Theory of Constraints

Gabriel,

I see 6 sigma and TOC as mutually complementary.  It is an important concept, at every phase of DMAIC, to understand where the limitations/roadblocks/'constraints' are in the process.  Our options are to 1.)Knock them down 2.)Desensitize the process so that it is now robust to the past constraint 3.)Improve the process to the point that it'll operate at higher sigma levels and not knock against the constraint as often (or ever) 4.)Do nothing about it.  Our job is to sell, through the analysis of data, what is best for the business and weighs the value of the result from the eyes of the customer that chartered the project with the value of the result we see from the methodology. 

Regards,

Erik 

Gabriel,

There are several companies integrating Six Sigma with TOC.

 These two improvement methodologies are 100% compatible. Six Sigma can be used by any organization to increase reliability – the chance of meeting specific goals in any area. For example, if a Pizza operation is not meeting customer expectations in delivery times or in quality, Six Sigma shows how to analyze the reasons why and to fix them.

 The Theory of Constraints provides a method to focus an organizations or functions resources in the area where they will do the most good – the “constraint”. This methodology identifies what is most blocking an organization from improving. It also provides some generic solutions for managing an organization – for example in production logistics and scheduling, in distribution and in project management.

If the constraint is identified in an area requiring greater reliability or quality output, then Six Sigma is an excellent tool to apply to figure out how to increase reliability/predictability.

Even if the constraint is not in an area that lends itself to Six Sigma, Six Sigma is still important to the organization in other areas. This is because every organization, in order to survive and retain its customers, must achieve an acceptable level of reliability, or the customers will go somewhere else and the company will eventually go bankrupt.

Dr. W. Edwards Deming, the great quality guru of the 20^th century, suggested that any system can be characterized in one of two states – “in control” or “out of control”. “In control” means predictable – especially from the perspective of the customer. A system is in control if you can predict that it will meet its goals better than 95% of the time. Six Sigma offers even greater percentage predictability. In some cases, 95% predictable results is not good enough. How would you like to fly with an airline where 95% of the flights had no accidents, but 5% crashed?

Consider the systems that you are exposed to every day – the airlines, traffic in your city, your company’s delivery of its products and services, restaurants. How many of these systems are in control – meeting their goals better than 95% of the time?

Before you can bring a system into control, there are certain requirements. For example:

1. There must be a system (i.e., the system must be formally defined)
2. The system must be designed to deal with common cause variation (things that are part of everyday life). For example, a public transportation system must be able to cope with traffic congestion and with their own equipment breaking down and still be able to give reliable service to their customers. An airline must be able to do the same, in spite of weather conditions or busy hub airports.
3. Everyone involved in interacting with the system must have a deep understanding of it.

Goldratt’s Theory of Constraints helps in having defined systems in Production, Distribution, Finance and Measurements, Project Management, Marketing and Strategic Planning that deal effectively with common cause variation.

If a system is not in control (at least to the extent that the customer demands), the first question to ask is “why not?”  TOC uses a logical cause-effect analysis to pinpoint the root cause of the problem. In its analysis, TOC logic connects processes and functions together and looks at the relationships between these. Six Sigma is an excellent approach to analyzing within a process, once the root cause has been identified.

Each of these techniques has some areas of overlap – situations where either tool could help. This is not a problem, as long as we avoid putting artificial limitations on either tool, or encourage people to become zealots for either tool.

This implies that anyone who has a strong Theory of Constraints background and interest can benefit from learning Six Sigma. Also, anyone focusing on Six Sigma will enhance their performance by learning about TOC.

Please let me know if I can be of further assistance.

JM

Gabriel,

I guess I don't really understand your question or why you asked it. It is the exact same question that gets asked a couple times per week.

If you look at your own question, #4. How is it you think this happens? TOC legislates you improve it. Just like the 8D process on Identify root cause. Improving the constraint is open ended - you can use SS, TQM, Lean, Shanin, etc. You use whatever is the appropriate tool for the situation.

The history on the integration of the two whether youcall it TOC, Lean, Cycle Time, etc is documented over and over. If you read Mario Perez-Wilsons book, he writes about a bomb fuse program we worked on in the mid 80's. We bought hundreds of copies of "The Goal" to train teams with. Bill Fechter did a lot of the training.

I don't know what you want that hasn't been answered multiple times.

Dear Mike,

Could you tell me what Shanin is?

Sorry, Mike:

I read some books about TOC, and I liked TOC very much. But I am just discovering six sigma, and it was my first day in ths site. I have no ide what the book you tell me is. I also searched the Forum with the keyword TOC and found little abut the subject.

