For many years, Lisa Scheinkopf has been teaching, coaching, and implementing improvement projects using the theory of constraints.
She has identified two critical prerequisites to process improvement projects. In some projects these prerequisites are obvious and people intuitively understand their importance. But in other projects they are not so clear and they are easily ignored.
Ignoring these two prerequisites leads to trouble. You could optimize only part of the system in a way that causes detriment to the system as a whole. Or you could spend your energy on the wrong steps in the process.
What are the prerequisites that Scheinkopf has identified?
1. Define the system and its purpose.
Before you can make any improvements, you have to know what you are trying to fix.
Where are you drawing your lines around the box that represents your system? Is it around your company? A department? Yourself?
What are the inputs into this system and what are its outputs? What is the goal of the system? What are you trying to accomplish?
In some cases, these questions are easily answered. If you are working with a whole company, it’s likely that the goal of the system is to “make more money, now and in the future.”
The company has other goals related to employees, stockholders, and customers. But the primary goal for the system is financial success in the present and in the future.
But what if the system is not the entire company? What if the system is a part of a company that provides a service to other parts of a company?
Scheinkopf describes a project she did with the distribution system in a large, multisite chemical company. At the beginning of the project Scheinkopf asked the team to examine the larger system and the role that distribution played in that larger system.
This examination caused the team to focus on changes to the distribution system that would improve the throughput of the entire corporation.
Had the team not looked at the larger system and its goal in relation to that system, the team might have made changes in distribution that did not help, or even harmed, the larger system of the corporation.
2. Determine the system’s fundamental measurements
What improvements do you hope to make in the system? Once you have defined the system and its purpose, how do you measure success or failure of the system?
Let’s say the system is a company and its purpose is to make money, now and in the future. You then have to ask, what does that mean “to make money, now and in the future?” What should we measure to know how well we are doing? In this case, you will be watching profitability and return-on-assets to see if they are improving over time.
But what about the distribution system we discussed earlier? The company doesn’t directly measure the profitability of the distribution system. And the profitability of the entire corporation doesn’t tell you anything about how well the distribution system is performing.
In the case of the distribution system, the team found some measures that tracked how distribution influenced the corporation’s constraint. In addition, they identified some financial metrics inside distribution that they had the ability to control.
Scheinkopf is not suggesting that we should spend unnecessary time defining the system, its purpose, and its measures before we even start on an improvement project. It would be easy to spend too much time refining the answer to these question and never get started on the improvement itself.
She is simply suggesting that the team enter into a dialog about purpose and measurement in order to bring focus to your project.