do to the change around you and your ability to accommodate the changes required can be made easier with a few simple steps. One of the strengths of the Theory of Constraints is its focus on continuous improvement. Business by nature is constantly changing and any process that recognizes this dynamic is in my opinion one to follow. If you are looking to increase your bottom line keep reading. The five focusing steps were derived to identify the single conflict in a business that inhibits throughput of the facility and if applied correctly can increase profits for little to no cost.
The five steps are;
- Identify the constraint
- Exploit the constraint
- Subordinate to the constraint
- Elevate the constraint
- Go back to step one
To give you an idea of the effectiveness, steps 1,2, and 3 come at no cost and can often times increase throughput by 60%. Think about that for a second… if you could increase the throughput of your company without laying down a dime would it be worth the investment? Of course it would! This is made possible by the inherent simplicity that exists within any “complex” system. Keep in mind that this works as effectively on a personal level just as it does on an organization level.
The first steps concern the capacity that already exists within a system and work to fully exploit what currently exists.
Identifying The Constraint
The constraint within a system will be a single assumption or conflict that is the root cause to your pain and heart ache. If you can identify this single element you will be well on your way to a better reality. If the conflict is not initially apparent a logical tool known as the thinking process can be used to derive the core issue. The conflict consists of two mutually exclusive pressures pulling in opposite directions. An example in a production environment may be recording the status of each part as it moves through processing or pushing items though as quickly as possible and not recording their status. There is pressure for both cases but the status is either recorder or it is not. This push and pull has a trickling effect which will cause many other issues in a system, the other issues however are symptoms of the root conflict. Individuals that have intuition of their system will know inherently what the constraint of their system is. Over time they will have seen one area in which throughput is constantly held up.
Exploit The Constraint
With the constraint identified it becomes possible throttle production. The constraint is the limiting factor of the facilities output so it becomes a single point of control for the entire system. Exploiting the constraint simply means using the constraint to its full capacity. If the constraint is a CNC in a machine shop, and every part that is shipped must pass through that CNC, that CNC should be running as close to 100% of the time as possible. If this means alternating operators over a lunch period than so be it, as the constraint it should see as little down time as possible.
Subordinate To The Constraint
As in the example above if the constraint is a piece of machinery we want to make sure everything else in the facility takes second seat to the constraint. This means that the constraint should never be waiting one a prior process. All prior processes are scheduled such that the constraint is running 100% of the time. The constraint is the pull for all prior processes and the push for all post processes. In the TOC community it is referred to as the “Drum” in “drum buffer rope”. The drum sets the pace and all other processes before and after the constraint follow the beat.
Having a single point of control such as this can be huge for any organization. Due date performance will increase and as we will see in another post lead time can be greatly minimized. I said it before but I will say it again because it is worth repeating, these first three steps will cost an organization NOTHING and on average result in a 60% increase in throughput.
Elevate The Constraint
Once the system is conditioned to operate around the TOC methodology stated above the constraint can be elevated. This will require financial commitment but one that is easily justified. In the machine shop discussed previously an additional CNC may be the solution, or perhaps adding additional cutting heads would do the trick. Whatever the case the constraint is still limiting the throughput of the facility and increasing it will increase throughput. Be careful at this point, elevating the constraint without keeping the rest of the facility subordinated will only move the constraint and bring you back to square one. If need be, increase the capacity before and after the constraint to maintain the constraints location.
Go Back to Step One
In some cases a constraint will be eliminated completely in which case it becomes necessary to go back to step one. It is also required to go back to step one if the constraint is moved. Say for example a semi-conductor plant can easily escalate all pieces of machinery except one. It may be desirable to increase capacities and move the bottle neck until the machine that is not easily elevated becomes the constraint.
Hopefully you can see how these steps can bring about great improvement in almost all situations. These steps maintain the idea of ongoing improvement and can have a significant influence on even the most complex system. Profit margins can be increased and lead times diminished.