Hello – and Welcome – from the team at Step Function Velocity! If you are interested in implementing the techniques of Constraints Management in your business, this is the place for you. Our goal is to make it easy to understand, and as simple as possible to implement for you. To do that, we’ve included a quick background, and a clear and complete listing of next steps, so that you can begin your path toward a more efficient and effective production system.
Constraints Management – The Step Function Velocity Definition
The THEORY OF CONSTRAINTS, and Constraints Management, is a Management Operating System that was popularized by Eli Goldratt, initially in his book The Goal.
TOC/CM is a system that strives to look at a process, production or otherwise, as a complete system, and seek to manage the total system throughput by using the concept of ‘a chain is only as strong as its weakest link’, and then managing that link. Applying our systems thinking to the process, we realize that we cannot get more out of a process than the bottleneck (aka constraint) can produce, so we align our production plans and our improvement plans around this.
This creates a powerful management system, one that is virtually opposite of the traditional methods of management, and in doing so provides the opportunity for a firm who properly manages with this system a significant advantage over their competitors who do not.
The Goal: The Book That Started It All
The TOC discussion all began with this popular book, which was a runaway best seller. In it, Goldratt used Novel form to tell a story, utilizing dialogue to display an evolution of thinking, to show how Alex Rogo reacted to the threat of the Factory he runs of being shut down in 90 days if it didn’t improve.
He by chance ran into an old mentor, Jonah, who guided him into thinking about improving the factory processes using concepts that Jonah learned as a physicist; concepts such as understanding what the REAL goal is – to make money, not just show localized efficiency gains.
Alex has an epiphany on a Boy Scout hike, where he discovers that Herbie is holding up the speed of the entire troop – so he works to improve Herbie’s ‘performance’, and thereby improving the entire troops ‘performance’. And in doing so, realizes that the Goal of Making Money boils down to looking at the production system in a different way – we realize that speed is the objective.
With the managerial concept of Throughput Accounting, we now focus on total system Throughput (generating money through sales), optimizing Inventory (money the system invests in that it intends to sell), and reducing Operating Expenses (all the money the system spends in order to convert inventory into throughput). Gone are the antiquated ways of management accounting that apply peanut-butter cost allocations to everything, distorting the real cost and margins of products.
We learn about how real world issues such as of ‘Dependent Events’ and the problem of ‘Statistical Fluctuations’ (aka unforseen problems) can be utilized to be ready when Murphy striks, while protecting margins and customers. We learn to apply these management techniques to the system (the whole chain!) instead of sub-optimizing efficiency gains independent of the system.
And perhaps most important is the concept of evolving and aligning our thinking and communication to all our employees, peers, and superiors, toward the implementation of the revolutionary management technique.
The Theory of Constraints and Constraints Management In Action
Check out the video below – it’s a good introduction into what the concept of the Theory of Constraints looks like, and how to begin thinking and managing in a Constraints Management frame of mind…
How the Throughput Production System Helps Implement Constraints Management
Many who have been inspired by The Goal, or the concept of Constraints Management ask a similar question: “How do I get started?” Or, “What do I do next?”
Well that is exactly what we have strived to put together for you with the Throughput Production System. Our system provides you with a method to begin analyzing your operations for the right opportunity, ask the right questions to determine the type of implementation that best suits your production system, guide you toward gathering the right data and setting the right goals, and then shows you real-time Performance to Plan data to watch the gains come home!
Watch this quick video to see what an implemented state of the Throughput Production System implementation could look like for you:
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Implementation Options, and Next Steps
With the Throughput Production System, you will find several levels of implementation available, from your own design and personal implementation, to a complete Partnership approach where we apply our years of experience to helping you Transform your organization and sustain the gains! And of course there is guidance, assistance and training along the way, all determined by your wants and needs.
More Information
Now before you start up and take action, we would like to ask you to take the time to subscribe to our newsletter, which we use to provide ongoing training snippets that we find helps with the cultural transformation. We will periodically send out some lessons learned, training moments, and even webinar information – All Free!
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As a thank you, you’ll get instant access to our very popular eBook, Harvesting Lean Implementation, which helps provide an answer to the dilemma that many have experienced – “Why Does Lean Never Seem to Hit the Bottom Line?” Constraints Management and the Throughput Production System will help make sure that all your improvement investment is realized – and then some!
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Thank You So Much!
Thanks for your time and interest! We appreciate you and the trust you place with us – and we commit to helping you along your path to improvement following the Theory of Constraints principles!