Shruti Bhat PhD, MBA, Lean Six Sigma Black Belt
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Theory of Constraints: 5 Steps to reduce lead time!

11/9/2022

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the theory of constraints_5 steps to reduce lead time!
The theory of constraints (TOC) is a management method that helps companies understand and improve their processes. This method is based on the concept that a system consists of a series of interdependent processes. This theory identifies the bottleneck or weak link in the system’s processes. In this way, it helps in process improvement, especially to reduce lead times.
 
Ultimately, using this method can help you improve your business processes and increase profits. I have a separate post on What is theory of constraints and what are its principles. You may check it out here.
 
The theory of constraints is a systematic approach to logistics analysis, and its strategies emphasize efficient decision-making. It has five steps that help you improve your processes. You must first agree on your problem and the constraints that are causing it. Once you have agreed on the constraints and what needs to be improved, you can then move on to the next step.
 
The five stages of theory of constraints make it a powerful tool for any business. The first step is identifying the bottleneck, but this can be a difficult task. It is important to realize that there are many variables in a system.
 
By following the 5 Steps, you can create a comprehensive plan for improving your business processes and achieving your goals. You'll find the steps to implement the theory much easier. You may not realize it, but you can take advantage of the five steps to improve productivity.
 
The first step is to identify your weak link and prioritize the activities that will help you improve your process. Your goal is to increase throughput by identifying the weak link and concentrating on resolving it. This process can improve your company's productivity by eliminating waste. In addition, it can reduce lead times and work-in-process.
 
The second step is to exploit the constraint. This step is essential for improving the efficiency of processes. It is important to realize that a constraint does not need to be a permanent one. You should find ways to exploit it so that your system can operate at its maximum capacity.
 
The third step involves eliminating the bottleneck. The bottleneck can be internal or external. It could be a competitor or an influential force in the market. In either case, you must identify and exploit the bottleneck. By implementing an improvement strategy, you will increase throughput.
 
At the same time, you will improve profitability and improve the performance of your company.
If you are experiencing a bottleneck, the theory of constraints is an excellent solution. It is a systematic approach for solving complex problems.
 
After you identify your constraint, the fourth step is that you need to improve the capacity of all other systems in the system. The rest of the system needs to support it and provide a buffer of safety stock to prevent it from being overloaded. The fifth step is to repeat the cycle.
 
You may also need to adjust established policies and habits so that you can improve your output. Moreover, you need to increase your capacity and invest in new equipment or people.
 
Related Reading:​
  1. How to cut costs strategically using Kaizen
  2. Streamline processes and workflows with Gemba Walk.
  3. Top Ten Strategic Decision-Making Tools for Operational Excellence

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Categories:  Continuous Improvement | Operations | Process Improvement

Keywords and Tags:
#operationalexcellence #reduceleadtime #constraint #theoryofconstraints #visualmanagement #kaizen #problemsolving #organizationaldevelopment #reducebottlnecks
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Theory of Constraints

11/3/2022

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theory of constraints
​The Theory of Constraints is a philosophy and a practical guide to managing systems. It provides an integrated approach to management. This philosophy has been widely adopted by organizations across the world.
 
Theory of Constraints is one of the promising process improvement methodologies.
​ 
  • Business Process Improvement for Manufacturing & Service Industry: ​18 proven methodologies to maximize organizational effectiveness, efficiency, and profitability.
 
It was developed to manage systems that have many interconnected parts. It implies that organizations are simpler to manage when they are able to focus on a single constraint. It also assumes that humans are inherently good and deserve to be respected even when they make mistakes. It's a systematic approach that involves six steps. First, a company must define its goal. This is often a measurable quantity, such as the throughput of products or services. This goal is typically related to the success of the company.
 
Once an organization has identified the constraint(s) that are holding it back, it can begin to eliminate those constraints and improve throughput. This is done by underlying process improvement. In some cases, this will require significant changes to the company's culture or business model. This process is cyclical and requires constant introspection. Ultimately, it helps organizations grow.
 
To know more about how to effectively manage organizational change, checkout this video-
Additionally, embedding a culture of Kaizen helps bigtime with increasing process improvement initiatives, more so under the backdrop of an organizational change. Read more about Kaizen and How to use Kaizen for Increased Profitability and Organizational Excellence.
 
