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Welcome to Epicenter Development Group's newsletter EPICentral. The purpose of this newsletter is to highlight fundamental ideas that have helped organizations develop and maintain great manufacturing and service operations. We hope that you find our EPICentral newsletter helpful and would welcome your comments on its content.
You Can't Work on Everything at Once . . . So Don't Try
Today's business must focus on improving those things within their operations that have the greatest impact on their bottom-line. The Theory of Constraints (TOC) is an operations philosophy which can be used on a regular basis to identify and "break" a company's current constraining factor (bottleneck). Although a constraining factor could apply to cost, flexibility and quality issues, this article focuses on how TOC is used to specifically improve a company's operating capacity.
The analogy of a chain is often used to describe the Theory of Constraints principles.
The strength of a chain is defined by the strength of its weakest link. The slowest operation in the value-stream will dictate the system's throughput. This is often referred to as the system bottleneck.
Strengthening any links other than the weakest link, will not improve the overall strength of the chain. Improving any operation other than the bottleneck will not improve throughput.
Once the weakest link has been strengthened, a new weakest link will appear. A new system bottleneck will emerge once the existing bottleneck has been improved, and it is no longer a system constraint. This leads to a cycle of continuous improvements as the current bottleneck is systemically identified.
Goldratt's Five Focusing Steps
Goldratt, the founder of TOC, outlines five focusing steps for "breaking" system constraints:
1. Identify the Constraint - Before making improvements, identify the system bottleneck. Typically, in a manufacturing plant, this is the area where large amounts of work-in-process inventory are waiting to be processed.
2. Decide How to Exploit the Constraint - Make the operation as efficient as possible without additional capital investment. This could include running the operation during lunch periods, presorting incoming materials for quality problems, reducing changeover time, or performing after-hours preventative maintenance to minimize unplanned downtime. Try to eliminate any idle time during this operation.
3. Subordinate Everything Else to the Decision in Step 2 - Let the bottleneck set the pace for all other operations. This may seem counterproductive to the current philosophy of optimizing labor efficiency and equipment utilization in all areas, but it is necessary to focus attention and "free up" resources towards improving the current bottleneck operation.
4. Elevate the Constraint - If, at this point, the identified bottleneck operation is still the system constraint, it will be necessary to elevate its capacity. This can be accomplished through traditional methods (purchase additional equipment, run the operation on additional shifts, add labor, etc.).
5. Go Back to Step 1, but Avoid Inertia - Now that the bottleneck is no longer the throughput constraint, it's necessary to re-evaluate the system and identify the new bottleneck. This is a continuous process; avoid the urge to stop efforts once a constraint is "broken."
NEXT STEPS
If you would like more information on the Theory of Constraints, contact Bill Proctor at wproctor@epicentergroup.com or 216-702-0952. There are also a number of books that have been written about TOC that are available at http://www.Amazon.com. And, you can find previous issues of EPICentral at Newsletters.
The seminal book, The Goal, is a fast and enjoyable read that introduces the concepts of Theory of Constraints as a parable. For those that want to dive into everything that TOC has to offer, H. William Dettmer has also written some books (Breaking the Constraints to World-Class Performance and Goldratt's Theory of Constraints) that talk about how TOC can be used within organizations.
Mr. Proctor also speaks on a variety of problem-solving and system design topics that can help companies significantly increase the success and profitability of their businesses. If you are interested in having Bill speak at one of your upcoming meetings/events or would like more information on any of the speaking topics, please visit Speaker Services or you can email Robin Milicia at Rmilicia@epicentergroup.com.
ABOUT EPICENTER DEVELOPMENT GROUP
Epicenter Development Group is an independent consulting firm that specializes in partnering with manufacturing and service firms to improve or expand their operations or relocate to more suitable facilities. We do this by integrating world-class system philosophies with traditional industrial systems engineering and organizational design tools and techniques - a process that we call GreenRoom Engineering. Through the use of GreenRoom Engineering, we can create breakthrough solutions for our clients in a fraction of the time required by traditional engineering methodologies.
The founder of Epicenter Development Group, William (Bill) Proctor, has a bachelors degree in Industrial Systems Engineering from The Ohio State University and a masters degree in Organizational Development and Analysis (with distinction) from The Weatherhead School of Management in Cleveland, Ohio. In addition to his technical degrees, he also has accumulated twenty years of experience working within the manufacturing and service industries, has taught and presented papers on a variety of technical and non-technical subjects and is a registered Professional Engineer in the state of Ohio.
To learn more about Epicenter Development Group, visit our homepage at www.epicentergroup.com.
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This newsletter is developed and published by:
Epicenter Development Group, LLC
12111 Chippewa Road
Brecksville, OH 44141
216.702.0952
www.epicentergroup.com
wproctor@epicentergroup.com
Copyright 2006, Epicenter Development Group
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