Archive › Theory of Constraints

The Little Lessons we get hit with every day in Lean, TOC, & Six Sigma: Lesson 1; Poke-Yoke (Mistake-proofing a process)

Purple Curve EffectLast night I bought and downloaded Jeff “SKI” Kinsey’s e-book Purple Curve Effect: Throughput on Command (hey it’s just $2.00, what a deal!) and picked up on this little lesson in Lean Thinking that had a touch of Six Sigma to it too.

This little lesson came up as I was printing it out. I like to print out documents so I can read, highlight, and write notes in the margins (see Looking Back on My Thoughts On Reading from August in ‘97 for more on that). Generally speaking if whatever I’m printing out works out to be about 15 pages or more I’ll bind them up using A GBC hole punch and presentation binding comb setup I have.

Well I went to print out SKI’s book and given that it’s 185 pages both to make the book less thick and to save on paper I would print the odd pages first and then flip the bundle of printed pages over and print again only this time printing the even pages and then I have the book in front and back printed pages.

Well I printed it all out and as I was getting set to bind it up I noticed something was wrong with the page sequencing starting around page 80. Instead of page 85 having page 86 printed on the backside it had page 84. What the h….?!?

I quickly discovered what must have happened. Printing through the first run of just the odd pages at some point the printer grabbed two sheets of paper rather than just one so in that first run I had a uncalled for totally out of place blank page. When I printed it through for the even pages everything printed out just fine until I got that blank page which would then throw the rest of the printing page logic off.

That’s not a big deal right? I can just print the pages from 85 on again. And what is the lesson in Lean and Six Sigma in all of this?

Well as soon as the problem arose I realized there was a simple Lean term or tool for a procedure that I ignored and didn’t use that had I done it, it would have prevented the problem from ever occurring. The lean term is Poke-Yoke which is “a method of making process robust and mistake-proof”. What was the Poke-Yoke? Often printed on the packaging the paper comes in and certainly in the printer manuals for our printers in mentions that we should bend back the stack of paper and flip or leaf through it to separate the pages before loading the paper into the printer.

A simple second and a half procedure I just simply ignored wasted some 40 sheets of paper, a little ink and the entire process of printing out the e-book which should have taken maybe 7-9 minutes ended up taking me four to five times longer that it should of had. I had to discover and then diagnose the problem and then find where I had to restart the process from and then restart and repeat the process again from that point.

A little lesson learned….


Comments ( 1 )

Just Some Various TOC, CCPM, & Project Management Relevant Quotations of Interest I’ve Collected Over Time

"Tell me how you’ll measure me, and I’ll tell you how I behave"
—Eliyahu Goldratt

" Tell me how you’ll measure me, and I’ll tell what damn fool things I’ll do to make the measurement look good."
—Tony Rizzo

" No amount of sophistication is going to allay the fact that all your knowledge is about the past and all your decisions are about the future."
—Ian E. Wilson

The achilles heal of project management, especially in product development, are the estimates of time and resources.
—Jerry Groen

The most complex things are the simplest.
—Agni Celeste

Out of intense complexities intense simplicities emerge.
—Winston Churchill

The whole is simpler than the sum of its parts.
—Willard Gibbs

We struggle with the complexities and avoid the simplicities.
—Norman Vincent Peale

Our old views
constrain us. They deprive us from engaging fully with this universe of potentials.
—Margaret J. Wheatley Leadership and the New Science: Discovering Order in a Chaotic World

The pessimist thinks the glass is half empty.
The optimist thinks the glass is half full.
The cost accountant thinks you have twice as much glass as you need.
The throughput accountant thinks you have room for twice as much stuff.
—Rob Newbold

It is a simple task to make things complex, but a complex task to make them simple.
—Meyer’s Law.

"…It is crazy to give the greatest effort to detail when we know the least about the project…at the beginning. Better (much better) is to add detail no sooner than it is needed (acting at the last responsible moment) taking advantage of what is revealed and learned. AND do this with people who are close to the project…people who actually perform the tasks."
— Hal Macomber Notes on The Underlying Theory of Project Management is Obsolete

Ultimately, the parallels between process and project management give way to a fundamental difference: process management seeks to eliminate variability whereas project management must accept variability because each project is unique.”
— Elton, J. & J. Roe. “Bringing Discipline to Project Management” Harvard Business Review, March-April, 1998.