The Theory of Constraints is a fundamental management philosophy aimed at helping organizations achieve their goals. It identifies the factors that prevent them from achieving their goals and continually strives to eliminate them. Identifying these factors, also known as bottlenecks, can help businesses become more efficient and profitable.
 
It includes a sophisticated problem solving approach that has been optimized for complex systems. The five-step theory of constraints thinking process is designed to help you organize your thinking when you are approaching a bottleneck or constraint. To apply the theory of constraints, it's important to understand the problem and agree on a solution.
 
Another key attribute of the Theory of Constraints is buffer management. There are many ways to manage buffers in the Theory of Constraints, but one of the most common is by using a three-color visual system to designate buffers. This allows the system to align itself with the constraint. I have a separate post on visual management, you may check it out here.

As with any other technique of process improvement, the first step is to determine what is the constraint. By identifying the constraint, you can begin to prioritize improvement projects, and then, find the weakest link. By improving the weakest link, you can improve the entire organization. This approach is more holistic and based on a holistic view to bring-in operational excellence.


​Related Reading:
​
  1. How to cut costs strategically using Kaizen
  2. Streamline processes and workflows with Gemba Walk.
  3. Top Ten Strategic Decision-Making Tools for Operational Excellence

Follow Shruti on Twitter, Facebook, YouTube, LinkedIn

Categories:  Continuous Improvement | Operations | Process Improvement

Keywords and Tags:
#operationalexcellence #buffermanagement #bottlenecks #constraint #theoryofconstraints #visualmanagement #kaizen #problemsolving #organizationaldevelopment
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Types of strategic decision-making at workplace

10/24/2022

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typs of decision-making at workplace
When you want to make strategic decisions for your company, you should first have a clear idea of what the company's mission and vision are. 

​These may include environmental solutions, turnover, expansion to newer geographies, or a combination of these. Knowing these long-term goals can help you make daily decisions. Creating a mission statement is an excellent way to make this goal crystal clear. Then, you can use this mission statement to guide your strategic decisions.

Elimination by aspects
The elimination by aspects of strategic decision-making technique is a method that reduces the number of alternatives in an analysis by identifying the important attributes of each. The decisionmaker then evaluates the alternatives one at a time, eliminating any that do not meet this criterion. For example, a decisionmaker may consider two car options, one of which is more affordable, and the other is safer. After evaluating the alternatives, the decisionmaker will decide which option will have the best balance of those two attributes.

The elimination by aspects model reduces the number of possible alternatives and outcomes to a manageable number. Nonetheless, this method may produce sub-optimal results if not done correctly.

Functional decision-making
Functional decision-making can be a tricky process. However, it's important to know that cross-functional decision-making is a necessity to get the best answer for any problem.

The process of making important decisions must be delegated to the proper level of the company. This means avoiding CEOs from making decisions that should be made by regional managers. Yet, in today's world, too many decisions are made at the top level of a company, often to the detriment of the company's employees. Fortunately, there are ways to balance the executive team at the center with business unit managers to avoid this pitfall.

Intuitive rational combinations
There is a dearth of literature examining the role of context in influencing intuition. Despite the prevalence of intuitive decision-making, there has been little research into its contextual determinants, nor have studies examined how different perspectives influence intuition. In a study, examining the role of three contextual factors on intuitive decision-making found that contextual factors have a greater impact on intuition than the nature of the decision.

The number of studies exploring the role of intuition in strategic decision-making has increased over the past decade, but there are still some gaps in their analysis. One of these is that the conceptual model of intuitive decision-making includes only one antecedent, and few study researchers explicitly examine contextual variables as influences of intuition. In addition, little is known about the determinants of intuition.

Process perspective
The research on strategic decision processes has not given us an insight into the role of context and the process perspective. The external and internal environments of a firm are intertwined through boundary spanners, but the impact of these spanners is difficult to assess. Thus, we need a better understanding of these processes and what factors are important in strategic decision-making.

