The MRP realms embraced by the sometimes complementary sometimes competitive disciplines known as TOC (Theory of Constraints), Lean, and Six Sigma have been integrated into a “united” theory by an operations expert and author by the name of Reza Pirasteh. This hybrid goes by the name of iTLS. Pirasteh’s goal in uniting these three different schools of thought is to “help organizations deliver their best productive potential by optimizing process efficiency and profitability, as well as aligning products and services.”
While Pirasteh’s work and its implications are well beyond the scope of this humble blog, a few key aims of his methodology are worth sharing here today. It also should be noted that much of iTLS is best applied to the large and/or global firm. However, as we see so often in the world of MRP and ERP, the lessons of the large on a macro scale can often be applied to the small (i.e., SMB market) on the micro scale. Besides, in a globally competitive environment, all manufacturers and distributors need to be aware of the tools available to them for continuous process improvement.
Thus, a rudimentary intro to iTLS today.
Within iTLS, each continuous improvement tool or technique plays a particular role in optimizing operations and profitability. In a recent article in APICS Magazine entitled “A Continuous Process Improvement Case Study” (Mar/Apr 2014 issue), the authors detail which of these three separate disciplines is best applied when – and why. The short version is excerpted from their article below.
(For the full article, check out the APICS Magazine website here.)
- The Theory of Constraints (developed in the main by Eli Goldratt) aims to focus on the global results, subordinating local resources to best exploit the constraints that limit production processes.
- Lean tools and techniques are best suited for elimination of non-value-added activities, particularly within constraints. When these constraints are sequentially eliminated, this favorably affects company profitability.
- Six Sigma helps users understand the sources of variation and variability that cause a process to perform outside of its specifications. Six sigma tools recognize the natural process variability and are able to account for it in order to create a robust process that does not violate customer specifications despite natural, random process variations.
Successful practitioners of iTLS include a pump manufacturer in Brazil, a mid-size family business nearly 50 years old with three plants. Following the concepts of iTLS they took seven steps, over seven months. In doing so they eliminated, coincidentally, seven deadly wastes, while reducing variation and increasing on-time delivery and trimming overall lead time from 7 days to just over 2, all while cutting their part rejection rate to 3.4 ppm.
The 7 steps:
- Identify the constraint
- Exploit the constraint
- Remove sources of waste
- Control process variability
- Control supporting activities
- Remove the constraint and stabilize
- Reevaluate system performance
In today’s competitive environment, one-size (or methodology) does not fit all. But a united hybrid of best-of-breed philosophies can be a driver of productivity – and profits.