Comments ( 0 )

As part of the continuing Theory of Constraints Learning Process and the Lean Journey

As part of the continuing Theory of Constraints Learning Process and the Lean Journey my companies and the companies I consult with are on, I came across another interesting (PDF) article as part of some research I was on. The article that I found dusted off recollections of a topic that appeared in the Journal of Light Construction Business Strategies forum last winter entitled Is Our Industry Antiquated?

The contractor who started the topic off first wrote:

Just watched a TLC program about the largest Cruise Liner ever made, Voyager of the Sea. From start to finish is was completed in two years. 1020′ long (3 + football fields in length) , 157′ beam, and 214′ high (20 – 25 decks ?), and it’s not the longest ship either; an oil tanker is about 1600′ long, which is more than 5 football fields in length. And this cruise ship is like a hundred houses in one.

My point, and I guess question, is if such a ship with the tremendous challenges to build it, yet accomplishing that task is only 2 years is incredible compared to the result of a huge high end house that would take us two years. Seems what we do is nothing compared to what’s being done in ship yards as far as efficiency of resources.


Royal Caribbean Cruises – Voyager of the Seas

For the most part I thought the responses from other contractors to the topic were really either lists of excuses as to why we can’t do that in our industry:

"Yeah Sonny, but does their client keep changing the color of the ship? or the locations of the windows? or the cabinetry?") or explantions as to

Or explanations as to why they were able to accomplish such a tremendous production effort because they had the extra money to spend on it!!

"Am I antiquated with regards to that? You betcha. Does it cost my bottom line? Nope. We all have room for improvment in just about anything we build. Is that the point you’re trying to get across? Could I better keep track of inventory? Sure, by hiring someone like the shipyards do just to do that all day. Can I keep the men better supplied and ahead of the game at all times? Sure, I just need someone to oversee that on a full time basis. Can I afford these luxuries like the union ship yard can? No way. Do I have a crew of tool men keeping track of who needs what and keeping all the tools in repair at all times. Nope. The ship yard does. They can afford it."

Wow talk about really not seeing the forest through the trees!

However in defense of some of some of my fellow contractors there are some out there who I think either "get it" or are beginning to "get it".

Builder Allan Edwards wrote:

"If 80% of the projects are coming in behind schedule, then I would say that’s the norm. Isn’t’t insanity described as doing the same thing over and over and expecting different results? Seriously, scheduling is something we should give more attention to. "

And contractor Rick Westmoreland wrote:

"Of course, 80% of the schedules could be unrealistic to begin with."

And Estimating Consultant Bob Kovacs wrote:

"The benefits of fast-track are incredible if it’s done correctly."

Looking back at that topic I was surprised to notice that I never said what I really wanted say there in response to that "They can afford it." comment was essentially what Bob Kovacs was getting at in that the Because the work is well designed thought out and is done in a continuous FLOW process it is by far LESS EXPENSIVE! It’s saving money! The truth is we can’t afford not to do what they are doing!

We (our industry as a whole) have to stop making excuses as to why we can’t innovate and improve if we are ever going to fully realize the potential for achieving and harnessing greater profits.

Well, getting back to where I started the PDF article I discovered today is entitled TOC in a Commercial Shipyard by Daniel P. Walsh from the website. Well worth reading.

Comments ( 0 )

What is our CCR?

From and entry I made in the discussion forums on this site to Bill Amaya topic "What is our CCR?"

Hey Bill, it’s great to hear your voice again in here

Reading where you said:"The challenge and my dilemma comes when I take a broader look at my company and try to find the one thing that is setting the pace or pinching the cash flow. In fact I am having a hard time even categorizing what to look at." Just clobbered me with a lesson that maybe I’ve always subconsciously known but didn’t really understand the significance or power of until this year.

As I think I told you I lucked out and managed to get a consulting gig working with another company in another industry (aerospace) on "business process improvement" that I took as an opportunity to see if what I knew and was learning about TOC would work for others. What clobbered me was that working on another company’s problems and processes helped me see my own companies’ processes in a whole new light. Instead of seeing my own companies’ just from the inside-out position I was now seeing things from the out-side in that I hadn’t ever seen before.

