A wake-up call for process improvement

Monday, August 29, 2016

Lecturer, Haslam College of Business, University of Tennessee, LeanBP.com, Copyright©2016WilliamPeterson

“Constraint—anything that limits a system from achieving higher performance versus its goal.’’   —Eli Goldratt, What Is This Thing Called Theory of Constraints and How Should It Be Implemented?  (1990)

Process improvement should be focused on the one process that is the impediment to an organization’s goal.  It should not be leaderless, random, or focused exclusively on the shop floor.  It is an investment of limited resources that should be applied to the constraint no matter where it appears in the organization—anywhere from strategy development, planning, and marketing all the way to collecting payment.

The tools used to do this successfully are well-documented and should be selected appropriately, according to the situation, not by the tool you are being sold.  The Theory of Constraints is a methodology for identifying and mitigating the bottleneck to the organization—the one thing that is limiting revenue or mission. Six-Sigma is a methodology applied to a constraint in high-volume, low-variation processes where you need statistical tools to see the constraint.  Business Process Reengineering is used when the process is so broken you need to start over from scratch—and you have the authority to do so.  Lean is the methodology used to exploit the constraint in low-volume, high-variation processes by eliminating or mitigating wastes and non-value-added steps that disguise themselves as work.  The time saved through lean is used to add real value for internal or external customers, increasing the quality and throughput of the entire organization.

Unfortunately, just knowing what the tools are won’t bring you success—you have to apply them the way they were designed to be applied. And most organizations don’t.

Leaders at all levels should use the Theory of Constraints to guide all process improvement initiatives, following it wherever it leads in order to exploit the constraint to the organization’s mission.  Allowing process improvement initiatives to be unsystematic or focusing solely on front-line employees is an abdication of the leadership role. It wastes resources and, worse, kills employee enthusiasm when the initiative inevitably fails, proving the attempt was just another “flavor of the month” approach.

Lean can be implemented successfully only as part of a well-communicated growth strategy.  Since you’ll be depending on your employees to develop their own best practices, you must convince them that not only will they still have a job after the process improvement gains are realized, but they’ll be able to use the time they save to increase quality, achieve greater quantity output, or transition seamlessly into another role.  Reducing costs through attrition is also a possibility, if necessary and well communicated.  It would be even better to increase demand by applying lean to sales and marketing.

You may be thinking, “I agree completely, but I wish my company’s leadership understood all this—there’s nothing I can do until the culture changes.” But I’d argue that you can and should work within your own circle of influence—in other words, “be the boss of you.”  Go back and re-read these paragraphs, but wherever you see the word “organization,” think about your own role and processes instead (even this relatively small area of focus can keep you busy for many months).  Your own personal and organizational success can actually jump-start culture change by example.

When the constraint is in an overhead process and not on the shop floor, it requires a translation of manufacturing process improvement techniques to the office.  Many attempts to apply lean manufacturing methodologies to the administrative tasks are rejected by office personnel as not applicable.  Our Lean Applied to Business Processes (LAPB) provides a proven, visual, standard, repeatable, and teachable methodology to document, articulate, and communicate the goal; identify and remove the constraint; and repeat.  The LABP methodology accomplishes this by translating the Toyota Production System wastes and countermeasures specifically for office knowledge and transactional processes.   It helps take a comprehensive look at your organization and provides the strategy and techniques you’ll need to increase your revenue or accomplish your mission, regardless of industry or complexity.