5-Step Throughput Improvement Model Archives

“Adapt or perish.” This H.G. Wells quote captures perfectly today’s business environment. So much has changed so quickly. COVID-19 is affecting everything, everybody, everywhere. From six of my blog posts, here is a post COVID-19 toolkit to adapt your business to today’s new operational challenges:

SQDCME. There is just so much to do. When things are hectic, SQDCME prioritizes competing objectives and provides focus on the vital few: Safety, Quality, Delivery, Cost, Morale, and Environment.

Managing by Walking Around Quality Audit. People have changed seats. Many are now working from home. In just ten questions, you can quickly verify that your quality system is still functioning.

Business Process Mapping. Business processes are being re-engineered for a suddenly remote world. Process mapping answers questions about what actually happens inside your company. As such, it is an excellent tool for designing robust processes and communicating changes.

5-Step Throughput Improvement Model. Customer order patterns have changed and your internal operational constraints have moved. Here’s a quick refresher on Theory of Constraints and Goldratt’s 5-step throughput improvement model…how to find and break bottlenecks.

Sales Funnel. Is your constraint now outside the four walls of your plant? This blog combines business process mapping, Theory of Constraints, and Lean Thinking to improve the throughput of your sales funnel.

8D Team Oriented Problem Solving. An 8D is a simple but structured problem solving method that reinforces team work, encourages a bias for action, and delivers robust and permanent solutions across organizational boundaries.

Six great tools and methods to better equip you and your team for post COVID-19 challenges. Please feel welcome to put them to use. Adapt, don’t perish. 🙂

Pro Bono Help

The COVID-19 business contraction feels more severe than the credit crunch ten plus years ago. For me, that likely means not much in the way of new projects for the next six months or longer.

I will be fine. The kids are through college and my retirement is funded. But for those who work to provide for their families, the ramifications of COVID-19 are unthinkable.

Need some help with this post COVID-19 toolkit? Don’t hesitate to reach out.

Pro bono, I am offering my time to those struggling operationally to get their businesses going again. Quality, delivery, and cost solutions. Business processes for a newly remote world. Project management. A fresh eyes look. There is no reason for me to be sitting at home while small businesses are going under and jobs are disappearing.

If you are a neighbor along the Lake Michigan shoreline, here’s the link to the Michigan West Coast Chamber of Commerce COVID-19 Business Toolkit for government agency contacts, general business resources, best practices, etc.

Stay safe!

Steve Beeler

In my previous blog, I used the “ten machine” manufacturing puzzle to establish the need to think systemically: in isolation each machine hit its performance target, in combination the system failed to reach its goal. The 5-Step Throughput Improvement Model is a proven process to solve this local optimization paradox.

5-Step Throughput Improvement Model

Theory of Constraints views an organization as a chain of dependent activities or functions all working towards a goal. The constraint is the weakest link in the chain…the link that most severely limits the organization’s ability to achieve higher performance (throughput) relative to goal. In business, that goal is usually to make more money now and in the future. The following five step process will continuously improve performance (increase throughput) to the goal.

5-Step Throughput Improvement Model

Step 0: Define the system. In this context, the “system” includes both the goal and the activities and functions that deliver the goal: Who and what contributes to making money?

Step 1: Identify the system’s constraint. Finding the constraint in a large, complex organization can be a challenge. A simple rule of thumb: If a link in the chain is blocked then the constraint is downstream. If a link is starved then the constraint is upstream. More on finding the constraint in subsequent blogs.

Step 2: Decide how to exploit the constraint. How can we get the most out of the constraint: Approve overtime? Reduce set up times? Improve scheduling? Increase in-coming inspection?

Step 3: Subordinate everything else to the decisions made in Step 2. What can non-constraints do to ensure that the constraint is as productive as possible: Cross-train people? Improve quality? Take lunch and breaks at different times?

Step 4: Elevate the system’s constraint. Add capacity if and only if the constraint’s performance has been truly maximized.

Step 5: If a constraint is broken in Step 4, go back to Step 1. Repeat process on the next constraint until the organization’s goal has been met. If the goal is open ended (make more money!), then this process never ends.

If the plant is starved for orders, the constraint (also known as the bottleneck), is outside the plant in the marketplace. Does that invalidate this 5-step process? Not at all…apply it to your sales funnel.

Sales Funnel

The late Dr. Eliyahu Goldratt has a series of books on Theory of Constraints. His first book, The Goal, applies TOC to a manufacturing plant. A later book, Its Not Luck, applies TOC to a conglomerate’s portfolio of businesses. Both books are novels, not textbooks, and they are very easy reads. I highly recommend them.

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Terminology

Bottleneck = same as constraint

Sales Funnel = customer journey from enquiry to order