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

Scrum is a software development method that focuses on delivering features and products in predictable increments, with consistent feedback. Also, it is a very competent process improvement tool

Scrum approach reduces non-productive work and spreads testing throughout the development process. It allows teams to experiment and fail quickly, which reduces costs and time to market. In addition, Scrum enables a team to respond quickly to changes in the business and avoid scope creep.
 
In Scrum, a Scrum team is composed of three key roles: a Scrum master, a Product Owner, and a Team. The Scrum master is responsible for facilitating meetings and ensuring that the development process proceeds efficiently. As the product owner, he/she defines the backlog. The Team consists of the Scrum Master and team members. The Product Owner is the most senior member of the team.
 
The goal of Scrum is to deliver value to the customer. This means that teams create a functional, user-friendly piece of software every few weeks, known as an increment. Feedback from each increment helps the team decide what to do next. By delivering value frequently, Scrum encourages transparency and collective responsibility.
 
Scrum differs from Agile in several ways. While Agile emphasizes daily interaction between developers and business users, Scrum emphasizes a collaborative approach to project development. I have a separate post citing differences between Scrum and Agile.

• Accelerate business growth with Agile- Part 1
• Accelerate business growth with Agile Part 2: Top 10 Frequently Asked Questions on Agile.

 
In Scrum, developers and business owners work together to deliver software at a rapid rate. This process consists of several phases: planning, daily standup meetings, spring demonstration of the work product, and retrospectives to understand what went well and what needs improvement.
 
In Scrum, the team works under the guidance of a Scrum master, a person who serves as a coach for the team. A Scrum Master facilitates collaboration and helps the team perform at its maximum level. The Scrum Master also protects the team from unnecessary distractions and allows the team to focus on the sprint goal. The Scrum Master differs from a traditional project manager, however, in that a Scrum Master does not assign tasks or provide day-to-day direction.
 
In Scrum, the product owner has responsibility for what the team builds. He/she keeps a backlog of work organized in priority order. A Scrum master serves as a cheerleader for the team and ensures that the Scrum process is followed. Scrum teams are characterized by high morale, and each sprint produces a product ready for market.
 
Although, Scrum process begun for software product development, it can be applied to development other product too. Scrum-driven projects bring-on faster operational excellence.
 
The Scrum framework is an iterative process that requires teams to constantly review their progress and identify obstacles to progress. The process involves a series of iterations, each cycle lasting no longer than a week. In each cycle, the team iterates in order to deliver a new feature. These cycles are timeboxed and are generally completed within a month.

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:  Scrum | Operations | Process Improvement

Keywords and Tags:
#operationalexcellence #processimprovement #scrum #agile #productdevelopment #scrumprojectmanagement #scrummaster #scrumteam

​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

​Today, September 29th is World Heart Day! Wish you all a Happy Heart, dil se …
 
Few days back, I read, that a company in The Netherlands launched a fully automated blood bank robot. The group claims that this robot simplifies the process of processing hundreds of blood donations each day. 
 
According to the news report, this fully automated system can take over manual tasks such as sorting by blood groups and ingredients, sticking labels, scanning codes, etc. It automates the entire process and prevents any potential contamination or damage to the donated items. It is also highly ergonomic. Moreover, the system automates all process activities and saves time.
 
My take on this news is that a blood bank robot will surely improve healthcare process efficiency, especially- The Red Cross platelet shipping box, stem cell research, targeted drug delivery via RBC carriers, handling hospital emergencies and surgeries.
 
Advances in trauma care and open-heart surgery have increased the need for blood. As blood bank robot shortens the blood donation process; hopefully, this will translate in overall cardiac care process efficiency improvement.
 
As a passionate scientist in cardiac therapeutic research as well as a process efficiency expert, a fully automated blood bank robot is a welcoming news!

Lastly but not in the least, I take a moment to pay my regards to the ‘Father of the blood bank’- Dr. Charles Richard Drew, renowned surgeon and pioneer in the preservation of life-saving blood plasma.

Related Reading:

1. Kaizen for pharmaceutical, medical device and biotech industries​
2. How to cut costs strategically using Kaizen
3. Top 30 Continuous Improvement Tools
4. How to Improve Operational Excellence in the Pharma Industry
5. Top 10 Change Management models
6. Continuous Improvement for Drug Industry: Part 1: Introduction to Digitalization in Pharmaceutical and Medical Device R&D.

