ng bb 18 theory of constraints

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National Guard Black Belt Training Module 18 Theory of Constraints

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Page 1: NG BB 18 Theory of Constraints

National GuardBlack Belt Training

Module 18

Theory of Constraints

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CPI Roadmap – Measure

Note: Activities and tools vary by project. Lists provided here are not necessarily all-inclusive.

TOOLS

•Process Mapping

•Process Cycle Efficiency/TOC

•Little’s Law

•Operational Definitions

•Data Collection Plan

•Statistical Sampling

•Measurement System Analysis

•TPM

•Generic Pull

•Setup Reduction

•Control Charts

•Histograms

•Constraint Identification

•Process Capability

ACTIVITIES• Map Current Process / Go & See

• Identify Key Input, Process, Output Metrics

• Develop Operational Definitions

• Develop Data Collection Plan

• Validate Measurement System

• Collect Baseline Data

• Identify Performance Gaps

• Estimate Financial/Operational Benefits

• Determine Process Stability/Capability

• Complete Measure Tollgate

1.Validate the

Problem

4. Determine Root

Cause

3. Set Improvement

Targets

5. Develop Counter-

Measures

6. See Counter-MeasuresThrough

2. IdentifyPerformance

Gaps

7. Confirm Results

& Process

8. StandardizeSuccessfulProcesses

Define Measure Analyze ControlImprove

8-STEP PROCESS

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Learning Objectives

Understand principles of TOC

Learn and apply the 5 focusing steps

Analyze Drum – Buffer - Rope

Differentiate and apply Little’s Law, takt

time and cycle time

Use TOC to improve a process

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Video: The Goal

Questions as you watch:

What are the 5 steps?

What is step 0?

Who/what is the bottleneck? Why?

How is the process fixed?

What is POOGI?

The Goal: A Process of Ongoing Improvement

Based on the book by Eliyahu Goldratt and Jeff Cox (2004)

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What is “Theory of Constraints” (TOC)?

Basic Principles of TOC:– A system must have a goal on which everything in that system is

evaluated

– Systems function as chains. Strengthening the weakest link benefits the system the most

– Optimum system performance is NOT equal to the sum of the individual process optima

– Systems operate in an environment of cause and effect. Visible problems are usually indicators (undesirable effects or UDE) of some critical root cause(s) that must be addressed

– An optimal solution deteriorates over time. Improvement must be continuous.

– Policy constraints are the most common and most difficult to break. Policy constraints offer the most opportunity for system improvement.

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TOC Measures of Progress

Throughput: The rate at which the system produces customer value or generates money

Inventory: Inventory is all the money invested in buying things that will at some time be sold (turned into Throughput) or that is tied up in the system (investment). Includes costs for raw materials, infrastructure, etc.

Operating Expense: The costs associated with turning Inventory into Throughput. Includes costs for labor, utilities, interest, etc.

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TOC Focuses on Constraints

A constraint is anything that impedes Throughput.

TOC concentrates on identifying and improving the worst impediment

Identifying constraints

– Visual identification of WIP (Work in Process)

– Calculating Throughput for each process step

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TOC Principles

What are the 5 focusing steps of Theory of Constraints?

1. Identify the constraint

2. Exploit the constraint

3. Subordinate everything else to the constraint

4. Elevate the constraint

5. Re-evaluate, go back to step 1

How can you identify the constraint?

Piles of WIP or calculate cycle time

Step 0: Know the Goal!

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D-B-R Concept

Drum –

Buffer –

Rope -

The speed at which the constraint

performs

A “safety stock” to account for

process variation so the constraint

doesn’t “starve”

A signal to make sure that correct

“number of things in process” put into

the system at the appropriate time

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TOC Definitions

Define Work in Process

WIP - (Work in Process) the “number of things in process” at any given time

Define Exit Rate

The amount of work completed over a

given period of time, which should also

equal customer demand (“completions per

hour”).

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TOC Definitions

What is Little’s Law and what does it represent?

Exit Rate

Work in Process (WIP)Process Cycle Time =

Voice of the process

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TOC Definitions

What is Takt Time and what does it represent?

Time available for work in the given time period

Customer demand for a given time period

Voice of the customer

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Common synonyms (often used

interchangeably):

– Flow Time

– Lead Time

– Throughput Time

TOC Definitions

Define Cycle Time

Cycle Time: The time it takes a product to

move (cycle) through a step or a process,

including queue and move times.

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TOC Example

What is the process cycle time?

P112 seconds

P210 seconds

P35 seconds

P48 seconds

12 + 10 + 5 + 8 = 35 seconds

If the Takt time is 11 seconds, where is the constraint, and why?

P1, it exceeds the Takt time

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Push: Work is pushed into the system or

process based on forecasts or schedules

Pull: A customer-driven system that produces

and moves a product/service only when the

customer needs it

TOC Flow & Pull

Explain the difference between Push and Pull work systems

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TOC is….(pick one)

A. A new way of getting people to work harder

B. Strengthening the weakest link (constraint) in a

system

C. A fancy scheduling tool meant to confuse workers

D. Adding extra inspections to get first time quality

Knowledge Check

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Lean is….(pick one)

A. A new weight loss program for employees

B. A war on Waste

C. Reducing manning

D. Adding extra inspections to get first time quality

Knowledge Check

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Six Sigma is….(pick one)

A. A new way of using metrics to blame workers

B. A war on variation

C. Complicated statistics meant to confuse workers

D. Adding extra inspections to get first time quality

Knowledge Check

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What other comments or questions

do you have?