Theory of Constraints Handbook - James Cox Iii [697]
Strategy— The output of a good strategy session is a clear, agreed upon roadmap to improve business results. The TOC strategy process involves using cause-and-effect logic to understand the core conflict of an organization, validate the conflict, and then develop the future reality, which breaks the conflict and adds other “injections” needed to improve the system. Roadblocks are removed and the result is a strategic roadmap to the future. This is done using rigorous cause-and-effect logic, which not only shows the sequence but also the interdependencies in the plan. This is much different from most strategic plans that end up being no more than an isolated list of actions from each department. The focus is on optimizing the performance of the total system versus improving the individual departmental functions in isolation.
Design— Operational/functional leaders and subject matter experts design their operations to align their business processes to achieve the identified strategic bottom-line results. During the design process, they reconfigure the operational model, policies, measurements, roles and responsibilities, and information systems within the context of strategy and proven TOC solutions and execution management tools.
Activate— During the activation process, the newly defined policies, measurements, roles and responsibilities of the operational model and the information systems, and execution management tools are implemented to make the design operational.
This constraint-based system architecture will produce a system where business processes are designed, aligned, and operated in a stable, predictable manner.
Once a system is stabilized and is delivering stable predictable results, ongoing focused system improvements are applied that result in increased sustainable bottom-line results. TOCLSS uses the synergy of TOC, Lean, and Six Sigma to coherently achieve focused system improvement (FSI) beyond what might be accomplished by applying each method individually with a traditional continuous process improvement (CPI) approach.
Improve— Once a more stable operational system exists, the energy is turned to focused improvement efforts to drive the operational system to achieve the desired effects and strategic objectives identified in the organization’s strategy session. Improvement efforts are evaluated based on their ability to increase Throughput, and to reduce Inventory and Operating Expense and advance overall system performance (Jacob, Bergland, and Cox, 2009). Key performance indicators (KPIs) are examined to identify gaps between present and desired performance levels. The gaps are analyzed further and opportunities are assessed to focus improvement efforts at the business process level to achieve the desired outcomes. Improvement experts determine which improvement technique(s) are needed and then identify improvement project priorities. Some useful improvement techniques include 5S System, Standard Work, Rapid Setup Reduction (SMED), elimination of non-value added waste, Total Productive Maintenance (TPM), Point of Use Storage (POUS), Mistake Proofing (Poke Yoka), Visual Tactics, Control Charts (SPC), Capability Studies, and Design of Experiments.
Sustain— Organizational memory is created and supported by establishing the documentation of the strategy, operational design and the focused system improvements details. The organization continually reviews key measurement results to assess, address, and institutionalize the policies, measurements, and behaviors to guarantee that the results are sustained and do not degrade. The organization ensures that they have continued capability to achieve buy-in and maintain expertise.
Following the SDAIS process eliminates the need for an organization to have