Document 222417

How to Identify Your Constraint “What is MY constraint???” – such a simple question provokes a shockingly wide variety of responses. In theory, the diagnostic process is quite straightforward: Do you have >50% world market share in your category?
If Yes -­‐-­‐> World Market is the Constraint Do you deliver >95% to promised (on-­‐1me, in-­‐full quan1ty, with no quality defects) If Yes -­‐-­‐> Orders are the constraint
Do you receive <95% supplies on 1me from vendors?
If you always pay vendors by due date -­‐-­‐> You fail to pay vendors by due date -­‐-­‐> World Suppy is the constraint Cash is the constraint Is the OEE/capacity for most opera1ons >90%
If Yes -­‐-­‐> Over-­‐balanced line in the constraint
Is the OEE/capacity ul1liza1on for one opera1ons in your company >95%
If Yes -­‐-­‐> Produc1on Capacity is the constraint When such kind of analysis is performed, odds are that production capacity will appears to be the initial constraint. By observing where WIP is piling up, where expediting usually happens, etc. one can usually zero in on which specific resource is the constraint. Incidentally, this resource might just as easily be a skill set / person as a physical resource. Seasoned TOC implementers and consultants know that this methodology presents an over-­‐simplistic picture. In most, if not all organizations, the REAL constraint is unrelated to any of these things. It has to more do with the fabric of the way the company relates to itself; it’s written or unwritten policies, norms, and beliefs. Based on our collective experience we find that another type of analysis is a great supplement to the above questionnaire: Policy Constraint ID Questionnaire Do the owners crave to improve current performance significantly? No -­‐-­‐> Lack of burning desire is the constraint
Are the owners convinced that significant improvement is possible? No -­‐-­‐> Cynicism / lack of confidence is the constraint
Is there an internally consistent Goal for the organiza1on? No -­‐-­‐> Absence of a clear Goal is the constraint
Is the Goal commonly understood and agreed?
No -­‐-­‐> Alignment is the constraint Is the measurement unit of the Goal clear and frequently reported to the top team? No -­‐-­‐> Informa1on repor1ng is the constraint
Are harmful local measures being used in the company (e.g. machine efficiency? Yes -­‐-­‐> local measurement / synchroniza1on / teamwork is the constraint
Are system priori1es known at all points of 1me
No -­‐-­‐> Management systems / management aVen1on is the constraint.
Are system priori1es being used to con1nually focus the team's aVen1on?
No -­‐-­‐> Lack of discipline is the constraint Are correc1ve ac1ons being regularly taken to improve the things that need it most? No -­‐-­‐> POOGI (Five Focusing Steps) are the constraint
The last item begs further explanation. For example, based on the first type of analysis, supplies appear to be the constraint. Irregular supply issues may likely be due to internal factors rather than just “World Supply Shortage” or “Cash Shortage.” Perhaps having the wrong supplier(s), over-­‐aggressive payment/pricing terms, unwillingness to seek funding and/or poor internal coordination are causing the stockouts. It is important to every organization to have a frequent process for flagging issues and taking corrective actions to respond to this sort of issue dynamically.