Follow Shruti on Twitter, Facebook, YouTube, LinkedIn

Categories:  Life Sciences | Operational Excellence | Healthcare

Keywords and Tags:

#bloodbankrobot #drcharlesricharddrew #redcrossplateletshippingbox #redcross #lifesciences #blooddonation #cardiaccare #fatherofbloodbank #bloodplasma #operationalexcellence #continuousimprovement #healthcare

​Here’s an excerpt from Dr. Shruti Bhat’s new book- Top ten strategic decision-making tools for operational excellence.

A common definition of Operational Excellence is that it aims to execute a business strategy more effectively and reliably than competitors. In addition to being more competitive, Operational Excellence leads to lower operating costs and higher revenue.
 
But what exactly is Operational Excellence? It is a broad term that can mean different things for different companies. In reality, it refers to the process of executing a business strategy. By focusing on efficiency, every employee is expected to contribute to the company's success.
 
Operational Excellence efforts have already gained importance in the Manufacturing and Services industry. The pressure to improve productivity, decrease downtime, and reduce waste is mounting.
 
For instance, Operational Excellence in the Construction industry now have a major focus on employee safety. Recent news reports mention that, a large Construction company adopted an employee communications app to realize their Operational Excellence goals. While the Healthcare industry is constantly searching for ways to cut costs and make processes more effective. In fact, few acute-care hospitals are now implementing Lean practices for improving operations.
 
Operational Excellence and Continuous Improvement are the keys to a successful business.
 
Continuous Improvement ensures standardized processes. Without a standard methodology to work processes, leaders will be too busy fixing existing processes to innovate and increase revenue. As a result, they may not be able to focus on new business growth and may even be detrimental to the company's survival.
 
Operational Excellence on the other hand, deals with improving business’s operating efficiency. And it all starts with making sure everyone knows their role and that responsibilities are clear.
 
To achieve Operational Excellence, you need to have an executive vision and written goals for the entire company. The goals should be SMART: specific, measurable, achievable, relevant, and time bound. Then, you must have a detailed organizational structure and a steering team to help you implement and measure the program. You should also have a comprehensive auditable listing of all the governing requirements, including EHS (Employee Health Safety), international standards, and local regulations. Once you've identified your KPIs, you can create a plan to achieve them.
 
Achieving Operational Excellence requires a team effort, and everyone within the organization needs to be involved. In order to achieve this goal, managers should first explain (to their teams) what Operational Excellence is and why it is so important. This can be especially challenging for hybrid workplaces, asynchronous, or on-site teams. Fortunately, there are several tools available to help managers and teams create an environment where Operational Excellence is a shared goal and gives a sustainable competitive advantage.
 
For example, the use of decision-making tools in Smart production is sure way to improve operational performance. Smart production is a popular trend that incorporates AI (artificial intelligence) and decision technologies. This trend is expected to continue and become even more popular in the coming years. Despite its popularity, Smart production is not without risk. This is why incorporating AI and decision technologies into production operations is essential for achieving Operational Excellence.
 
But organizations cannot simply mandate efficiency. They must provide the tools to let employees refine operations and perform their best.
 
So, what are these tools and how can companies utilize these tools?

                                                                                          *********
 
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To know more checkout the book here.

​Kaizen is a Japanese concept that emphasizes continuous improvement. It targets the processes and outcomes of a business to anchor it for long-term success. 

Although Kaizen is present in Japanese folklore for several decades, it was first applied in the corporate sector post-World War II, to improve manufacturing operations of the Japanese companies. It produced significant results for the Toyota Corporation, which led to the philosophy spreading across the world. Now, Kaizen is used by companies in almost all industry sectors.

Kaizen involves making small incremental improvements in a company. By implementing Kaizen into the company culture, it can be permanent. New employees will be trained in the principles of the Kaizen process, and the change will be sustained for years to come.

When considering how to improve customer satisfaction with Kaizen implementation, organizations must begin by recognizing the problem and identifying opportunities for improvement.

To do this, they should engage cross-functional personnel in the problem-solving process. Then test the proposed solution(s) in small groups before spreading them across the entire organization. The process should be supported by the top leadership of the company and include training and appropriate communication between employees.

