Category: Theory of Constraints

In my previous post about checking your assumptions, I talked about the rules and requirements about your process.  The supply chain is no different.  After all, rules are made, boundary conditions established around how you deal with your suppliers.  Therefore, you should also look at your supply chain policies to find possibilities to increase output … Continue reading

To increase output, whether in a disaster or in everyday pressures, you must challenge your assumptions to find solutions.  Usually, the solution is not obvious (otherwise, it would have been implemented, right?), so you have to dig deeper.  Challenging assumptions helps us see where we can change the process.  There is still more to get … Continue reading

The more contractors or departments involved in a project, the more chances for variation and, often, more confusion.  There is always the opportunity for misalignment and miscommunication.   The larger the organization, the more opportunity for missing cues on priorities and direction.  For the process owner, the challenge is to align a team to drive progress … Continue reading

What if you can’t simply reallocate resources to maximize flow because the constraint is the process or a machine itself?  Sometimes it takes a little more creativity to identify how to exploit the constraint (the drum), but just because a machine is the constraint does not mean the fix is more expensive equipment.  The key … Continue reading

Today, companies are focused on increasing throughput – the rate at which a company generates money through sales. They want to expand products, customer base, markets, and so on. They want to grow as much as possible, as quickly as possible. They do not want to focus on shrinking their company or labor force. Yet, the most commonly used financial tools tell companies to focus on cutting costs in order to maximize profits, making expenses the focus of companies, not sales generation. This often leads management to make decisions that actually harm a company.

With all these smart people working on supply chain management initiatives, why are there so few examples of real successful SCM improvements? Why, if management spends millions of dollars on supply chain management technology, aren’t we seeing breakthrough improvements in supply chain efficiency? The key to improve supply chain performance is to treat the supply chain as a system, where efficiency is a by-product of system performance, not a precursor to system performance.

Last week, I did an interview with Joe Dager of Business 901 on the topic of the integration of Theory of Constraints with Lean and Six Sigma. We discuss how it all fits together and the biggest problem facing managers who want to implement a continuous improvement program.

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