The concept of process is usually associated with executive decision-making. Processes include an organization, the strategy-makers, and the issue under decision. Often, a process is framed in terms of a sequence of actions, with each action affecting the next. Similarly, this process perspective is similar to the actual strategic decision-making process.

Planning for change
Strategic decision-making is the process of charting the course of an organization based on its long-term vision and goals. The process aligns short-term goals and objectives with long-term objectives, which can be measured against adherence to the vision. It can help to set clear goals and values for your organization and to ensure that every decision you make is based on the vision and long-term goals. Developing a mission statement for your organization is an excellent way to get started.

When defining change strategy, you must determine the types of decisions you'll make. For example, a decision to change the way you engage your workforce may involve a cultural change, which requires a new approach. Likewise, a decision to change the way you reward employees might require a change in seniority or in supervisor-employee relationships. Once you've defined the types of decisions you'll make, it's time to assign roles to different stakeholders.
How fast a decision is made and how good is that decision determines how far the business will thrive.
​Checkout- Top Ten Strategic Decision-Making Tools for Operational Excellence

Related Reading:​
  1. Kaizen for pharmaceutical, medical device and biotech industries
  2. How to cut costs strategically using Kaizen
  3. Streamline processes and workflows with Gemba Walk.
  4. Top Ten Strategic Decision-Making Tools for Operational Excellence

Follow Shruti on Twitter, Facebook, YouTube, LinkedIn

Categories:  Strategy | Leadership

Keywords and Tags:
#operationalexcellence #strategicdecisionmaking #strategy #strategymanagement #decisiontools #decisionmaking #strategicplanning  #challengesofdecisionmaking
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What is the Strategic Decision-Making Process?

10/22/2022

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what is strategic decision-making process
​Leaders constantly ask themselves: "What is the best way to make strategic decisions?". 

​If you're in charge of developing a strategy, you have probably wondered, "What is the strategic decision-making process?" Well, if you're not sure, let's look at OODA, SWOT analysis, and Power BI. The first step in strategic decision-making is to determine who will own the strategy. And who will be involved in the collaborative process? This decision is critical because it will determine how effectively the strategy is developed.

OODA (Observe, Orient, Decide, Act)
The OODA Loop, or "observe, orient, decide, act," is a process that enables managers to improve strategic decision-making by transforming ambiguity into advantage and risk into results. It is a systematic, cyclical decision-making process. In a complex situation, this approach can lead to better decisions that will improve the outcome.

The observe step identifies the problem or threat in the context of the situation. It also gathers information about the external environment, competitors, and the market. In this process, the entity should recognize that the world is constantly changing, and that all data is only a snapshot of current events. Hence, it is crucial to obtain information as quickly as possible. After gathering the necessary information, the next step is to evaluate the findings.

OODA's loop decision-making process enables organizations to continuously analyze and review scenarios in a continuous loop. This loop uses feedback from data points to make decisions based on the most relevant information. The loop starts with a clear understanding of the problem, gathers relevant data, develops a solution, tests it, and documents it.

The loop model is interactive, and involves the process of gathering information, forming hypotheses about competitor behavior, and acting on the selected approach. The loop model is continuously repeated, and aggressive application of the process gives a business an advantage over its competitors. It also prevents its competition from gaining an advantage over it. OODA's loop process does have a challenge, as teams often get stuck at "D." While this is normal, it can waste resources if not addressed in time.

SWOT analysis
SWOT analysis is a fundamental planning tool that helps organizations to analyze their strengths, weaknesses, opportunities, and threats. It helps in identifying the three core factors of an organization and helps to identify ways to address those factors in order to achieve success. The four key factors include internal resources, external competitors, and technological changes. Understanding your own SWOT analysis and those of your competitors' can help you maintain a competitive advantage.

While these factors give a business a competitive advantage, they can also hinder performance. A thorough SWOT analysis can reveal what strategic decisions are most likely to produce success. After the analysis, the company can choose the best path to pursue.

Data visualization using artificial intelligence (AI)
A CFO has a tough job to perform. He/ She must make strategic decisions on cost-cutting, profitability, and business growth. Unfortunately, data and reporting structures can be fragmented and incomplete, making it difficult to make informed decisions. AI removes those barriers to data and reports, and its seamless integration into the existing business environment makes analytics quick and easy to adopt.