What might work for you (and perhaps anyone) in terms of really developing your TOC techniques and tools is for you to find another different kind of company and work with them to help them understand their processes better and then in the spirit of quid pro quo have the leader of that company work with you on yours. That way you both get the benefit of having a detached third party looking critically at your operation and you’ll perhaps start to find that you can shift your own thinking and point of view back and forth from insider to outsider at times too.

I think there is a tendency when we are working within our own company’s to zero in problems or hunches that we have just developed a prejudice about (regardless of whether it a positive or negative prejudice). You can’t and shouldn’t ignore those hunches but you have to be very careful that you don’t become infatuated with them too.

"Our niche is to provide fabrication as well as installation of all of the architectual wood work that is just to difficult for the on site carpenters to perform and the cabinet shops don’t want to or simply can’t." Great description! Gee I wonder where I’ve heard that description and thinking before too… I don’t think it fluffy thinking at all.

"Some days I think that if we offered just one or two services our processes would be fewer in number and therefore the CCR would float to the top. But we just do not do the same thing over and over." Okay this is where I think I’ve found something I think you’ll appreciate. Last winter, right at the time when I was just starting that consulting gig I mentioned, I was goggling looking for an article I had read somewhere on some TOC related website about what was called "The Fire House Solution". It was in that search that I found another document on TOC that also made mention of the the firehouse analogy in talking about DBR and TOC.

Eight days ago I made a blog post regarding Theory of Constraints and Lean Thinking as it related to shipbuilding mentioning a document that I had just discovered and Jason e-mailed me regarding what I wrote there saying "The ship yard link wasn’t bad, but it didn’t really say anything.  Did I miss something, or were you simply trying to show the fellas the successful application of TOC?" and I started to write another blog post saying yeah that was an interesting but not earthshaking article but if you want to read something great you have to read Implementing Theory of Constraints In A Job Shop Environment by John Tagawa.

Discovering that document ( it was this fellow John Tagawa’s mater thesis at MIT) was like discovering the Rosetta Stone for me. Not only was it about "Implementing Theory of Constraints In A Job Shop Environment" it was about Implementing TOC In A Job Shop Environment at BOEING AIRCRAFT! And my new client was was an aerospace JOB SHOP! Prior to this year I don’t even recall ever hearing the term "Job Shop" before but now all of a sudden I was working with one and I also realized that was exactly what my company ParadigmProjects was too!

The entry for Job Shop from the Estimating & Project Management Glossary on this site:

Job Shop – A plant or shop floor given over to the manufacture of individual works orders, usually on a once-off basis. All work undertaken in the job shop is thus unique, or, at least, is individually undertaken. Many products in the job shop will have been specially designed and will thus have unique product routes. The length of time of manufacture in a job shop is typically days or weeks rather than hours. Repetitive or batch manufacture is not associated with work undertaken in the job shop. (Glossary of Manufacturing)

Anyway finding reading and learning from Tagawas paper has ben huge for me this year. Yeah Jason the only reason I brought up that shipbuilding article in my blog was because it related to that old JLC discussion but this paper was HUGE for me. I printed it out, all 96 pages, and even bound it up to make it easier to reference and read. I’ll be very interested to hear what you fellows think of it. The link to it doesn’t always work so if you can’t download it e-mail me and I’ll send you the PDF directly.

Comments ( 0 )

Suggested Reading for A Theory of Constraints – Critical Chain Project Management ‘Newbie’

I’m asked from time to time as to what books I would suggest for a Theory of Constraints – Critical Chain Project Management ‘newbie‘ to read and I think there is a real good one-two-three path for anyone just looking to get started with it.

The Goal: A Process of Ongoing ImprovementThe Goal: A Process of Ongoing Improvement
by Eliyahu M. Goldratt, Jeff Cox

This is the book that got me started on all this. Years ago I was working on a master bedroom bath project for a fellow who at the time was President of Union Carbide. Each day walking through his home to that master bath it would take me past his home office and I could see a book on a table by his reading chair. One day I say The Goal and it struck a cord because I had read an article about how companies were using it to change the way they work in Success magazine.

