Theory of Constraints

Every Value Stream (a look from customer request/order all the way through to delivery) has a constraint. Constraints by definition are the process, which if the Value Stream were accelerated, would start to have Work In Progress pileup in front of it. The constraint is not always obvious and is only seen with a complete system view. Once you accelerate one constraint so that it is no longer the inhibitor to performance then, you have another constraint.

Businesses rarely have such a complete understanding of their Value Streams that they can actually pinpoint where their constraint is. Then, the challenge becomes, trying to determine where to make the investment that will generate the greatest return or deliver the most value for your customers.

Theory of Constraints Recommendation

Lean Business recommends that you start looking into the value that Lean Six Sigma can deliver to your business.
A business starts by building value streams on its most critical processes. This will give you:

• The overall performance of the process in terms of the time it takes from customer request/order to delivery
• The time and quality performance of each process in the Value Stream
• A strong and intrinsic feel for waste or non-value added activities, and
• A profound knowledge of your critical business systems

This may or may not lead to an obvious pinpointing of a constraint, but it will highlight the capability of your system. This will also give you a feel for if you were to accelerate inputs into the system, where the system would start to fail. That would be at the constraint.

This exercise and analysis gives the business the potential advantages of:

• Increasing system velocity,
• Increasing quality,
• A profound knowledge of your systems,
• An opportunity for decreasing operational costs, and
• Guidance into the potential constraints in your Value Stream.

This also opens the door to a robust Continuous Improvement Program.

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