A Kaizen committee should be formed of five to ten employees. This committee should meet weekly to discuss ideas for continuous improvement and to summarize the changes made after implementing them.

Let’s take an example of initiating Kaizen in an engineering company.

To get started, a Kaizen team must be established. The team should include a manufacturing engineer, a design engineer, two people from marketing & sales function and a quality engineer, in addition to the Kaizen leader. In some cases, the team should also include customers and suppliers to ensure success.

The team must review the current state of the business, product mix, customer base, complaint records etc. and identify the opportunities for improvement. Once the team has identified these opportunities, they can create a strategy to improve customer satisfaction.

The principles of Kaizen emphasize the value of continuous incremental improvements.

Kaizen-ing runs via Kaizen events. During Kaizen events, the Kaizen team must meet and work together with people at grassroot levels from the sales and marketing function to come up with potential solution(s) to the problem(s). These meetings should be centered around a specific problem such as- an increase in defective products, product returns, delayed deliveries etc. Also, the meetings must be held in a physical location within the company- the Gemba.

Further, two tools which will be extremely helpful in this initiative are- Kaizen board and Taguchi loss function. 

Tip: The Kaizen board is an excellent place to document ideas for improvements. 

Moreover, besides the Kaizen leader, the Kaizen sponsor aka process owner should also hold overall responsibility for the results of the Kaizen event. So, before you can implement a Kaizen board in your company, first make sure your stakeholders are willing to make it happen.

Tip: If Kaizen events are part of your business culture, you may want to consider holding them on a regular basis. Often, a Kaizen team uses a Kaizen Template to stay on track and initiate Kaizen in the organization. Using this method, each member of the team contributes to customer satisfaction and teamwork. You can read more on Kaizen here.

Besides improving the customer relationship process, Kaizen also promotes employee engagement and ownership of the company culture. With the right approach, your organization can benefit from increased employee morale and productivity. The benefits of Kaizen extend well beyond improved customer satisfaction!

Are you planning to initiate a Kaizen culture at your workplace?

​Keywords and Tags:

#kaizen #kaizenevents #gembakaizen  #customersatisfaction #gembawalks  #yamazumiboard  #kaizenboard #Taguchilossfunction

This multi-part blog post series presents practical answers to frequently asked questions on improving business entities. 

Its objective is to assist business leaders in these trying times, whether they are learning the basics of business process improvement, planning their first business improvement project, or evangelizing process-oriented thinking throughout their organization.
 
So, let’s get started…
 
Business process management is management of various activities involved in an organization, such as- identification, evaluation and improvement in various processes of a business.
 
Businesses tend to use this action in order to assess and increase productivity, business efficiency, sales, customer satisfaction and overall business performance.
 
Pareto’s 80/20 business process management (BPM) methodology suggests that 20 % of managed activities should bring forth 80% of beneficial results.
 
While there are several advantages of Pareto’s 80/20 BPM methodology, there are few potential challenges too, for example - its sustainability.
 
If a business’s revenue or profit heavily relies on specific clients, then their decisions will have a huge impact on the business’s value. This can be especially harmful if the business relies on a small group of individuals as ‘clients’. In case of loss of a single client, business income and profit could take a giant blow.
 
The way to solve this issue is to find ways of making profit away from the group.
 
Categorizing the top clients and finding attributes that they all have in common is a sure way to mitigate risks. It will then be easier to look for clients that fit the same format.  Higher the number of individuals making up ‘important client’ list the better.
 
Another challenge with Pareto’s 80/20 rule is that it can be difficult for companies to know when they should apply the rule, and when not.
 
Pareto’s 80/20 rule can also be a drawback for a company’s workflow. While it is meant to eliminate activities that waste time and draw focus to the real goals, implementing the rule could just get in the way of methods that are already functioning effectively.
 
Check out more about Pareto 80/20 rule and eighteen different business process improvement techniques here.
 
I shall discuss more FAQs concerning effective & efficient business process improvement in the upcoming parts of this blog series ...
 
By the way, if you run a company that is facing a challenge to thrive in these difficult times, I would suggest that you please revisit your business processes in order to accelerate growth and bring a quick turnaround.