21/03/2019 - 09:54

Constraint Innovation – Unlocking Value

21/03/2019 - 09:54


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Constraint Innovation – Unlocking Value

Constraint Innovation allows management to plan for and manage constraints in dynamic, uncertain environments despite scarce resources.

Constraint Innovation is being adopted globally by large numbers of successful organizations around the world to unlock value, and more recently in Western Australia by successful companies including BHP, Roy Hill, Iluka Resources, and several WA Government Departments.

In today's competitive marketplace, all levels of management are constantly under pressure to achieve more with what they have and sometimes with even fewer resources.   

At a strategic level, the challenge is to ensure sustainable growth and profit. 

At the tactical level, the challenge is to increase throughput, reduce lead times, increase inventory turns, improve quality and reduce waste. 

On a day to day level, it comes down to deliverables - achieving due dates without compromising scope, quality, and cost. 

The answer to unlocking value is through effectively addressing your bottlenecks or constraints.  

Open this link to find out more about Lewis Trigger’s Constraint Innovation Workshop on April 2ndhttps://www.imc.org.au/events/constraint-innovation-workshop-2019 

What is Constraint Innovation?

The central insight of Theory of Constraints (ToC) is that at any time a single constraint or pace-maker (bottleneck) determines the capacity of any system which seeks to maximize performance.    The constraint may be inside or outside the enterprise.  Enterprises can improve their bottom line only by better managing constraints.  Cost cutting and improvement activities which do not protect constraints may reduce performance. 

Constraint Innovation, the application of Theory of Constraints, complements the implementation of Lean systems by providing focus and early results.   Constraint Management training gives managers a simple, intuitively appealing way to immediately expose and put into service the hidden capacity of your existing systems.   It does not rely on information technology or software.

Enterprises can defer and even avoid the cost of enlarging the capacity of system constraints by getting more from them.  At the same time, enterprises can reduce process lead times by up to 50%, decrease backlogs of work in progress by up to 30%, and increase throughput and job satisfaction. Constraint Innovation is a powerful universal management approach which is applicable to any organization – public or private, commercial or non-profit, service or manufacturing. 

Open this link to find out more about Lewis Trigger’s Constraint Innovation Workshop on April 2ndhttps://www.imc.org.au/events/constraint-innovation-workshop-2019  

Why focus on the constraint?  

If we wish to improve the performance of a system, meaning to bring it closer to its goal, then the area to focus on is the constraint itself.  By managing the constraint, we can gain the most leverage in improving the performance of our organisation. 

How best then to manage the constraint? 

Constraint Innovation is an extremely powerful common-sense approach to problem-solving whose strength is in its simplicity.  At its heart are 5 sequential steps:

  • The first step is to identify the System Constraint.  Identifying the correct activity is critical since the whole approach is based on managing the constraint. 
  • The second step is to "exploit" the constraint, or in other words, how can we achieve close to 100% utilisation of the constraint. 

For example, if we have a work centre that is a true bottleneck, before investing in additional capacity for it, what we should do is to ensure that we don't waste the capacity it has. 

  • The third sequential step is to "subordinate" non-constraint factors to the constraint.  What this means is that non-constraints must support the constraint by being available to either feed the constraint or NOT to "interfere" with the constraint's operation effectively reducing the constraint's throughput.  

We need to remember that ultimately the throughput of the entire system is determined by the throughput of the constraint.  There is no benefit gained by pushing more work assignments into the system beyond the pace of constraint.

  • The fourth step is referred to as "elevating" the constraint.  It is at this stage that we go to work redesigning the way we would normally operate the constraint, to gain additional throughput from the constraint itself. 

If for example, we can alleviate some of the workload on the constraint by offloading to non-constraints, which have additional capacity, then we can increase the overall performance of the system.  

Once we reach the point of breaking the constraint it means that invariably we have come to a new constraint.  Hence, we have reached the fifth step where we need to identify the new constraint and once more go through the sequential steps that lead us on the path of continual improvement.

The Institute of Management Consultants is hosting Lewis Trigger to present a Constraint Innovation Workshop on April 2nd at Seasons of Perth.  Open this link to find out more:  https://www.imc.org.au/events/constraint-innovation-workshop-2019 



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