VELOCITY - DEE JACOB [1]
Conversely, perhaps for obvious reasons of practicality and budget, suppose you do not seek to improve everything all at once. Then you’re back to the original question: what do you improve? Where do you focus? By what criteria do you select your improvement initiatives and assign resources and tasks? Can you know in advance whether there is really going to be a bottom-line gain for all your trouble and investment?
What people tend to mean when they say, “We must improve everything,” is that they want “everything” to improve. In other words, they want everything – the entire organization – to achieve a significant, overall performance gain that increases year after year. They want to improve the total system that is producing whatever output it was created to produce, and they want over time real bottom-line results to show for it. However, “improving everything” is not the same as “everything improving.” If you doubt this, by all means please do keep reading this book.
Both in the past as well as today, many organizations have invested in large-scale improvement efforts, with lots of training and internal meetings and so on, with sincere conviction. The assumption typically was (and is) that many, many small improvements will accrue in terms of “savings” or efficiency gains or waste reduction or even employee morale – and ultimately the sum of these improvements will yield major gains in profitability, competitiveness, and customer satisfaction. In fact, what occurs is a number of local-area improvements, i.e., less waste in Function B, fewer defects in Function M, less variation in such-and-such a process, shorter processing time within Function T. But many of the supposed gains never actually accrue to the bottom line.
These very same issues as above confront and challenge Amy Cieolara and her colleagues who populate the following business novel, VELOCITY, just as they do a vast number of managers and executives in all types of companies and organizations around the world. These issues are vital, because the need for continuous improvement is truly urgent. There are business and economic realities that are demanding advances in organizational performance – and while crucial in normal times, they never have been more so than in our current times. Yet what are managers, as well as professional practitioners of improvement disciplines such as Lean and Six Sigma, supposed to do? So many companies and other organizations have made major investments in Lean and Six Sigma and other improvement concepts, as well as in plant and equipment and technology, but the yield on these investments is not providing the expected return. What is the answer? What should be done?
This is why we wrote VELOCITY. This book is concerned with three major continuous-improvement disciplines – Lean, Six Sigma, and the Theory of Constraints – and how to combine them so that the organization does achieve systemic gains that yield improved bottom-line performance. Many if not most readers will be familiar with one or more of those three. For the uninitiated, very briefly, Lean was founded upon concepts established in the Toyota Production System (TPS) and emphasizes elimination of waste in its many forms. Six Sigma was derived from Total Quality Management and other quality improvement methods, and its strength is in reducing variation. And the Theory of Constraints (TOC) was created by Dr. Eliyahu Goldratt, the founder of our organization, the AGI-Goldratt Institute. TOC holds that a system constraint is the most practical way to reliably manage a complex system, and once the system is stable and predictable, provides the focus for systemic improvement. And VELOCITY – as a concept – is the means by which the organization orchestrates all of its resources, as well as all three improvement disciplines, and achieves both speed and direction