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Quick Note: Theory of Constraints and Six Sigma November 24, 2013

Posted by Tim Rodgers in Process engineering, Quality.
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Last week I attended the monthly meeting of the Northern Colorado chapter of the American Society for Quality. The featured speaker was Dr. Russ Johnson, President of Improvement Quest, a local management consulting firm. Dr. Johnson’s talk “Creating a Culture of Harmony by Using the Theory of Constraints Concepts to Focus and Integrate Lean and Six Sigma” included several interesting insights about to effectively integrate these strategies in a production environment.

Of course the key to successful implementation of the Theory of Constraints is identifying the bottleneck, or constraint, in the production process and then optimizing the rest of system around the constraint (“exploit, subordinate, elevate”) in order to maximize overall throughput while controlling inventory (including work-in-progress, WIP) and operating expense. At the risk of oversimplifying, Six Sigma can be described as “reduce variability,” and the lean philosophy is essentially “eliminate waste.”

These strategies are not different ways of solving the same problem. They can and should be implemented as elements in an integrated improvement effort. The trick is understanding that not all processes are equally good targets for a six sigma or lean improvement plan. It depends where the process is in relation to the constraint.

Any yield improvement or waste elimination that occurs upstream from the bottleneck doesn’t improve throughput because it effectively increases the input to the bottleneck that is already limited. In fact, it can be detrimental to the operation as a whole if it increases WIP and associated costs for material and operating expenses. The focus should be on downstream processes where yield improvement or waste elimination effectively increases the capacity of the constraint. Scrap or rework that occurs after the constraint is especially damaging because it essentially requires another pass through the constraint.

The point is that you can’t assume that all improvements at the micro level are equally beneficial at the macro level. Yes, generally there’s value in reducing variability and eliminating waste, but when your resources are limited and you have to focus, consider the constraint and whether your improvements are really improving the metrics that matter.

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Comments»

1. Philip Marris - September 28, 2014

Dear Sir,

Do you know if it is possible to get an URL access to Russ Johnson’s “TOC + LSS” presentation slides ? I have tried but the ASQ website seems to block non members.

Regards,
Philip Marris
Paris, France

Tim Rodgers - September 28, 2014

Hello Mr. Marris:

Unfortunately I don’t have the presentation slides, either. You might try contacting Dr. Johnson directly at improvementquest@aol.com.

Best regards,

Tim


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