Also, it can be used to visualize data and present it to decisionmakers in various ways. Using AI to make better decisions can boost a business's revenue and resilience. For example, a CFO can create a dashboard with a few KPIs and drill down to the county level, without having to spend hours analyzing a data set. A point to note is that, use data visualization AI software only after validating its authenticity and accuracy.
How fast a decision is made and how good is that decision determines how far the business will thrive.
​Checkout- Top Ten Strategic Decision-Making Tools for Operational Excellence

Related Reading:​
  1. Kaizen for pharmaceutical, medical device and biotech industries
  2. How to cut costs strategically using Kaizen
  3. Streamline processes and workflows with Gemba Walk.
  4. Top Ten Strategic Decision-Making Tools for Operational Excellence


Follow Shruti on Twitter, Facebook, YouTube, LinkedIn

Categories:  Strategy | Leadership

Keywords and Tags:
#operationalexcellence #strategicdecisionmaking #strategy #strategymanagement #decisiontools #decisionmaking #strategicplanning  #challengesofdecisionmaking
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What is Strategic Decision-Making?

10/21/2022

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what is strategic decision -making
When you're in charge of making decisions for your business, you need to think strategically and act accordingly. 

Strategic decision-making requires improvised business strategies and collective strategies to ensure the success of a business. It also requires the consideration of corporate inflection points and cross-business synergies. Listed below are some tips to help you make the best decisions for your business. Hopefully, you'll find these tips helpful.

Plan for change
Strategic decision-making is a process of laying out an overall direction based on a larger vision and long-term goals. By identifying big-picture aims, you'll be able to align short-term plans with your mission and vision. When you map out the strategic path, you'll have quantifiable milestones to measure and track against the overall vision. Then you can make short-term decisions to achieve these milestones.

A key part of strategic decision-making is making sure everyone is involved. While some participation in strategic decision-making may be explicit and voluntary, others may not feel included or have any real influence. But, regardless of how much participation you want to involve in your plan, it will be crucial to determine key performance indicators for your company and set priorities that are consistent with these objectives.

Plan for risk
Organizations must be agile to respond to the changing business environment and planning for risk is a crucial part of this process. In an era of regulatory change, economic volatility, and digital disruption, risk control must be embedded into strategic decision-making. This enables business leaders to plan for risk, improve the agility of their business decisions, and create a culture of risk management. They can assess strategic implications and plan for different types of risks.

Before implementing any strategy or risk management process, it's important to define the objectives. Once these are determined, a risk management group should develop a consensus view of the risks to be managed and record this view on a risk map. Identifying key risks and the associated action plans, if any, will ensure that the strategic decision is properly implemented. Once this is complete, the group can designate an "owner" for each major risk.
​
Listen to options
While many believe that major strategic decisions take place in environments with high validation, a published paper on RPD decision model suggests that most decisions do not take place in such a high-validity environment. Instead, executives follow their intuitions and run mental simulations to explore various options. It is an effective way to gain insight into what you really want. This approach of decision-making can be highly effective in many situations especially during a crisis or when data for decision-making is insufficient.
How fast a decision is made and how good is that decision determines how far the business will thrive.
Checkout- Top Ten Strategic Decision-Making Tools for Operational Excellence

​
Related Reading:​
  1. Kaizen for pharmaceutical, medical device and biotech industries
  2. How to cut costs strategically using Kaizen
  3. Streamline processes and workflows with Gemba Walk.
  4. Top Ten Strategic Decision-Making Tools for Operational Excellence


Follow Shruti on Twitter, Facebook, YouTube, LinkedIn

Categories:  Strategy | Leadership

Keywords and Tags:
#operationalexcellence #strategicdecisionmaking #strategy #strategymanagement #decisiontools #decisionmaking #strategicplanning  #challengesofdecisionmaking
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How to Improve Operational Excellence in the Medical Devices Industry

10/21/2022

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how to improve operational excellence in medical device industry
To truly understand how to improve operational excellence (OpEx) in the medical devices industry, it is necessary to first understand what the value-add is for their markets. 

