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  • NEWS

    Board Strategic Issues:

    Issue 1 – April 2016

    A quarterly issue



    ‘Manufacturing Money’ Click here to order your copy




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  • Tales from the real world: Finding The Weakest Link

    Here is a ‘Tales from the real world’ extract from our book ‘Manufacturing Money’

    Today our tale provides you with a real world example of the ‘Five Focusing Steps’ to improvement. In particularly ‘Step 1: Identify the constraint’ and ‘Step 2: Maximising the constraints output’.

    This is a time when i looked at a problem for months before i finally figured out where the constraint was. I hope you enjoy the tale.

    “A large grey iron foundry, that I used to run, largest in the southern hemisphere at the time, had a massive green sand casting line. At our peak we made over 3000 engine blocks a day, along with crankshafts, flywheels, disc brakes, and other automotive components. The line ran from a basement to two stories in the air and had a few kilometres of conveyor chain, belts, flat bed conveyors and four massive twenty tonne furnaces. Lifting the rate of production out of this system was essential. We used to run the line for 2 shifts, ideally 6 days a week if we could get the people to work, and still had shortages. The line ran at about 135 moulds an hour and had been commissioned in the early sixties. The ground did shake when it ran, which wasn’t often enough or fast enough.

    Our maintenance department completed a massive study about downtime for each of the many machines and sections of conveyor that made up this massive integrated system. We had data on downtime occurrences in each area, their duration, their causes, and plan of fixes. Over a nine day shutdown encompassing an Easter weekend we spent about $100,000 on replacing worn component, modifying downtime causes, replacing switches, lubricating system, and generally given the entire system a major upgrade. We were all confident that this was the game changer we needed to lift our performance and breakout of the scrambling pattern the team had been in for years.

    We restarted production and the mould line speed stubbornly remained stuck in the mid 130’s. My boss asked me, nicely, but pointedly, when were we going to see the returns for all the money we had spent. A week later, no change, another week, still no real change. I was at a loss, we all were. At our downtime reduction meeting where we looked at the data every week we started to ask what was the piece of equipment that shut the line down most often.

    We added some sensors to try and see what was really going on (this was 1960’s technology remember so data capture was non-existent until we built it) and what we discovered was that the main conveyor drive motors were being turned off and on every half second or so by some part of the system. The main mould line never reached full speed as it was being flicked on and off continuously. Because this was happening so often and the sheer mass of the conveyor system meant that momentum kept the whole thing moving no-one noticed that the line was being turned off and on. The most common piece of equipment sending out a ‘stop the line’ signal was the weight transfer machine.

    When you pour molten metal into a sand mould the air that is already inside the mould becomes superheated as it escapes. So that the mould is not disturbed by the force of this escaping air a large weight (700kg+) is placed on top of each mould before the metal is cast. After the metal has been poured this weight is then removed and placed onto another mould. This process occurs using a very simple, if rather robust, ‘pick and place’ style piece of machinery. This piece of equipment was what was actually stopping the line.

    We were all confused as to how it was that this machine could be the problem. It never showed up on our manual downtime logs as a significant cause. The maintenance group and the production supervision went to investigate. The machinery was pneumatically powered (compressed air) and there was a large 2” air line going to the machine. Sometime previously a rubber air hose that connected the main line to machine must have broken. It appears that no 2” hose must have been available so a series of reducing nipples had been fitted and it was actually a 1” air hose that fed the machine. The machine was being fed about one quarter of the air it should have been. It was starved of air, and was running slower than it should have been. No one had noticed. That night we replaced the 1” hose and all of the nipples and fitted a 1.5m length of the correct 2” diameter hose.

    The result was instantaneous, the mould line rate jumped to about 145 in the next month and we peaked at a monthly rate of 170 before I left. With the motor being allowed to actually hit full speed the noise and speed of the system jumped dramatically. All of our downtime reduction efforts became focused on what was stopping the motor from running at high speeds.

    Over the next few months we gradually went to a five day week then a nine day fortnight as we could reliably run more production with less cost and time. Our weakest link was actually a piece of 1” hose.

    The $100,000 did give us value as these items needed to be fixed to support the increased speeds but it wasn’t the weakest link at that time and I wish we had fixed the hose first.”

    If you would like to read our book Manufacturing Money, you can buy a hard copy here, or alternatively download a kindle version here.

    Comments are welcome.

    Have an Awesome Day!



    The Number 3 Reason Why Lean Manufacturing, Six Sigma, And Other Continuous Improvement Projects Fail.

