NG BB 18 Theory of Constraints


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NG BB 18 Theory of Constraints

  1. 1. National GuardBlack Belt Training Module 18 Theory of Constraints
  2. 2. UNCLASSIFIED / FOUOCPI Roadmap – Measure 8-STEP PROCESS 6. See 1.Validate 2. Identify 3. Set 4. Determine 5. Develop 7. Confirm 8. Standardize Counter- the Performance Improvement Root Counter- Results Successful Measures Problem Gaps Targets Cause Measures & Process Processes Through Define Measure Analyze Improve Control TOOLS •Process Mapping ACTIVITIES • Map Current Process / Go & See •Process Cycle Efficiency/TOC • Identify Key Input, Process, Output Metrics •Little’s Law • Develop Operational Definitions •Operational Definitions • Develop Data Collection Plan •Data Collection Plan • Validate Measurement System •Statistical Sampling • Collect Baseline Data •Measurement System Analysis • Identify Performance Gaps •TPM • Estimate Financial/Operational Benefits •Generic Pull • Determine Process Stability/Capability •Setup Reduction • Complete Measure Tollgate •Control Charts •Histograms •Constraint Identification •Process Capability 2 Note: Activities and tools vary by project. Lists provided here are not necessarily all-inclusive. UNCLASSIFIED / FOUO
  3. 3. UNCLASSIFIED / FOUOLearning Objectives  Understand principles of TOC  Learn and apply the 5 focusing steps  Analyze Drum – Buffer - Rope  Differentiate and apply Little’s Law, takt time and cycle time  Use TOC to improve a process 3 UNCLASSIFIED / FOUO
  4. 4. UNCLASSIFIED / FOUOVideo: The Goal Questions as you watch:  What are the 5 steps?  What is step 0?  Who/what is the bottleneck? Why?  How is the process fixed?  What is POOGI? The Goal: A Process of Ongoing Improvement Based on the book by Eliyahu Goldratt and Jeff Cox (2004) 4 UNCLASSIFIED / FOUO
  5. 5. UNCLASSIFIED / FOUOWhat is “Theory of Constraints” (TOC)?  Basic Principles of TOC: – A system must have a goal on which everything in that system is evaluated – Systems function as chains. Strengthening the weakest link benefits the system the most – Optimum system performance is NOT equal to the sum of the individual process optima – Systems operate in an environment of cause and effect. Visible problems are usually indicators (undesirable effects or UDE) of some critical root cause(s) that must be addressed – An optimal solution deteriorates over time. Improvement must be continuous. – Policy constraints are the most common and most difficult to break. Policy constraints offer the most opportunity for system improvement. 5 UNCLASSIFIED / FOUO
  6. 6. UNCLASSIFIED / FOUOTOC Measures of Progress  Throughput: The rate at which the system produces customer value or generates money  Inventory: Inventory is all the money invested in buying things that will at some time be sold (turned into Throughput) or that is tied up in the system (investment). Includes costs for raw materials, infrastructure, etc.  Operating Expense: The costs associated with turning Inventory into Throughput. Includes costs for labor, utilities, interest, etc. 6 UNCLASSIFIED / FOUO
  7. 7. UNCLASSIFIED / FOUOTOC Focuses on Constraints  A constraint is anything that impedes Throughput.  TOC concentrates on identifying and improving the worst impediment  Identifying constraints – Visual identification of WIP (Work in Process) – Calculating Throughput for each process step 7 UNCLASSIFIED / FOUO
  8. 8. UNCLASSIFIED / FOUOTOC Principles What are the 5 focusing steps of Theory of Constraints? Step 0: Know the Goal! 1. Identify the constraint 2. Exploit the constraint 3. Subordinate everything else to the constraint 4. Elevate the constraint 5. Re-evaluate, go back to step 1 How can you identify the constraint? Piles of WIP or calculate cycle time 8 UNCLASSIFIED / FOUO
  9. 9. UNCLASSIFIED / FOUOD-B-R Concept  Drum – The speed at which the constraint performs  Buffer – A “safety stock” to account for process variation so the constraint doesn’t “starve”  Rope - A signal to make sure that correct “number of things in process” put into the system at the appropriate time 9 UNCLASSIFIED / FOUO
  10. 10. UNCLASSIFIED / FOUOTOC Definitions Define Work in Process WIP - (Work in Process) the “number of things in process” at any given time Define Exit Rate The amount of work completed over a given period of time, which should also equal customer demand (“completions per hour”). 10 UNCLASSIFIED / FOUO
  11. 11. UNCLASSIFIED / FOUOTOC Definitions What is Little’s Law and what does it represent? Work in Process (WIP) Process Cycle Time = Exit Rate Voice of the process 11 UNCLASSIFIED / FOUO
  12. 12. UNCLASSIFIED / FOUOTOC Definitions What is Takt Time and what does it represent? Time available for work in the given time period Customer demand for a given time period Voice of the customer 12 UNCLASSIFIED / FOUO
  13. 13. UNCLASSIFIED / FOUOTOC Definitions Define Cycle Time  Cycle Time: The time it takes a product to move (cycle) through a step or a process, including queue and move times.  Common synonyms (often used interchangeably): – Flow Time – Lead Time – Throughput Time 13 UNCLASSIFIED / FOUO
  14. 14. UNCLASSIFIED / FOUOTOC Example P1 P2 P3 P4 12 seconds 10 seconds 5 seconds 8 seconds What is the process cycle time? 12 + 10 + 5 + 8 = 35 seconds If the Takt time is 11 seconds, where is the constraint, and why? P1, it exceeds the Takt time 14 UNCLASSIFIED / FOUO
  15. 15. UNCLASSIFIED / FOUOTOC Flow & Pull Explain the difference between Push and Pull work systems  Push: Work is pushed into the system or process based on forecasts or schedules  Pull: A customer-driven system that produces and moves a product/service only when the customer needs it 15 UNCLASSIFIED / FOUO
  16. 16. UNCLASSIFIED / FOUOKnowledge Check TOC is….(pick one) A. A new way of getting people to work harder B. Strengthening the weakest link (constraint) in a system C. A fancy scheduling tool meant to confuse workers D. Adding extra inspections to get first time quality 16 UNCLASSIFIED / FOUO
  17. 17. UNCLASSIFIED / FOUOKnowledge Check Lean is….(pick one) A. A new weight loss program for employees B. A war on Waste C. Reducing manning D. Adding extra inspections to get first time quality 17 UNCLASSIFIED / FOUO
  18. 18. UNCLASSIFIED / FOUOKnowledge Check Six Sigma is….(pick one) A. A new way of using metrics to blame workers B. A war on variation C. Complicated statistics meant to confuse workers D. Adding extra inspections to get first time quality 18 UNCLASSIFIED / FOUO
  19. 19. UNCLASSIFIED / FOUO What other comments or questions do you have? 19 UNCLASSIFIED / FOUO