Tag: continuous improvement

  • How TOC Can Move Your World – and World View

    How TOC Can Move Your World – and World View

    archimedes lever

    Archimedes once said, “Give me a lever long enough,
    a fulcrum, and a place to stand, and I shall move the world.”
    Learn how production professionals use Constraints Management to meet negativity head – on to manage meaningful change

     

    Here’s the last part of our three-part series about the Theory of Constraints (TOC). In the next couple of postings I’m going to dig right in to looking at what actually happens when I’ve used TOC at client companies. But there’s more gold to be mined from this topic—and I wanted to make sure I included in this series some common “fulcrums” –or common organizational assumptions that might sound familiar to you.

    I also want to clear up some of what you might think. A common notion about constraints as they are viewed as a “negative.” However, constraints are neither good nor bad; they are just part of any organization. To clarify, try and picture an organization that has no constraints. What would you expect to see from this type of organization? The organization would produce with unlimited growth. In nature and in business, there aren’t any systems that produce at unlimited capacity and exhibit unlimited growth.   So if there are no systems that produce at unlimited growth, then all systems have constraints.

    As people working in systems, we can either acknowledge or deny that constraints exist. Regardless of the choice, constraints will have an effect upon the organization. If we want to grow our organization, then we might as well pay attention, right?

    Too Many Places at Once

    In my last blog posting, (Which Systems is More Complex?) I discussed the complex view of organizations, with the belief that change is incremental. Many changes will equal organizational improvement.

    For contrast, I also discussed that with TOC in that there is only one or very few true constraints within any system. Improve the constraint, and you will make a significant impact upon the system.

    What if you do not have a method to find the weakest link? Random chance allows that every once in a while, one of these actions will touch an organizational constraint and generate an impressive single-event, a growth-oriented action. The opposite might also happen: The same random choice may damage a constraint and produce a single, one-time negative result. If you think about the last 20 years of organizational history, I’m sure you can find a few such cases of one or the other, but more likely the latter. These events will be on the scale of urban legends within the organization. Like New Coke in the 1980’s, a disastrous merger like Daimler/Chrysler, or spinning off acquisitions to conserve cash.

    The Cost Conundrum

    Traditionally, most improvements are efforts to save cost. People think that if cost is removed from the delivery of a product or a service, it will result in higher profits. The vast majority of the U.S. Economy believes this to be true, and that, in conjunction with the high affinity for innovation, creates a compelling mix. But when we compare TOC with other improvement methods, its speed and accuracy bring about significant change – faster. We find our constraints and then we can react.

    The TOC View of Problems

    Traditional view: “A problem is something I don’t like”, or “Something that bothers me”, or the classic “Something that keeps me up at night.”

    TOC view: “A problem is a conflict that prevents a system from reaching its desired objective.”  With this definition, there is a second fundamental belief in physics that “There are no conflicts in reality.”  There are only invalid assumptions about the conflict.

    Assume Control

    TOC translates conflicts as follows: If there is a conflict, then there must be an underlying assumption about that system that created the conflict.  The solution comes from identifying the assumptions about the conflict, validating the existence of the assumptions, and eliminating the negative assumption about the conflict so that a solution can be built that will allow the system to reach its desired objective.

    In every organization, managers face many issues on a daily basis. Typically, most of these issues stem from a single core problem (conflict) that the organization hasn’t been able to previously identify. Many managers are aware that these conflicts exist, however, these type of conflicts are very difficult to solve as most have conflicting objectives that result in compromises.

    Does this sound like you?

    The existence of conflict can be validated by looking back in time for periodic shifts in organizational philosophy. As an example, if in the past, your organization was emphasizing centralized management and now it is emphasizing profit-center autonomy, then these switches indicate the existence of an unresolved core problem. Efficiency is another example of an unresolved core problem. If at the beginning of any reporting period, organizational efficiency is emphasized, and then at the end of the month, all the rules are broken (forgotten) to achieve shipments and revenue targets. This again is a sure sign of an unresolved core problem.

    TOC has a number of system tools that tackle the “new normal” head on. Next time, we’ll look at these tools as they applied to an automotive manufacturer—we’ll uncover their core assumptions and watch how their teams took control with TOC.

    – Rick Denison

    6.0-Rick Which System is More Complex? The Answer is Simpler than You Think                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

    Rick is the “Dr. Who” of manufacturing operations and logistics. And while Rick doesn’t travel through time, he is adept at leading change – and saving time – in a diverse range of manufacturing environments through Lean manufacturing, Six Sigma, and TOC techniques. Rick’s posts address how demand-driven matters and draws from his background in process improvement, change management, project management, information systems implementation, and profitability analysis.

  • Using Big Data to Tell Your Story

    big-data-narrativeThree ways narrative can connect the dots between big data and your brand

    In a recent Forbes article, the writer describes Big Data as “a collection of data from traditional and digital sources inside and outside your company that represents a source for ongoing discovery and analysis.” I love this definition because it describes a process of discovery that—once linked with your brand message – allows you to uncover additional opportunities to tell compelling stories in the markets you serve.

    I work in the manufacturing space, where our systems manage large amounts of real-time data aggregated from enterprise systems and machines in a client’s plant(s)—and all the way out to suppliers and customers. Manufacturers who harness this data gain insight to improve production flow; focus continuous improvement (CI) initiatives; and drive customer satisfaction via on-time delivery, innovation and increased capacity. This insight – and resulting capabilities – helps them transform into a more flexible, reactive and empowered business partner, creating a powerful story to tell in the marketplace. Sharing your most impactful big data stories will strengthen competitive advantage, profitability and your brand value.