    Darwins’ THEORY OF EVOLUTION Problem

    According to Charles Darwin living things evolved slowly over millions and millions of years. Small changes occurred that were almost imperceptible but which gave one species, or generation a minute advantage over another. Over many generations and a large span of time these minute differences grew larger and larger and became significant in terms of the ability of a species to survive. The diversity of species that have been created by this process and the incredible adaptations we can see around us led Charles Darwin to develop his Theory of Evolution.

    A little remarked upon outcome of this process is that 99.99% of the species that have ever lived on Earth are extinct. The adaptations that occurred were either irrelevant or negative to their ability to survive, or the environment around changed so rapidly that their approach to finding improvement took way too long and they could not survive in the new environment. The dinosaur’s inability to adapt to the climactic changes after a meteor strike is a commonly used example.

    Many improvement programs have befallen the same fate as the dinosaurs. The improvements that were identified were too small, incorrect, or not focused on the area of biggest need. The program took too long to show any meaningful return and still consumed funds and time.

    An improvement program that must support large investments in time and money with no payback for months or years will go the way of the dinosaurs rather than the Galapagos turtle! Usually the program becomes the first victim of the monthly business unit review, next year’s budget submission, any form of short term cost reduction program, or just plain old fashioned neglect.

    What Do We Do Differently?

    Any investment in continuous improvement must show an almost immediate return. How long is immediate? Within days, or two weeks at the absolute most! If you are not seeing an improvement in the FINANCIAL performance of your business within two weeks then either the program is wrong for you, you are doing it wrong, or it is focused in the wrong area of the business.

    Focus on Results, not Certification. It does not matter how many people you have who are certified as Lean Six Sigma Black Belts, or how many of your supervisors have completed Front Line Management or any other form of certification. These are all good sources of knowledge. What matters is how much real cash has been generated by applying the skills into your business. Our customers pay our business and ultimately all of us for what we DO, not for what we KNOW.

    Focus on Measurements that allow everyone to see the impact of their actions on the business performance as a whole. The only result that matters is the impact on the business as a whole.

    The “I’m OK because my department is improving, it’s all that lot over there that are the problem” doesn’t help you achieve the measurements that really matter – that is, the enterprise level measurements.

    Please feel free to include your thoughts below.

    Comments are welcome and encouraged.

    Have An Awesome Day!



    DIFOT of 100% is a normal occurrence

    Welcome to our next installment of our Current Client Result Series. A short series of results from current clients that we are showcasing once a week over the next few weeks.

    Today we hear from Leon Joyce. Leon is the Director of Larnec Doors in Swan Hill NSW

    Are these the kind of results you have been looking for?

    “Before we started working with Jason we had a lot of late orders and many customers ringing us up to see what the ETA was for their job. The phones rang continually. I didn’t believe that DIFOT (Delivery In Full On Time) of 100% was possible.

    Now customers do not have to chase their orders and DIFOT of 100% is a normal occurrence. We can be proactive rather than reactive about the business and focus on what is coming up in the future instead of just looking at today.

    I come into the office, get a coffee, and walk two laps of the factory without anyone running up to me with an emergency. I now do the job I am paid to do. This is a fantastic feeling for me and for the team.

    We worked with Jason as a sounding board; Drawing on his experience in many industries to assist solving our problems has been great, he would either confirm we were on the right track or suggest other approaches that would achieve the desired outcome we were after more effectively. “

    Leon Joyce – Director, Larnec Doors, Swan Hill NSW

    If you or someone you know wants these kinds of results in your business call me on 0488 337 666 for a chat about how we can help.

    If you would like to read more about real life results that can be achieved in your business, click here

    I look forward to speaking with you.




    The Number 2 Reason Why Lean Manufacturing, Six Sigma, And Other Continuous Improvement Projects Fail


    Any change project, or any change we want to make in an organisation will involve work. As a result of a project launch or kick off training, the organisation will make commitments to implement the new philosophy.

    New activities will need to be undertaken. There will be action plans, responsibilities, and committed dates. All is good, people are enthusiastic and there is a positive sense that this new approach will make a positive difference for the individuals and the business. We have used the magic wand to point to people around the organisation and given them new jobs to do, possibly new roles to perform. We may even have an organisation chart that shows that someone is now an ‘Improvement Champion’, ‘Project Champion’, ‘Lean Facilitator’ or some other title. They have been touched by the Magic Wand!