It’s written in the form of a novel so it’s a lot like listening to the real life stories that we sometimes hear professional talking about at times. Certainly the problems the characters face are ones we often face too.

Personally I think just the content in Chapters 13 & 14 regarding "the hike" are worth the price of the book alone. That where the lesson of the effects of common cause statistical variation is so well taught.

A kool quote I’ve often seen regarding the book comes from I think Fortune Magazine – " A survey of the reading habits of managers found that though they buy books by the likes of Tom Peters for display purposes, the one management book they have actually read from cover to cover is The Goal ."

The Goal also comes in an unabridged audio version too either CD or Cassettes that I listen to over again probably at least three times a year and also give to my people to learn from who aren’t as avid readers as I am.

Critical ChainCritical Chain
by Eliyahu M. Goldratt

Like The Goal this is written in the form of a novel too which helps make it such very interesting learning experience but it all about The Theory of Constraints as it applies to project management and in addition to introducing us to Critical Chain also introduces us to Drum-Buffer-Rope production technique.

Goldratt also does a good job with this book in explaining a lot of what goes wrong with traditional project management which is incredibly helpful in identifying what going on (or wrong) with our own projects and schedules by using characters that discuss debate and learn why their projects are often behind schedule and over budget.

Critical Chain Project Management, 2nd EditionCritical Chain Project Management, Second Edition
by Lawrence P. Leach

This book takes what is introduced to all of us in Goldratt’s "Critical Chain" novel and puts it into a How-to format. At $69 and no Amazon discounts this book is not cheap at all at but it’s certainly worth every penny.

While The Goal and Critical Chain are where you get the basic understanding of just what t is different about TOC and CCPM this is the book where you go when you need some actual technical explanations of just how to go about applying CCPM.


Comments ( 0 )

Jason Jennning’s book “Less Is More” & Eliyahu Goldratt

I was reading Jason Jennning’s new book Less is More last night and thought it was neat reading:

Chapter 8 —The Real Financial Drivers

Q: Why did the accountants cross the road?
Answer: Because the client told them to.

" Accounting is the enemy of productivity!"

So proclaims highly respected management consultant Dr. Eliyahu Goldratt, who has been described by Fortune magazine as a "guru to industry" and by Business Week as a "genius." His book The Goal, a business cult classic, has sold more than two million copies.

Some of Goldratt’s arguments were compelling, so we followed his lead. With my researchers in tow, I poked my nose around the accounting departments of the companies we were studying, trying to learn how they handle accounting and financial reporting differently than their less productive rivals. I was sure that my search for accounting theories shared by the chosen companies would turn up something new and off the radar screens–and it did.

What we discovered is that highly productive companies use the accounting department as it was originally intended; for the preparation and presentation of accurate and truthful financial statements testifying to the past performance of the company and as a resource capable of answering the financial "what-if" questions put forth by management in scenario planning. And . . . nothing more.

We concluded our research by delving into the role of the accounting and financial reporting functions of the companies we studied. We found the following four conclusions to be significant.

  • Financial statements–the end results of accounting are the real enemy of productivity.
  • Financial statements don’t portray the realities required to increase productivity.
  • Financial statements mask an embarrassing secret that prevents companies from becoming more productive.
  • Truly productive companies use "Drivers" without wiggle room to increase real productivity.

Yeah I like that.

Comments ( 0 )

How keeping busy can be a BAD idea

Found a good article this morning entitled Applying the theory of constraints in a structural steel plant—How keeping busy can be a BAD idea on the web site. To someone who has never been around a structural steel fabricator the first couple of paragraphs in the story might sound a bit alien but I think eventually any builder-remodeler should see some of the parallels to the situations they face at times.

Comments ( 0 )

Some People Prefer…

Reading through Pat Burke’s TOCforMe website again this evening I came across this little bit on why certain people/personalities might prefer Lean vs. Six Sigma vs. TOC (Theory of Constraints).

  • Some people prefer a packaged system of to do items which will lead to improvement (LEAN).
  • Some people prefer data driven decisions (SIX-SIGMA).
  • Some people prefer a “common sense” approach of problem solving and increasing profit (TOC).