    Here are what I believe to be the three most compelling storylines for our manufacturing audience in what I call, “The Big Data Narrative”:

    1. Pain Points

    As marketers know well, features and benefits must solve specific customer problems. Spend some time brainstorming with your front-line people about the “pain” your customers are in and come up with an engaging narrative to show how your products can provide actionable information to solve these problems. Take care to create a distinction between a pile of data and actionable information that elicits “discovery” or insight into innovation.  For example, our client was able to access actionable information to manage their inventory and WIP in a visible way and experience a 50% reduction in operating expenses. This customer’s pain point was ineffective inventory management, but they also had spotty supplier relationships. We helped them use and interpret their new system-generated data to create new synergies with their suppliers—a story worth the telling.

     2. Related, Real-life Narratives

    After you identify the pain, look at your past and current customers to give your big data solutions weight and depth. You’ll need case studies and testimonials like the one I used above. We often use case studies from our clients to paint a picture of value, particularly from those who use our InSync Services after implementation to jump start continuous improvement actions based on their new system-generated knowledge. We tell our products’ stories by telling these client stories—how they improved flow and continued to build value through their Big-Data-driven CI process. I love sharing the real-life ways that show how manufacturers use us to turn their big data into actionable information – and then into transformational improvements.

    We also use stories to differentiate ourselves in the marketplace we serve. Because we have a unique position as a provider incorporating demand-driven manufacturing processes into our systems, we use stories from current clients to validate our value proposition to prospective clients. In turn, these customers use our stories to sell the solution internally to gain adoption.

     3. Table the Tables?

    big-data-storiesMark Schaefer’s excellent blog post cautions against using too many pies, charts and graphs to tell the story—but let’s face it—70% of us are visual learners and supply-chain managers tend to want these graphics. They’re used to a dashboard approach and it would be a mistake not to give them one. In fact, the factory of the future is a visual environment, where status is easily viewed and actionable information is within reach, accessible to everyone.  But don’t lose the people in the process of telling your story. Paint a “people picture” – use the shop foreman’s real first name – and don’t be afraid to use emotion as you translate Big Data into the big stories that create big results for your customers.   As Schaefer puts it:

    “If we distill the complex and nuanced world into only averages and pie charts, we could be missing the important opportunities presented by context. What’s the story behind the data? What’s there that we didn’t expect to be there? What are the implications of a trend and why is it happening?”

    Ask these questions of your Big Data and you can show your audience the exponential value they will experience once they get a handle on their own story.

    Let me know your Big Data stories. And thanks for reading mine!

    – Marketing

    Marketing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               Big data, the Internet of Things, Industry 4.0, Factory of the Future, the Visual factory – what do you really need to pay attention to and what do these concepts mean to most manufacturers? A sceptic and trend-spotter, Pam’s posts leverage a background in technology marketing to apply these big concepts to the real world – and real work – of demand-driven manufacturers.

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  • Never Stop Learning

    Never Stop Learning

    Theory of Constraints

    Necessary demand-driven components: How TOC delivers powerful results

    I grew up in a home where my family held daily quizzes around the dinner table about what we learned during the day at work or school. These topics ranged from Astronomy to current events – yet what this experience instilled in me was not so much knowledge in specific disciplines, but the idea that I could learn something new each day. And even if I was not directly exposed to new knowledge, these moments showed me that the people I associated with during each day were a rich source of knowledge by sharing what they learned with me.

    As I entered the workforce after college, I began another learning process. I found to my dismay that not all I learned in the university was directly applicable at the manufacturing companies where I worked. Each company seemed to have their own definitions for their processes and believed that their environments were completely unique. This attitude created production practices that seemed needlessly complex. I often thought, “There has to be a better way.”

    It wasn’t until my first management job that I finally found some answers. I was introduced to The Goal, by Dr. Eliyahu M. Goldratt and Jeff Cox. This book was a watershed moment for me, in that it shed light on some of the assumptions I had seen at play within all of the organizations I had known.

    Since that time, using principles of the Theory of Constraints (TOC) in The Goal, I have researched, taught, and applied many approaches to overcome the assumptions that prevent organizational growth, employee development and increased profitability.  Drum-Buffer-Rope scheduling, Thinking Process Jonah Training, Six Sigma Black Belt Training, extensive research on the Toyota Production System, Lean principles, and study in Deming’s Theory of Profound Knowledge all contribute my repertoire of improvement methods.

    During these blog discussions, I would like to share the insights that I have gathered across many manufacturing environments and over decades. I hope that similar to those dinner table discussions of my youth, you will bring your insights and share some of your knowledge here, as well.

    My expertise focuses on the Theory of Constraints; Lean manufacturing; and creating a culture of continuous improvement within a demand-driven manufacturing framework. I will be talking about how these theories can be put into practice to drive your production success. We’ll learn about:

    • The genesis of the Theory of Constraints and why it matters to your business
    • Using constraints management to drive practical change for profitable results
    • The kinds of constraints you will encounter and how to deal with them
    • What measurements drive the behavior for improvement
    • And more…

    My goal is to bring the valuable science inherent in these systems to you in an accessible way. Yet I will also make sure to deliver practical advice and examples of how I have seen a TOC focus make a world of difference at companies large and small. Just as gravity is an immutable law of nature, to me, the TOC is an immutable law of manufacturing success. And just like any laws, the best ones sort out complexity. I finally got my answer to, “There has to be a better way.” I hope I can help answer the same thing for you.

    – Rick Denison

     

    Rick Denison                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               Rick is the “Dr. Who” of manufacturing operations and logistics. And while Rick doesn’t travel through time, he is adept at leading change – and saving time – in a diverse range of manufacturing environments through Lean manufacturing, Six Sigma, and TOC techniques. Rick’s posts address how demand-driven matters and draws from his background in process improvement, change management, project management, information systems implementation, and profitability analysis.

     

     

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