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Continuous Process Improvement

3 Schools of Continuous Process Improvement 

There are 3 schools of continuous process improvement that have been developed over the years in order, basically, to compete with each other.  These continuous process improvement methodologies were developed in isolation from each other.  Practitioners of these methods portrayed them almost as separate religions: mine is better than yours.  In the late 1990s practitioners began “looking over the wall.”  It seems that the three improvement methodologies are mutually beneficial: the weaknesses of one are the strengths of another one.

How We Use These Toolboxes

 In this practice, we use these process-improvement toolboxes in the following order:

1) Theory of Constraints which focuses on increasing “Throughput” – or the amount of what your organization does –  by finding and relaxing  Sequential Central Constraints in your organization,

2) Lean Thinking which focuses on eliminating waste to pick the low hanging fruit to get even more throughput from your organization, and finally

3) Six Sigma which focuses on eliminating variation to nail down specific workstation or equipment issues or service-delivery issues for which the other two methodologies lack sufficient tooling.

 There is another reason we use these methodologies in this order. It has to do with the definitions of quality. We use two sequential definitions of quality:

 1) How well does the product and/or service design meet customer expectations and needs?

2) How well does operations execute that design.

 These are commonly called Quality of Design and Quality of Execution and they occur sequentially… or not. Not infrequently, organizations try to substitute quality of execution for both, essentially ignoring the voice of the final customer in product or service design.

 Both the Theory of Constraints and Lean Thinking focus heavily on the “Voice of the Final Customer.” Six Sigma not so much. Doing the first two methodologies first leads to better quality of design. Six Sigma, on the other hand, is all about quality of execution… on steroids!  Hence the sequence.

Theory of Constraints

 The first major approach to continuous process improvement began in the mid to late 1800s in the hard sciences with people like James Clerk Maxwell who defined the 4 laws of electromagnetism. It was around the same time that the Periodic Chart of the Elements was defined with only about a quarter of the minerals known and another 70 or 80 predicted but not yet discovered. Due to these and similar advances, the physical sciences world settled on a concept called the “Theory of Constraints.” 

 This theory states that in very complex systems there is almost always only one thing that keeps a system from doing more of what that system is designed to do.  Very occasionally (less than 3% to 5% of the time) there are two things in the system that take turns, alternately limiting throughput for the system. “Throughput” is, very simply, the purpose for the existence of a system… it is the desirable result that the system is created to produce.

 This approach to problem solving, namely finding and manipulating the central constraint (or constraints) of the system, is so ingrained in the physical or “hard” sciences that physicists have been trying for 100 years to find one theory that handles all of the other three or four major theories, including the Theory of Relativity by Einstein.  Now, this method of problem solving, of system optimization, was introduced to the social or “soft” sciences in the mid-1980s by an Israeli physicist named Dr. Eli Goldratt in his book “The Goal.” 

This book is about how a manufacturing plant that was eminently closing (within three months) was saved in a big way! It is the very first business novel.  This story introduced a half a dozen rules about optimizing systems by accurately applying bottleneck analysis or “constraint analysis.” 

 In our experience, this is the best method to find the correct place in a business to commence working in that it yields the biggest bang for the buck, the fastest return on investment, etc.

 Lean Thinking

 The next generally recognized process improvement methodology began to be developed in the 1950s by Taiichi Ohno (tie-EE-chee OH-no) at Toyoda Corp.  This evolved into what became known as the Toyota Production System or TPS, the predecessor to Lean Thinking.

 It seems that Toyoda Corp. (predecessor to Toyota Corp.) had been divided up by the Japanese courts following World War II.  The marketing portion of the company was legally separated from the design and production portion of the company and monitored by the Japanese courts in a bankruptcy proceeding.

 So Mr. Ohno who was the head of the truck engine production plant had a problem of survival.  (InJapanat the time, employees worked for you for life… you could NOT lay people off without bearing the social equivalent of FAILURE label for the rest of your life!  And possibly your children throughout their lives as well!)

 Basically, Mr. Ohno ran the Plan, Do, Check, Adjust method taught to Japanese manufacturers by Edward Deming.  Mr. Ohno ran this like a tornado to find things that work and discard the things that didn’t.  The object and focus of the Toyota production System was to hunt down and eliminate any form of waste.  Survival was literally on the line. 

