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WHITE PAPERS -

Continuous Improvement TRIO

The top elements of TOC, lean, and six sigma make beautiful music together

(From APICS Magazine, May 2006)

You hear it all the time. Consumers want reduced costs and, at the same time, require higher levels of

quality and value. This infamous phenomenon results in a race for survival and profitability as companies attempt

to meet these customer needs. Time and again, the winning businesses turn out to be those strong, conditioned

firms that have lots of experience in operations and exceptionally well-tuned processes. Companies typically

achieve these qualities through process improvement methodologies.
 

In fact, businesses often will employ numerous different approaches, including - but certainly not limited to - Just In Time, lean, six sigma, and theory of constraints (TOC). Very often, each manager in the firm has a tendency to use the approach that shows the best results for a given type of project or the method with which he or she is most comfortable.

Take, for example, a global electronics contract manufacturer with 21 plants, 45,000 employees, and 211 team leaders. This California based business was facing growing demand from its major customers in the medical, aerospace and defense, precision machining, telecommunications, and storage computing industries. At the upper management level there was concern that the best approach was not being deployed at each plant location, and leaders were anxious to find a solution and establish the proper processes.

Determining which methodology would bring the most effective long-term result was an ongoing challenge for this organization. "We were struggling as a management team in trying to determine which tool or strategy would help our group get to the next level in terms of process improvements," explains the company’s vice president and general manager. "We have always had a culture that drove continuous process improvement, but ... we were frustrated at not being able to show tangible results of our hard work."

In order to respond to the dissatisfaction among its team leaders, the company hired consultants, who came to a unique conclusion: Combine the best components of TOC, lean and six sigma to form "TLS." Company leaders hoped this new process improvement methodology would help them achieve maximum cost savings and quality benefits.

Initial conditions The organization in this study had been using continuous process improvement to expose and eliminate root causes of its problems: however, its approach was fragmented. Lean and six sigma wee the two predominant methods that had been deployed and locally adopted. Both practices successfully prompted operations personnel to work on a series of projects that resulted in cost savings and process improvements; however, company decision makers were still hopeful that TLS could provide even higher yields and be systematically deployed across its global organization.

The company consultants designed an experiment that would enable the business to establish TLS as its foremost approach to continuous improvement. Data were collected for more than two years during the trial, and the results were statistically analyzed for significance among the methodologies. The success of each approach was determined by its aggregate contribution to verifiable financial savings as a result of process improvement projects. These savings were validated by the organization’s plant controllers and senior management.

TLS was introduced as a complement to the existing lean and six sigma practices and deployed at 21 plants in a pilot program.

A plant in this study was defined as a production facility that was fully capable of prototyping, designing, producing, and distributing customer products located in various regions in the United States. (Only U.S. operations were studied in order to reduce the effects of cultural, socio-economic, political and other influences on the results.)

The means of assigning the 21 plants with their particular methodology was a natural process due to local preferences, experience with a certain approach, and unique expertise. The assignment of methodologies was as follows:

• 11 plants applied six sigma

• 4 plants applied lean

• 6 plants applied TLS

 

The 211 team leaders in these 21 plants had been trained in - and were using - one of the three methodologies. Over the more-than-two-year study, the plants completed 101 projects in all. These tasks were studied for accuracy in claimed improvements, savings, and approach.

While the results from all projects were documented, the plant personnel and the trainers were unaware of the ongoing comparative study, as the research was designed in a double-blind format to cut down on any potential biases.

 
 

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