Beat the Bottleneck (2)

April 5th, 2013

For those of you who enjoyed “Beat the Bottleneck”, here’s how we apply it in practice.  It is called applying the “Theory of Constraints”.  Any constraint can slow things down, but there will always be one constraint that limits your throughput.  And it doesn’t matter whether your throughput is measured in items made, invoices produced or teeth filled: this is your bottleneck or key constraint.  The “Theory of Constraints” states:

1.  Identify the key constraint (the bottleneck)
2.  Exploit the constraint i.e. keep it loaded so it’s not having to wait for the next item.
3.  Subordinate resources to the constraint – give it priority so it’s always in use.
4.  Elevate the constraint i.e. by expanding it, duplicating it etc. (but only after steps 2 & 3)
5.  Address the next constraint (as by this time this first constraint will no longer be the bottleneck.)

The Theory of Constraints goes further, but one really important fact is that effort put in to improve the bottleneck gives the best return.  It is argued that working on constraints that are not the bottleneck is pure waste, or at best provides a very limited return.

Can you identify your bottleneck, or do you need help with this?

 

Beat the Bottleneck

April 4th, 2013

Thanks to Bill Waddell for this while he was with the Manufacturing Leadership Center:

“An article in The Manufacturer – a rather pedestrian article for that matter – describes the traditional thinking management choices in a tough economy.  Titled “Cost Cutting is Top of Company Agendas in 2013” it asserts that “82% of manufacturing CEOs will implement cost cutting this year”.  Said the ‘expert’ they quoted, “We know that implementing or continuing cost-cutting initiatives disrupts operations and moral, but during these times, is a painstaking necessity.”

Nuthin’ we can do about it, our hands are tied, disrupting “operations and morale are a painstaking necessity”.

True story: Last year the staff at a $30 million or so manufacturer got some Theory of Constraints training.  After it was over they sat around and talked about it for a few minutes, and concluded that their constraint was at a particular machine.  So the head guy went down to the factory floor and talked to the fellow working on that machine.  He found out that there was another guy who ran the machine when the primary operator was gone, and that back-up guy was busy but was working on a non-constraint machine and generally not under a great deal of stress.  The boss asked them if they thought they could stagger their breaks so the back-up guy could keep the constraint machine going while the primary guy was away.  The two guys said they thought they could.

Voila!  The machine ran eight hours a day, instead of seven with no increase in cost whatsoever.  In fact, a few days later the two guys approached the boss and said they were willing to stagger their start and stop times.  Instead of both working from 7:00-3:00, one of them would work from 6:00-2:00 and the other would work from 8:00-4:00. The boss said OK.  Voila! Again:  Ten hours of production per day instead of seven, all at no additional cost.

In reality the factory only got 8% or so additional throughput without any increase in cost because these two guys had blown up the constraint to effectively that the machine was no longer the constraint in the process.

As simple as this example is, it really is not that unusual when management learns how things like the Theory of Constraints and demand pull actually work – when the light bulbs click on and they look beyond the accounting myopia on labor efficiency without regard to flow.

Of course these sorts of improvements are only valuable when accounting and sales understand how the economics of manufacturing really work and can price the excess capacity to sell.

Assuming that morale busting cost cutting (read: Layoffs) are a necessity is really intellectually lazy.  There are so many options – far better options – that are much better for everyone concerned. But you can’t take advantage of them if you aren’t looking for them.”

PS: It works.  I have done it at GSK and AstraZeneca.

Received Culture

April 4th, 2013

Thanks to the The Manufacturing Leadership Center for this:

“In 1967 a researcher at the University of Wisconsin by the name of Gordon R. Stephenson wrote about an experiment in which he went a long way toward explaining why the ‘we’ve always done it that way’ syndrome is so strong.

His purpose was to determine “whether the learned avoidance behavior of a conditioned monkey toward a conditioned object could induce a lasting effect on a second monkey toward the same object”.

His experiment went something like this:

Four monkeys were put into a cage, along with a ladder and a banana at the top of the ladder.  When one of the monkeys went up the ladder to get the banana, all four monkeys were sprayed with ice cold water. After a couple of iterations, when a monkey tried to go up the ladder to get the banana, the other monkeys would physically assault him and keep him from doing so.

Then one monkey was replaced.  The new monkey immediately tried to go up the ladder to get the banana, but the other three beat him up and stopped him.

Then yet another of the original four monkeys was replaced, and when that new monkey tried to ascend the ladder, the other three beat him up – including the first new monkey that had never been sprayed with cold water even though he had no way of knowing why the cultural rules were that no monkey could go up the ladder.

In fact, when another, and then another monkey were introduced, so there were none of the original monkeys left, the monkeys would physically prevent each new monkey from getting the banana.

They had no idea why they should attack a monkey going for the banana, but they certainly knew that it was the way things were supposed to be done.”

Are there any parallels in your workplace?

Latest News Items

April 3rd, 2013

In April 2013 we decided to make the website more topical by including items about what we have been doing, or interesting articles and news stories we have come across.  Feel free to browse.