I want to thanks the responses of all of you. They help me understand.

Gabriel

APICS has a e-mail thread under cmsig that focuses on TOC ideas and is contributed to by a number of writers on the subject and gets comments from around the world on a variety of subjects.  It may be a place to review occasionally.  The list is available to anyone to sign up for.

Allen

Gabriel,

Mario Perez-Wilsons book was titled "Six Sigma." I think it is available on Amazon. If you can't find it email me at SixSigmaApaol.com and I will find out where he is selling it.

"The Goal" is by Goldratt. It sould be easy to find. I have seen it in bookstores all over the world.

If you read about TOC, Lean, TQM, SS, etc and do not read with the idea of finding fault or as a zealot for a praticular discipline (I am not meaning you personally) but with an idea of understanding the basic concepts. You relly have to internalize it for your own understanding. It is also critical that you understand the people who write are not providing "instant pudding" as Deming called it. None of it is a pat answer for everything. You adapt it to your culture, Company culture and situation. I have done a few large SS deployments as a consultant and it has never gone down the same anywhere.

Good luck.

Mimi,

Sorry for the delay in the answer. I was traveling and I don't do email rigorously when I travel.

Shannin was a consultant. The old style where you gave them money and they fixed stuff. He was very good at his job but just as Ono and the TPS guys didn't document a lot neither did he. I watched him fix a problem which had existed for 19 years in 2 days. He catches a lot of flack particularly from the stats people who like to punch holes in his tools but bottom line he was effective and when stuff got bad they called him a lot (and not the stats people who criticized him). He delivered results.

He sons still deliver his material and offer a certification (or at least they did).

The stuff works.

The only real documentation (that I am aware of) around him comes from Keki Bhote in his books.

Mike:

Thank you for your advice. About TOC, I have read "The Race", "The Goal", "It's Not Luck" and "The Haystack Syndrome", all by Goldratt. About Six Sigma, I have'n read a book yet. Some article published on Internet and this site are my first contacts with this subject. I agree 100% with you. The important thing is understanding the basic concepts, and not to take a discipline as if it was the magic solution for everything. Which book would you recomend me to start with to get this knowledge base about six sigma?

Thanks, Gabriel

Gabriel,

There are a lot of books on the market on Six Sigma. Mikel Harry's is popular for some reason. I know Mikel well and this doesn't sound like him. Breyfogel's book is a listing of tools (good listing) but the tools do not appear in the order you will find them in most training material (Control Charts in the Measure phase). He trys to explain your options in a lot of situations where the large number of choices can be confusing to a person new to the Methodology.

There are some big sellers out there but they have been primarily written by people who are not real practitioners.

Juran's "Managerial Breakthrough" is the best foundation since it was the foundation. After that I would read Mario Perz-Wilson's book "Six Sigma". After that I would read magazine articles. The books beat this thing to death and it really isn't that complicated. A Magazine article cuts to the chase.

What country are you in?

Dear Mike:

I really appreciate your help. I am an Argentinean, also living and working in Argentina. When I finished my degree in Aeronautic Engineering, I started working in a big local faucets manufacturer as a Quality Engineer (here, if you work, you work in what you find, if you find, and not in what you would like to) This was my first contact with Quality. That company was just beginning to implement a Quality System, which was later certified under ISO 9001. I was pretty involved in that process, and I liked working in Quality. So I decided to take what is called here a "Master in Quality Engineering" (it's a two years course). In one of the subjects we had an introduction to the Theory of Constraints, which included reading "The Goal". I really felt that Goldratt had to be in the company where I worked to write this book. I liked TOC and I read more books and attended a few seminars, and also I met the representative of the Goldratt Institute in Argentina. I didn't have the opportunity to work in a project using TOC, but in my work I used the tools of the Thinking Process (the Present Reality Tree, Future Reality Tree, etc) with some success for understanding a situation and improving it. Now I'm working in SKF (Swedish multinational bearing manufacturer) as a Quality Manager in one of the Argentine divisions. I learnt here about Six Sigma just because of some articles forwarded by a company's Statistician. Six Sigma is not widely applied in SKF, but I want to learn more about it.

Best Regards Gabriel

I'd look at the following books:

The six sigma way:..., P.Pande et al; Implementing six sigma, F.W.Breyfogle III; GE's six sigma revolution, G. Eckes; and Making six sigma last, G. Eckes.  Breyfogle covers tools well, and the others cover deployment, culture, and other issues well.  If you look at amazon.com, you'll see many books out there.  Many of them are worth little; of the remainder, it really depends on what you're looking for  - information around structured problem solving or process management.