Find Your Bottleneck: Theory of Constraints in Practice

The Theory of Constraints (TOC) #

Popularized by Eliyahu Goldratt in his business novel "The Goal" (required reading).

The principle is simple: a chain is only as strong as its weakest link.

In a factory, the plant's TOTAL capacity equals the capacity of the bottleneck. Period. If you improve a machine that is NOT the bottleneck, you haven't improved total output (throughput) at all.

The 5 Focusing Steps #

Step 1: Identify the Constraint (the Bottleneck)

How do you find it?

• Where work-in-process (WIP) piles up BEFORE the machine.
• Where the machine is always running while the others stop.
• Where the expediters are always yelling.

Step 2: Exploit the Constraint

Before buying another machine, squeeze everything out of the one you have WITHOUT spending money.

• No lunch-break stops: Rotate operators. The machine doesn't eat.
• Perfect incoming quality: Inspect parts BEFORE they enter the bottleneck. Don't waste its precious time processing junk.
• Priority maintenance: If the bottleneck fails, the whole plant loses money.

Step 3: Subordinate Everything Else

This is the hard part for managers' egos.

Non-constraint machines MUST stop if the bottleneck is full. If you run them at 100%, all you create is inventory (cost) the bottleneck can't process.

Step 4: Elevate the Constraint

If, after exploiting it to the max, it's still holding back sales, then invest.

• Buy another identical machine.
• Automate loading and unloading.
• Add a third shift for that machine only.

Step 5: Go Back to Step 1

Beware of inertia. Once you elevate a constraint, the bottleneck will move somewhere else. The improvement process never ends.

Drum-Buffer-Rope (DBR) #

The TOC method for scheduling production:

• Drum: The bottleneck sets the pace for the whole factory.
• Buffer: Safety stock placed RIGHT BEFORE the bottleneck so it never runs out of work because of upstream problems.
• Rope: A signaling mechanism that tells the raw-material warehouse when to release material, synchronized with the drum.