Bottlenecks and the Theory of Constraints
Bottlenecks and the Theory of Constraints
The Theory of Constraints can be understood by using the analogy of a garden hose. It is not particularly attractive to equate your business with an object so mundane, but the value the mental imagery provides is worth the momentary sacrifice. At the end of the hose that is attached to the tap, imagine the materials that you receive from your suppliers flowing into your business. At the other end, imagine a full, strong, and steady stream of your goods and services flowing out to your customers. As long as there are no unnatural blockages along the length of the hose (your business), the gardener (you) can deliver refreshing water (value in the form of goods and services) to the plants in the garden (your customers).
Now let’s consider what happens to the hose if it becomes constricted at a given point somewhere along the way. Suddenly, the volume of water rushing from the hose slows to a trickle. Since this has happened many times before, the gardener inspects the hose, and frees it from and kinks or constrictions. In a nutshell, the Theory of constraints says this; There may be a number of things in your business that are causing the volume of production to be less than its full potential. Find the largest constraint that is causing the most constriction on your production pipeline and put all of your energy into removing that constraint. The theory refers to this one as the “Critical Constraint.” When that constraint has been removed, and is no longer the “Critical Constraint,” turn all of your attention to the next largest constraint, which has now become your “Critical Constraint.”
To reduce this thinking one step further, imagine if the suppliers that your company depends on could no longer supply you with the materials that you depend on to deliver value to your customers. This would be the equivalent of someone turning off the gardener’s hose. Without materials being input into your company, it is impossible for you to deliver value, and therefore the critical constraint would be the lack of supply materials, and all effort of your company would be focused on returning the supply chain (getting the tap turned back on) to normal.
You can apply this thinking to your entire company by looking at your process map and identifying bottlenecks that slow down the delivery of value. There may be problems with materials supply, you may not have enough labour, you may not have the right people in the right positions. There may be a machine that is constantly breaking down, or maybe a particular individual that is inadequately trained. Since the bottom line of your business depends on the entire system to be functioning smoothly, it is worth throwing all your resources at your biggest problems. You can also apply this thinking on a micro level to the individual systems that live inside your business. You may have different production lines for manufacturing different parts that are controlled by their own systems. Theory of constraints thinking can be applied to not just to your business as a whole, but to individual systems by thinking of the materials that supply those systems as the tap, and the part of your business that counts on the system for delivery as the end of the hose.
There are four basic steps involved in the Theory of Constraints:
- Identify the Critical Constraint
- Make a plan to remove the constraint
- Make removing that constraint the most important aspect of your business
- Return to step one and identify the new Critical Constraint
Identify the thing in your business that acts as the critical constraint as far as production is concerned. What do you need to do to counteract or remove this constraint?