Theory of Constraints

A Chat with Mr. Kato, former Managing Director of Toyota Motor Corporation

Process Improvement & The Theory of Constraints

A practical look at how to improve productivity and capacity

The theory of constraints looks at all the weaknesses within an organization and strategizes on how to improve upon them. During our discussion with Mr. Kato, he directed us to this question:
What prevents the smooth flow of business operations?
In his answer, he gave the following advice:

Eliminate constraints to ensure smooth flow.
Pay attention to QEC:
Quality - to ensure the product
Equipment - to ensure the rate of operation
Cycle Time - to ensure process capacity

Steps to removing constraints
1. Imagine all the possible problems
2. Provide preventative measures in the above QEC areas
3. In the process of production preparation, check QEC and confirm. Then, hand production over to the production division.

Priorities
These days, at Toyota and in Japan in general, priority is given in the following order:
1. Safety and the environment
2. QED - for a well balanced process capacity
3. QCD (Quality, Cost, Delivery)

"If you find that there are epidemic problems - start at the source. Go back to the drawing board and re-create the process." Mr. Kato advises. "Eliminate step by step what is blocking the smooth function of the organization.
1. Improve then
2. Standardize - to maintain consistency and productivity

Root Cause Analysis Process

When investigating for root causes - the fish bone diagram is a highly useful analytical tool. In the fishbone diagram, the team investigates all issues related to four key areas:
Man
Machine
Material
Method

Dr. Kaoru Ishikawa suggests that in cases with deep organizational problems, a Godzilla bone analysis is necessary for proper diagnostics. By this he meant an exhaustive analysis of each and every aspect of the companies processes and structure.

"Go to the gemba" Mr. Kato recommends. The gemba is a living thing. Like a human body with lots of organs. Some parts are function well, while others may be sick. There are many possible causes for each particular ailment. It could even be the result of a past action and that only now the symptoms are emerging. In the mind of a doctor, there are lots of scenarios. Management by walking around is also necessary for root cause problem solving. By asking detailed questions to all staff members at the work site and checking each symptom, a proper diagnosis can be made. "Narrow down the problems and eliminate unnecessary things - seek the core of the problem and fix it." Mr. Kato advises.

There are always problems in an organization. By going around to all staff members and asking questions, problems can be found and problems fixed before they turn into bigger problems. "The Gemba people know the reality. However, they may not know the methodology. Balance is needed - experience and method training. For example - learning how to ask proper questions; learning how to take appropriate action to prevent problems; learning how to empower a team to bring kaizen suggestions.

A Team Approach

"Solving problems requires the wisdom of the team. This is the reason QC circles were created. QC circle meetings are opportunities to exchange ideas to improve the processes. "If the team can come up with better methods than other companies, that`s the start of developing competitive advantage." Mr. Kato says.

In the process, the employees` skills grow as well.

If an outside specialist attends and gives direction on how to fix a problem - that particular problem will be solved. But staff will not have learned how to create solutions. So when the next problem occurs, they will be unable to fix it on their own. Also, when the next problem occurs, the working environment will probably be different. (re: the gemba is always changing). Empowerment, team spirit and problem solving skill development are key for a company`s development and competitive advantage.

"There will always be problems." Mr. Kato says. Solutions develop into standardized methods and making standards into policy is key. This is the true purpose and meaning of

standardization ."

Mr. Kato is highly respected at the Toyota Motor Corporation for his engineering know-how and wisdom. You will see from the above article that The Toyota Motor Corporation has its own take on the theory of constraints. What they focus on is ensuring continuous flow processing and eliminating all blockages that prevent a smooth flow.

Return from The Theory of Constraints to Total Quality Control.

Return from The Theory of Constraints to Process Improvement Japan