Monday, May 12, 2008

Two Reasons Why Improvement Efforts Yield Little

Often, companies begin improvement programmes with plenty of noise and fanfare, with promises of performance leaps designed to take them "to the next level". Almost ojust as often, these lofty dreams fail to materialise. There are two main reasons for this: failure to focus and failure to subordinate.

In a number of previous articles we have likened organisations to chains with several links representing the resources. The strength of the chain is determined by ....

Even without seeing the end of that last sentence, I am certain you knew the next words should have been "the strength of its weakest link". In most organisations, no identification of this "weakest link" - the resource that currently constrains the ability of the business to generate throughput. How do such organisations decide what needs improving?

In many cases, companies decide that everything and everywhere needs improving. The resources available for the improvement effort are thus spread thin across all the areas. This is link trying to strengthen the chain by strengthening ALL its links. How much of the effort is useful to the goal of making the chain stronger? Only that which makes the weakest link stronger! Everything else is wasted, as far as the goal of impacting organisational results is concerned.

In this scenario, results from the improvement programme, where they exist at all, are very slow in coming and of far less magnitude than could be the case, given the effort expended. Disillusion sets i, momentum slows and everything grinds to a halt. Until another attempt, applying a slightly different set of tools is made - with similar outcomes. It is no wonder that every new effort meets an increasingly cynical workforce.

Thus we must keep in mind Goldratt's first two rules for properly managing and improving operations, namely:

1. Identify the constraint

2. Exploit the constraint

Next to identifying and exploiting operational constraints, the next most important rule is to subordinate the rest of the organisation to the needs of the constraint. This means that everything else is managed to enable the constrainted resource operate as close to full capacity as possible, while ensuring it works only on the right things.

Managing operations with these rules leads to a situation where all effort is directed at the weakest link. This means that every effort counts. Results are thus quick and significant.

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