We are advocates for using Theory of Constraints, Lean and Six Sigma on our projects. We are methodology agnostic and believe that all three methodologies have a place at the appropriate time. To generate productivity gains there are a number of key elements that must be in place. The project pipeline is one of the key elements. The pipeline needs to have enough projects to keep the improvement specialists busy but more importantly they need to be focused on the ‘critical’ projects.
How do we find these business critical projects. This is where the Theory of Constraints (TOC) is useful. The Theory of constraints is a management philosophy introduced by Eliyahu M Goldratt in his 1984 book titled The Goal that is geared to help organisations continually achieve their goals. Even today “The Goal” is the number one best seller in the organisational change category on Amazon, thirty years after first publication. It is essential reading for all operations staff.
Back to our project pipeline. How do we go about identifying these projects. For those that are new to Theory of Constraints we need to understand a few of the key concepts behind theory of constraints. To help our understanding the analogy we like to use is water flowing through a pipe of various diameters. The rate of water flowing through the pipe represents throughput, the rate at which we produce a unit of production (can be manufacturing, processing or services based). We have explained this concept in more detail in the attached screencast. Click on this link to view the screencast. Once the process constraint is identified we now know where we need to focus our improvement efforts. We’ll cover off how to identify the improvement projects in an upcoming post.