TOC in action

Steve Jackson has a nice pair of articles in Business Review Canada on applying Theory of Constraints at a small manufacturer (furniture).  The first, Putting Theory of Constraints to work!, describes the situation as chaotic with room for improvement everywhere.  And the second, Part 2: Putting Theory of Constraints to Work! describes how they employed Step 1 (Identify the constraint) and Step 2 (Decide how to exploit the constraint) to this particular environment.

I hope this series continues to describe Step 3, 4 and 5.  But I like how it has started.  Once the constraint has been identified in Step 1, Step 2 is the guidance around making sure that the selected constraint is adding the most value to the business.  In this case, it is the finishing shop - a busy, thankless, high-turnover area.  But after watching what the people do in this shop, they discovered that the design of the work was such that about 50% of their time was spent finishing the furniture.  The rest was spent moving, finding, doing setups, etc.  With that discovery and the realization of how important the constraint is to the success of the business, it becomes imperative to find ways to help the constraint focus on their core competencies.

Just to be clear here.  Step 2 is not about forcing people to work overtime, or running equipment without maintenance or other short-term actions.  Step 2 is about looking at the process around the constraint of the business.  How is the process designed.  If the process is designed well - with people in mind - and with a focus on getting work flowing through, then you can get a long way to success.

But don't stop there!  Step 3 looks at the rest of the business and how it should support the constraint.  Step 4 and 5 get you thinking about whether you should elevate the constraint (buy more) and whether the constraint has moved to a new location.

Update 2 Oct 2010: They have now published Part 3 and Part 4.  Good stuff.

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