Plus he’s got a good little table there comparing some of the attributes. Lean, 6 SIGMA, TOC.

I couldn’t help but think that most of the builders and remodelers that I know that really want to improve their business’ operation are the kind that would prefer lean —”a packaged system of to do items which will lead to improvement“.

A builder I know from online forum dialogs once said “Give me 3 practical tips based on what you are saying I can use Monday morning in my building business.” and I think that’s really sort of typical of how most builders want to work on their companies. Generally speaking I think they want something hard and tangible they can see rather than something soft like “a different way of thinking”. It’s kind of like thinking what pill can I take to make my business better. People want the quick fix. Not that Lean is necessarily a quick fix at all, but it does to me seem to provide a clearer hard tangible set of things to do where TOC (Theory of Constraints) comes off as too intellectual, mushy and soft to them.

I think because Lean and Six Sigma are great at fixing local problems and people can see the results on a local the can respond and react to that either positively or negatively and at least feel like something is happening. The problem is because they haven’t been to look holistically as TOC gets us to do they don’t see the effects that a Lean and Six Sigma action can have globally and tend to miss that completely or don’t relate it to the action instead attributing it to some outside influence or random act of God (their luck changed).

Personally my preference is for TOC and my reasoning goes beyond the idea that I feel TOC can encompass and embrace the other two where the other two don’t necessarily contain TOC thinking. My feeling (and now experience too) is that TOC delivers much faster (and bigger) results right out of the box (provided you can teach and sell the ideology nd methodology). And it provides a mechanism for you to find the results of your actions even though those results might not be seen locally right in front of your face. What I mean by that is while a Lean or Six Sigma program may or may not produce a dramatic change locally it’s global effect might altogether be lost or go unnoticed.

I think the typical builder-remodeler might see a change somewhere but not connect to a Lean or Six Sigma action somewhere else, whereas TOC which seems to me to force you to think systemically helps you to see the results of your action even though they might be much further down the line or far away.

Just thinking out loud trying to figure out the character of the resistance to change that I see in the typical builder and remodeler.

Comments ( 0 )

Great Quotes from Goldratt’s The Goal & Critical Chain

Here’s a list of great quotes from from The Goal: A Process of Ongoing Improvement that I found via Duke’s Tool Page which is a great starting point for a bunch of web pages full of good tips and ideas on management created by Duke Rohe of the Office of Performance Improvement at the University of Texas M.D. Anderson Cancer Center.

I’ve gone on to start adding to the list with my own picks from Critical Chain as I’m re-read through it.

  1. If you are like nearly everyone else in this world, you have accepted so many things without question that you’re not thinking at all.
  2. Every action that does not bring the company closer to its goal is not productive.
  3. Productivity is meaningless unless you know what your goal is.
  4. Your problems are you don’t know what your goal is.
  5. You company’s goal is to make money or it’s not in business.
  6. If quality was your goal, then how come Rolls Royce nearly went bankrupt?
  7. Can we assume that people not working and making money are the same thing?
  8. The best way to be shut down is to make money AND leave the competitors in the dust.
  9. It is possible for a company to show net profit and a good ROI and go bankrupt. Bad cash flow is what kills most industries.
  10. We need to increase net profits AND return on investment AND cash flow.
  11. Throughput is the rate at which the system generates money through sales.
  12. Inventory is the money that the system has invested in purchasing things it intends to sell.
  13. Operational expense is the money the system spends to turn inventory into throughput.
  14. Most people haven’t been managing according to the goal.
  15. We are too busy turning process time into piles of inventory.
  16. Investment is the same thing as inventory.
  17. Knowledge:

    • Which gives a new manufacturing process that turns inventory into throughput is operational expense.
    • Which we intend to sell is inventory.
    • Which is used to build the system is investment.
  18. Just pay me for the value of what you learn from me.
  19. What’s more important to your management, efficiencies or money? (Better be money)
  20. Do you realize the only way you can create excess inventory is by having excess manpower?
  21. The goal is not to improve one measurement in isolation. The goal is to reduce operational expenses AND reduce inventories and increase throughput simultaneously.
  22. Whatever lets us turn inventory into throughput is operational expense.
  23. Bowl and match game is awesome to understand the accumulation of inventory and its effect on the throughput. Pg 106.
  24. A bottleneck is any resource whose capacity to or less than the demand placed upon it.
  25. You should not balance capacity with demand. Instead, balance flow of product through the plant with demand.
  26. Does excess capacity equals waste. Yes and no. Yes if its products are stockpiling big time behind it. No if the fluctuations in the process behind it are starved for more inventory.
  27. You have to learn how to run your plant by its constraints.
  28. Most manufacturing plants don’t have bottlenecks. They have enormous excess capacities.
  29. Most manufacturers have capacity hidden from us because our thinking is incorrect.
  30. Loss in throughput is loss on the bottom line.
  31. Whatever the bottleneck produces in an hour is equivalent to what the plant produces. Every hour lost at a bottleneck is an hour lost in the entire system.
  32. A bottlenecks time is wasted when:

    1. Its product is sitting idle during a lunch break
    2. It is processing part that are defective
    3. It is producing parts that are not needed
  33. Do all the parts have to be processed at the bottleneck or shifted to a non-bottleneck for processing?
  34. We need specific fluctuation-reducing procedures for bottleneck-routed parts and processes.
  35. The level of utilization of a non-bottleneck process is not determined by its own potential, but by some other constraint in the system.
  36. A system of local optimums is not an optimum system at all.
  37. Four elements of time:

    1. Setup where part spends time waiting for a resource.
    2. Process time where part modified into a new more valuable form.
    3. Queue where part spend time in line waiting while a resource is busy working on something ahead of it.
    4. Wait where waits for another part so it can be assembled.
  38. Setup and Process are small in comparison of queue and wait. Queue is the dominant portion.
  39. An hour saved at a non-bottleneck is a mirage.
  40. Balance flow of a system, not capacity.
  41. Incentives we usually offer are based on the assumption that the utilization of any worker is determined by his own potential. Faulty.
  42. An hour saved at a non-bottleneck is worthless.
  43. Good way to teach: How to persuade other people, how to peel away the layers of common practice, how to overcome the resistance to change.
  44. Inventory is definitely a liability.
  45. Process of optimizing throughput:

    1. Identify the system’s bottleneck.
    2. Decide how to exploit bottlenecks
    3. Subordinate everything else to the bottlenecks
    4. Elevate the systems bottlenecks
    5. Fix the next bottleneck
    6. Warning! do not let inertia to cause a system constraint
  46. Eliminating priorities improve throughput.
  47. If your system has excess capacity? You can produce product at the cost of the materials.
  48. There are times when non-bottlenecks must have more capacity than the bottlenecks. If the upstream resources don’t have spare capacity, when this doesn’t happen, we are starving the bottleneck.
  49. The more complex the organization the more interdependencies between the various links and the smaller the number of independent chains it composed of.
  50. Policies can be a constraint of a system and it follows the same five steps to optimizing to.
  51. Major obstacles to putting principles of the Goal in practice:

    1. Lack of ability to propagate the message throughout the company.
    2. Lack of ability to translate the books learning to the company’s procedure.
    3. Lack of ability to persuade decision makers to change some measures.

From Critical Chain

  1. We all know that focusing is important" Johnny speaks softly "A manager who does know how to focus will not succeed in controlling cost and will not protect throughput. But what is focusing for us? We have come to know it as the Pareato Principle. Focus on solving twenty percent of the important problems, and you’ll reap eighty percent of the benefits. This is a statistical rule. But those who teach statistic know that the twenty-eighty rule applies only to systems composed of independent variables; it applies only to the cost world where each link is managed individually. (pg 91)
  2. In the throughput world, focusing and process of on-going improvement are not two different things, they are one in the same (pg 95)

  3. The higher the uncertainty the longer the tail of the distribution.
  4. "The difference between the median of the probability distribution and the actual estimate is the safety we put in" (pg 46)
  5. "What you claim is that the major, negative financial ramification does not stem from spending too much money"
  6. "Financially , the overruns are much less important that the overdue"

Comments ( 5 )