Sunday, January 31, 2010

Theory of Constraints

Theory of Constraints says that any system must have a constraint that limits its output. If there were no constraint, system output would either rise indefinitely or would fall to zero. Therefore, a constraint limits any system with a nonzero output. 
Deming  “We learned that optimization is a process of orchestrating the efforts of all components toward achievement of the stated aim.”
A physical chain provides the most commonly used prop to describe theory of constraint. The goal of a chain is to provide strength in tension. Everyone accepts that the weakest link determines the strength of a chain. Anyone can see that improving the strength of links other than the weakest link has no impact on the strength of the chain.

Dettmer poses the following list in his book Eliyahu M. Goldratt’s The Theory of Constraints, A Systems Approach to Continuous Improvement :
1.    System thinking is preferable to analytical thinking in managing change and solving problems.
2.    An optimal system solution deteriorates after time as the system’s environment changes. A process of ongoing improvement is required to update and maintain the effectiveness of a solution.
3.    If a system is performing as well as it can, not more than one of its component parts will be. If all parts are performing as well as they can, the system as a whole will not be. The system optimum is not the sum of the local optima.
4.    Systems are analogous to chains. Each system has a “weakest link” (constraint) that ultimately limits the success of the entire system.
5.    Strengthening any link in the chain other than the weakest one does nothing to improve the strength of the whole chain.
6.    Knowing what to change requires a thorough understanding of the system’s current reality, its goal, and the magnitude and direction of the difference between the two.
7.    Most of the UDEs within a system are caused by a few core problems.
8.    Core problems are almost never superficially apparent. They manifest themselves through a number of UDEs linked by a network of effect√†cause√†effect.
9.    Elimination of individual UDEs (undesired effects) gives a false sense of security while ignoring the underlying core problem. Solutions that do this are likely to be short-lived. Solution of a core problem simultaneously eliminates all of the resulting UDEs.
10.  Core problems are usually perpetuated by a hidden or underlying conflict. Solution of core problems requires challenging the assumptions underlying the conflict and invalidating at least one.
11.  System constraints can be either physical or policy-based. Physical constraints are relatively easy to identify and simple to eliminate. Policy-based constraints are usually more difficult to identify and eliminate, but they normally result in a larger degree of system improvement than the elimination of a physical constraint.
12.  Inertia is the worst enemy of a process of ongoing improvement. Solutions tend to assume a mass of their own, which resists further change.
13.  Ideas are not solutions.

Five Focusing Steps
Having realized the goal of the system and the fact of a constraint, Goldratt invented the five focusing steps as a process to get the most out of a system in terms of the system goal.
1. Identify the System’s Constraints, In order to improve the system in terms of the goal, you have to identify what is holding it back. You have to decide “what to change.”
2. Decide How to Exploit the System’s Constraints , Exploiting the system constraint requires getting the most out of the weakest link of the chain. In this step, you are deciding “what to change to.”
3. Subordinate Everything Else to the Above Decision, This is the key to focusing your effort. While subordinating, you may find many assumptions that seem to inhibit doing the right thing. This step is the first part of deciding “how to cause the change.”
4 Elevate the System’s Constraints, This is the implementing part of “how to cause the change.”
5 If in the Previous Step a Constraint Has Been Broken, Go Back to Step 1, This is the optimum continuous improvement strategy.

No comments:

Post a Comment