Theory of Constraints.
Unlike the Toyota production system, where we seek to eliminate waste through continuous improvement, there’s another philosophy called the theory of constraints. And it seeks to remove constraints from our production system that enables us to produce the most with the given resources.
In this theory of constraints, we identify constraints by measuring variation on three different items. One is inventory, what we put into our production system. The second one is throughput, the products that our customers buy ultimately, and operational expense, which is the money spent on converting inventory into throughput. And the goal is to eliminate as many constraints as possible as to achieve the highest throughput. Now you may wonder, what is a constraint? There are three classes of constraints that the theory identifies. One is machinery. Machines can operate only at a certain speed. The second one is people, and especially skilled people that can operate those machines well. And finally there’s policies. Sometimes they may hinder the throughput of a system. The goal of management is to use these constraints to elevate the performance of our manufacturing system. Now how do we get rid of these constraints? Well, there is a five step procedure. First, you start by identifying what factor in your production system is a constraint.
Then you have to elevate the performance of the constraints i.e., make that piece of your system work better. Sometimes what you have to do is make other parts of your system worse, in order to allow that one piece to work better.
It’s counterintuitive, but making some pieces of your system worse off to help improve the performance of that limiting constraint actually improves the whole system overall.
Finally, you go in and eliminate that one constraint. Your system’s performance is better and you have to go back out and find the new constraint that limits the total output of your system.
And you have to make sure you don’t revert back to your old ways that enabled that one constraint to actually be a limiting factor. There is an example in the book that highlights an important principle about production system. And, in that example, the protagonist takes his son and a group of boy scouts on a hike. Now what he notices is that some kids are walking a lot faster than others. But as a group, they walk very slowly. This is similar to a production system in a factory. Some machines work very fast, some machines work very slow, but the slow ones are the ones that limit the entire system from producing more.
What he thinks about is called the drum buffer rope system. And that helps us eliminate constraints, and increase the performance of the system. So, you have a drum, [SOUND] and that gives us the tap speed of the whole factory, which should never be faster than the slowest machine or the bottleneck. Then, there is the buffer and we place buffers in front of our bottleneck machines, so that we can be assured that they never run out of material to produce. Because if you have that machine waiting and has a critical impact on the entire system. And then finally, he tied a rope around the waist of all the boys to make them go at the same speed. So, you can limit the amount of working process in the whole system to make sure that the system produces at exactly the same speed. And that’s the drum, buffer, rope system that helps us identify constraints and elevates our system’s performance. [MUSIC]
Theory of Constraints.