    Here Is Where The Problem Begins

    Most of our employees already have a full list of things they need to do and responsibilities they need to perform. If you are unsure about this, go and ask them! Many people already feel that they are not completing all of the jobs they are already supposed to be doing, even before the new round of tasks and possibly roles were allocated. ‘Work Smarter’ we are all exhorted to do. For most people it just feels like ‘Work Harder’ because they are not trained or equipped to ‘Work Smarter’. The effect we produce is to overload people even further than they already feel. I am not talking about either my or your perception of the reality of over/under work, I am talking about theirs. Their perception of being overloaded already and having you throw more work on top of them is what counts.

    People then become further and further behind. Management becomes frustrated with the slow or non-existent progress. Project reviews become drawn out and painful events that tar the project with negativity. The desired results which are so close and easy to achieve seem to be elusive. No one makes any more money. The project slowly dies.

    What Do We Do Differently?

    A. We have a long list of things we need to do to START implementing the improvements. We also have a long list of things that we are already doing. We need to create a list of things that people can STOP doing so as to create capacity for them to implement the changes. There will be a number of tasks that can be eliminated/streamlined/automated out of most people’s days if you really help them to work through it. This helps them to feel (that word again) that they have the time to implement the changes and that the new program is not just overloading them even further.

    B. We all have only 24 hours in a day. What we do in that time is up to us. I do a survey of people at the events I speak at and 60%+ do not use any form of diary or time management system. Another 30%+ use a diary to capture appointments only. Only about 1% use a diary to schedule important time to work on business issues. I have not met anyone who has put their hand up to say that they take time to reflect on the day’s activities and to learn what they can do to improve (except for my clients who have been trained in using a time management system). This means that people have tremendous wasted capacity in their days that can be deployed to focus on critical improvement tasks. Usually this can be done in addition to their normal key duties and them having a less stressful and shorter working week. Training in Time Management, and then having management follow through that the system is being used and has become routine, is a massive opportunity. Its an opportunity for you to improve your business. The follow on from this is that the chances of your improvement program staying alive and delivering timely results for you and your business is greatly improved.

    Please feel free to include your thoughts below.

    Comments are welcome and encouraged.

    Have An Awesome Day!


    1 comment.

    Financially We Are Back In Control

    Today we hear from Paul Goard – Brumby Aircraft Australia, Cowra NSW

    Are these the kind of results you have been looking for?

    “When we metBrumby testimonial  Raving Fans Jason our business had no marketing approach and we ran from week to week managing cash flow.

    We worked with Jason to develop a low cost marketing plan that (along with making a great plane) has resulted in a solid pipeline of orders for our Brumby 610 aircraft for the next 4-5 months.

    When this happened we realised that we did not have a system that allowed us to manage the aircraft production as well as the other jobs that were coming into the workshop. The workshop was cramped, jobs were taking way too long and we could not confidently tell a customer when they would see their plane completed. Jason then worked with us to put in place a production system that (within 2 weeks) has significantly improved productivity of the workforce and given us transparency of where every job is at.

    The peace of mind this gives us has been fantastic. The reduction in stress and confusion amongst everyone has been massive.

    Financially we are back in control and I can spend time growing the business knowing that the workshop is running smoothly.”

    Paul Goard – Brumby Aircraft Australia, Cowra NSW

    If you or someone you know wants these kinds of results in your business call me on 0488 337 666 for a chat about how we can help.

    If you would like to read more about real life results that can be achieved in your business, click here

    I look forward to speaking with you.



    Understanding our financials, growing our business

    Today we hear from Warren & Jane Lefbvre – CEO’s, WRL Engineering Pty Ltd, Warren NSW

    Are these the kind of results you have been looking for?

    WRL Engineering “Working with Jason helped us to understand our financials in a way we have never done in our 18 years in business.

    We now know where we need to focus our efforts and we have a system to allow us to see our future workload so we know where we are going.

    We have improved our Marketing materials and process with a lot more people knowing who we are and what we do.

    We are now really proud of the information we send out about our engineering services.

    We have plenty more work to do and working with Jason has us started on growing our business and our financial rewards.”

    Warren & Jane Lefbvre – CEO’s, WRL Engineering Pty Ltd, Warren NSW

    If you or someone you know wants these kinds of results in your business call me on 0488 337 666 for a chat about how we can help.

    If you would like to read more about real life results that can be achieved in your business, click here

    I look forward to speaking with you.



    The Number 1 Reason Why Lean Manufacturing, Six Sigma, And Other Continuous Improvement Projects Fail

    In last week’s post I went through 7 reasons why Lean Manufacturing, Six Sigma, and other improvement programs fail. In this post I am going to expand on Reason Number One….


