If you want to optimize production environments, you cannot escape the Theory of Constraints (TOC).
Traditional efficiency theories assume that machines should always produce as much as possible because of economies of scale.
In the TOC, only the use of bottleneck is maximized in order to achieve “the goal” of the organization; generate money to ensure the future of the organization. In essence, you start working effectively, rather than blindly focusing on efficiency.
The Five Steps
- Identify the system’s bottleneck: where is more market demand is than capacity?
- Determine the bottleneck of the system: determine how to fully utilize and benefit from the resource.
- Subordinate everything to the bottleneck: Work effectively, not efficiently. Working effectively means working to improve the effectiveness of the constraint.
- Improve the bottleneck of the system: not by adding additional capacity, but, for example, to relieve tasks, integrate tasks, simplify tasks, or eliminate tasks at the constraint.
- Avoid slowness and repeat the process: If a bottleneck was broken/resolved in the previous steps, go back to step 1, but do not allow slowness to cause a system’s bottleneck.
Where do you start?
Identifying the constraint sounds like a simple first step, but if it were a simple step, why do most organizations fail to identify it?
To answer this question, we must refer to the teachings of Dr. W. Edwards Deming. He articulated clearly that attempts to improve a process that is not stable will result in the process becoming more unstable.
This is what I’ll tell you more about tomorrow.