Then, companies must understand the regulations, standards, and costs of quality. Without this information, they will not be able to effectively apply Lean manufacturing and operational excellence principles. But how do we get there? This post looks at three key aspects of medical device manufacturing, and how they can be applied to the entire sector.

As the industry continues to undergo unprecedented regulatory changes, mergers and divestitures, and value-based payment models, companies must learn how to improve operational performance. To cope with these challenges, companies apply technology and take advantage of outside managed service partners to handle these tasks. These partnerships offer companies the advantage of freeing up internal resources to focus on core aspects of the business. It is essential to find a partner that understands the medical devices industry and has experience in the field.

Lean in Ireland has led to massive success and has turned the country into a global hub for MedTech. The growing scrutiny from different global regulatory authorities has also increased uptake of organizational excellence. This is because companies are constantly monitoring regulatory bodies in different jurisdictions. However, fear of upsetting regulatory authorities has often slowed down the implementation of change in manufacturing. If organizations don't embrace these changes, they risk losing their customers.

Lean is not a new concept, but the medical devices industry needs to look at it in a different way. Although Lean is commonly associated with the automotive industry, it has been slowly adapted to the highly regulated medical devices industry. The benefits of implementing Lean methods in a highly regulated environment are numerous. For one, Lean is not just about eliminating waste. Lean is about enhanced quality, process capability, process reliability, business efficiency and profitability!
​
For more about operational excellence, checkout Top Ten Strategic Decision-Making Tools for Operational Excellence

Related Reading:​
  1. Kaizen for pharmaceutical, medical device and biotech industries
  2. How to cut costs strategically using Kaizen
  3. Streamline processes and workflows with Gemba Walk.
  4. Top Ten Strategic Decision-Making Tools for Operational Excellence

Follow Shruti on Twitter, Facebook, YouTube, LinkedIn

Categories: Lifesciences | Operational Excellence

Keywords and Tags:
#operationalexcellence #operationalexcellenceformedicaldeviceindustry #strategicdecisionmaking #strategy  #strategymanagement #decisiontools #decisionmaking #strategicplanning  #challengesofdecisionmaking​
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How to Improve Operational Excellence in the Packaging Industry

10/20/2022

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how to improve operational excellence in the packaging industry
​When a company strives to achieve operational excellence, every employee in the company can see the value flowing from the business to the customer.

It is a collaborative effort that involves cutting costs, increasing productivity, and cultivating a corporate culture to improve the quality of products and services and reach success. There are many benefits to improving operational excellence (OpEx) in packaging, and these benefits can be realized with the right tools and methods. This post will examine some of these benefits.

Advanced automation technologies can help CPGs (consumer packaged goods) increase overall equipment effectiveness, limiting variability in process streams, materials, machine setup, and utilities. Increasing overall equipment effectiveness (OEE) can help CPGs better respond to consumer demand and avoid operational losses. OpEx improves efficiency of processes needed by OEMs (original equipment manufacturer) and other manufacturers to offer industry-leading products that delight customers. By focusing on these areas, CPGs can enhance their competitive position and improve profitability.
​
Technology is an essential part of the process of operational excellence. Dedicated software provides tools for value stream mapping and cross-functional flow charts. Project management tools enable companies to implement appropriate methodologies. A data-analysis tool can predict future trends. This information allows companies to make more accurate decisions and achieve operational excellence faster. When a company adopts a data-driven strategy, it becomes easier to measure improvements and make better decisions. For more about operational excellence, checkout Top Ten Strategic Decision-Making Tools for Operational Excellence

Related Reading:
  1. Kaizen for pharmaceutical, medical device and biotech industries
  2. How to cut costs strategically using Kaizen
  3. Streamline processes and workflows with Gemba Walk.
  4. Top Ten Strategic Decision-Making Tools for Operational Excellence

Follow Shruti on Twitter, Facebook, YouTube, LinkedIn

Categories:  Packaging | Operational Excellence

Keywords and Tags:
#operationalexcellence #operationalexcellenceforpackagingindustry #strategicdecisionmaking #strategy  #strategymanagement #decisiontools #decisionmaking #strategicplanning  #challengesofdecisionmaking 
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