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Defining Bottlenecks/Constraints

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  • #249315

    AlonzoMosley
    Participant

    Was basically third party to a discussions last week, and still digesting it.

    In essence, engineers saying they should only pay attention to improving assets that are “sold out”. In other words, if it’s not at capacity, it’s not worth improving.

    I always ask “If you can make more, can you sell more?” because I hate to spend a lot of time and effort building capacity that can’t be used. But for some reason, when I heard that argument basically come back to me, it felt a little off putting.

    Thoughts?

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    #249362

    Strayer
    Participant

    There’s so much to argue with those engineers I don’t know where to begin.ย  They seem to be concerned only with matching capacity to demand, which is a good thing, and view improvement as increased production, which is a bad thing if that’s the only consideration.ย  Can you be more specific about the arguments you heard so maybe one of us can refute them and offer advice?

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    #249445

    Gaido Schmidt
    Participant

    Do you think they meant that improvement should be prioritized to the higher volume sales products? It is hard to know what is going on from a small snippet of a conversation.

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    #249471

    Chris Seider
    Participant

    Always attack the constraint IF you need more capacity or the possibility to assign labor to other “lines” or processes so overall labor cost drops because fewer shifts or hours are used to produce the same amount of product.

    However, defects may have a higher cost impact than lost sales–heresy, I know, that sales can’t sell everything made if you increased output.

    This give and take about what is the “burning platform” is why project selection should be aligned with an executive committee that’s well rounded.

     

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    #249477

    AlonzoMosley
    Participant

    Yes, the executive committee is dysfunctional.

    From what I could gather, the only improvement projects worth discussing are on assets that are currently “sold out”. Any project to improve operation (from setup reduction to 5S) in an area that is not “sold out” is not worth discussing.

    Labor is not re-assignable. They claim “union” but see first paragraph.

    It’s a chemical process, so large, long lead-time batches are the order of the day.

    (And it’s not lost on me how little attention they pay to packaging, but that’s the host of a hundred other threads).

     

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    #249640

    MBBinWI
    Participant

    @AlonzoMosley – A couple of things come to mind.ย  1) If resources are constrained (and when aren’t they?), then the organization needs to prioritize the allocation of those scarce resources.ย  If you have several processes that all could benefit from improvement, often your best allocation is towards the one most constrained – so long as you can actually sell the improvement (but a fundamental premise to being constrained is that you CAN sell the increased capacity, else it really isn’t constrained).ย  2) Another question that needs to be investigated is whether the scarce resources would be better applied to making other, non-constrained but lower return processes more efficient and therefore provide a better return.

    Too many Lean/Six Sigma practitioners fail to examine these two points.ย  They see defects or poor processes and immediately look to apply critical skills to problems that won’t improve output or really improve the bottom line.ย  If you look at my two points above, item 1 deals with increasing the top line, and 2 deals with increasing the bottom line.ย  One or the other should be the primary focus.ย  I’ve seen too many instances when improvement was made that had negligible effect on either and the organization ends up getting a negative view of LSS.

    If you haven’t read it, I would recommend “The Goal” by Eli Goldratt to get a better understanding of how constraints should be analyzed.ย  There is a new(er) perspective of first using constraints evaluation to identify WHAT needs to be addressed, and then LSS or other improvement methods are properly applied to make the improvement needed.

    At least, in my humble opinion, that’s how I would react to the situation you posited.

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