Wednesday, April 16, 2003

Down 'n Dirty with the Theory of Constraints--Day 4

Yet another day's thoughts on Theory of Constraints with Hal and Frank. Today's topic: Flow Through the Constraint.

If single piece flow is so critical to managing the work flow through a constraint, how do we make sure we get this single piece flow? Here's where some Lean folks get hung up with TOC. Allow me to answer with an illustration.

Have you ever seen a big concrete pumping rig? A really cool piece of equipment and very expensive to rent. It can pump concrete to higher floors on a multi-story building or over a large horizontal distance across which concrete trucks can't drive. It is almost always the physical constraint in a concrete pour. If it isn't there or if it breaks down, the entire pour comes stops. This is a huge problem with wet concrete. How do we manage that constraint?

We add inventory.

In this case, the inventory is a queue of concrete trucks sitting there on the site. One is dumping into the pump and one to four more are just sitting there, idle, chutes extended, ready to swoop in (well, as much as a mixer truck can "swoop" :) ) as soon as the first truck is empty. The empty truck gets out of the way as quickly as it can and cleans up somewhere else, letting the next truck in to keep feeding the pumper.

The act of management falls to a project manager who arranges, ahead of time, with the concrete supplier and the pump supplier to have the pump there and to have the pace of concrete truck arrivals such that the pumper never stops. It is about simple planning, but paying attention to the management of the constraint.

Here's the point. In many, if not most, situations uncertainty prohibits a perfect matching of the flow rates through each step of the process. While in the ideal case each step would have the same output rate (based on takt time), that is not the case. When it isn't, the countermeasure is to add inventory to the system. There can be a knee-jerk negative reaction for a lot of folks to this statement.

The crucial move is to add inventory only in front of the constraint. In our example, the pumping unit must not be starved of concrete to pump. The responsible manager makes sure of that.

Inventory is like cholestorol. Some is good, some is bad, but we need both for good health. TOC helps us know where inventory is good and where it is bad. Lean has all the tools to get rid of the bad and how to manage the good. As I said on Monday,

TOC tells you where, Lean tells you how.

We hope this is helpful.

Feel free to forward to a friend. Email me

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