 As Mr. Ohno developed these methods through his truck engine plant, he was so successful that he was promoted to be in charge of all truck assembly.  So, he took his team of industrial engineers and applied these methods to the rest of the truck’s components as well as all of their first and second tier vendors by storm… literally “my way or the highway!” (Whereas they would discontinue a vendor for failure to comply, they would not fire an employee. They would simply move him or her to something like sweeping the floor… for the rest of their lives.) 

 Maintaining secrecy was very important on grounds that they did not want their arch nemesis Nissan to learn what they were doing. Therefore none of the methods were documented.  It was all done by word-of-mouth tradition to the process-improvement staff in Mr. Ohno’s hand-picked Industrial Engineering Department. As these methods spread beyond his own plant, he sent people from his Industrial Engineering Process Improvement Department to other plants and other facilities to teach them how to do it.  He had essentially gone as far as he could in his own plant and was going to his first and second tier suppliers in order to improve cost and delivery performance.

 It was not until the 1970s that his methods were written down because he had to explain them to more people within theToyotamulti-tiered, multi-continent supply system.

 These methods were introduced to the world at large in a book called “Lean Thinking” by Dr. Womack and Dr. Jones in 1995.

 Six Sigma

The third school of continuous process improvement was developed at Motorola Co. in order to compete with the Japanese electronics industry in the 1970s.  It seems that the Japanese had been listening very closely to Edward Deming and had for a couple of decades been steadily improving their quality.  Prior to 1960 anything, including electronics, made inJapanhad a reputation of being garbage.  Nevertheless, by the 1970s companies like Sony and Mitsubishi and other Japanese electronics manufacturers were taking the market share of Motorola and Radio Corporation ofAmerica(RCA-which is now dead). 

 In order to compete with the Japanese electronics onslaught, Motorola developed the process improvement methodology of Six Sigma wherein one will:

1) Define the system, 

2) Measure the system,

3) Analyze the measurements,

4) Improve the system based on the analysis, and

5) Control the system so that it does not ever drift out of specified control in the future. 

 These are the five steps of Six Sigma.  They are typically rendered with the acronym “DMAIC” (deh-MAY-ic).

 By definition “Six Sigma” refers to the “Normal” statistical bell curve. This is the one you were probably graded on in public school. Every “normal” curve has both an average or “mean” value and some variation around this average value.  The way this works in very highly repetitive production is that for a given level of standard deviations away from the average value, there will be, statistically speaking, a certain number of Defects per Million Opportunities (DPMO).

 

# of Standard Deviations

Defects per Million Opportunities (DPMO)

% Good

1

690,000

68.27

2

308,537

95.45

3

66,807

99.73

4

6,210

99.9937

5

233

99.99994

6

3.4

99.9999998

 

Table Reference: https://controls.engin.umich.edu/wiki/index.php/What_is_6_sigma%3F

Six Sigma is all about the quest for perfection… the quest to achieve higher and higher levels of reliability and process predictability & quality of execution. There are many tools used to accomplish this objective.

Sidebar: The Total Quality Movement.

The Total Quality Movement in the 1970s was an effort to throw Nissan, and other competitors, off of the improvement methods thatToyotawas using, Mr. Ohno “leaked” that everything they did was all about quality.  This was a fib! They were focusing on eliminating waste in order to increase throughput: the more you make the more you can sell. Quality-of-execution problems interrupted making more and therefore selling more.

 Toyotahad discovered that in a production system that has very little inventory, quality-related errors shut down the entire production line! This is because, under conditions of fast setup and very little inventory with sequential steps physically close together, when there is a quality-related mistake or omission at any particular workstation you can’t operate it any more until you fix the quality issues at that station or the station that fed the quality error to it in the first place.  Nor can you feed anything downstream from that station because production has stopped!  Nor can you feed anything from upstream to that station, because there is no room! Therefore the entire production facility shuts down!

 However, when you hunt down the quality issues BOTH flow and quality increase! This is what Toyotastumbled upon.  So in the effort to increase THROUGHPUT (which was the whole point all along), Mr. Ohno had to increase quality.  Basically “everything we do is for quality” was a red herring.  This largely contributed to the total quality movement in manufacturing throughout the world. It wasn’t ever, solely, about quality: it was about throughput.  It was about making more stuff to sell.

The reason Mr. Ohno leaked this red herring is because Nissan, his archenemy, could tell that Toyota’s quality, cost, delivery timeliness, and flexibility were all improving: something was up!  So Mr. Ohno put out “quality” (probably because it was quantifiable and measurable) as the reason for their success.  End of sidebar