    Academy Award Syndrome is where a program or project is launched to much fanfare, ceremony, and expense but six months later all that remains is a bunch of faded posters on the wall, boxes of expensive and unused workbooks, and an even more cynical and jaded bunch of employees than we had before.

    In our society we are generally becoming more cynical, we are certainly overwhelmed with the launches of new initiatives from our politicians, from companies that are trying to sell us new products, and the daily media cycle that supports these launches.

    Within a company our new project or initiative that we are all enthusiastic about is probably not the first that has ever occurred. If previous initiatives have been launched and then abandoned our employees can be very cynical and this can cripple our program.

    When we launch a big initiative in the textbook way as prescribed in many books about the Toyota system we have top management announce it to show their commitment, we have training, we have posters, T-Shirts, lunches, videos, (I’m not kidding here, I have seen it happen, sadly more than once).

    Two distinct effects are produced.

    1. A lot of time and money is spent designing the right T shirt, video, poster, etc so that all the brand themes are consistent and cultural subtleties about which colours are appropriate are observed. The list of ways to paralyse the program before it begins is long. The knock on effects are to delay the start of the program, spend money before we have made it, and frustrate the people who ultimately have to do the work to make it all happen.

    Meanwhile your focused, effective competitor is six months further down the track, and you have not even organized the kick off BBQ!

    2. Your employees having seen improvement programs come and go like the four seasons can adopt the following behaviours.

    – Sit back and wait to see if this thing will die the same way as all the others.
    – Actively resist just to be proven right.
    – Have a negative perception about the project before it has started.

    All of these things spell death!

    What Do We Do Differently?

    The effect we want to generate is a change in behaviours that quickly produces improved results. That’s it! Then we want to repeat that effect every hour, every, day, forever!

    We start by just introducing one or two changes in how we work and staying focused on those changes until we see the effects we want to see appear. Then we introduce a few more, and a few more.

    The key thing here is that we go about this in a low key, results focused, and supportive fashion.

    The ultimate compliment you can be paid is when one of your people says something like “Production/quality/safety/housekeeping just seems different/better/cleaner/quieter, not sure what is happening differently?”

    Actors collect their awards after the movie is released successfully!

    We should do the same.

    Please feel free to include your thoughts below.

    Comments are welcome and encouraged.

    In my next post I will deal with the Number 2 Reason Lean Manufacturing and Six Sigma projects fail to deliver a spectacular return on investment, “Magic Wand Disease”

    Have an Awesome Day!



    Why So Many Lean Manufacturing, Six Sigma, And Other Improvement Projects Fail

    If you have been around a few years you will almost certainly have seen at least a few fads come and go about how you can improve your business.

    •    SPC (Statistical Process Control)
    •    TQM (Total Quality Management)
    •    TPM (Total Productive Maintenance)
    •    Self Directed Teams
    •    Executive Coaching
    •    LEAN Manufacturing
    •    Six Sigma
    •    Theory Of Constraints
    •    Just about any form of training course
    •    Almost Any Consultants Report!

    The list goes on and on!

    Nothing is wrong with any of these approaches; in fact there is a lot that is right with all of them.

    For an improvement project to be successful we want at least the following criteria to be met:

    •    High Return on Investment (ROI)
    •    Fast Implementation
    •    Ownership & engagement by all levels of the organisation
    •    Sustainable High Performance years after the project commencement

    How many improvement projects and consulting efforts can say they have met the criteria above?

    So why do so many of these initiatives fail to meet the criteria for success when the base technology or principles are totally valid and valuable?

    Here are the 7 most common reasons I have seen project fail in the last two decades of experience in industry. I will go into more detail in each one in future blog posts as well as explaining how to avoid these pitfalls that will cost your business money, and waste everyone’s time and patience!

    7 Deadly Sins That Will Cripple Your Improvement Programs Chances Of Success

    1. Academy Award Syndrome

    Launched with great fanfare and expensive posters the project makes a big splash and then sinks to the bottom to rest alongside the Titanic……and last year’s big improvement initiative.

    2. Magic Wand Disease

    Various people within the organisation are anointed ( by the magic wand), to be champions, owners, leaders, mentors, or some other title that they do not understand, and are not trained, or authorised to do.

    3. Darwin’s Theory of Evolution Problem

    According to Charles Darwin living things evolved slowly over millions and millions of years. A program that must support large investments in time and money with no payback for years will go the way of the dinosaurs, rather than the Galapagos turtle!

    4. Assassination By Budget

    Headcount and budget commitments must be met and anything that is not essential, (moderately performing improvement projects being the first to go) is chopped by managers so they can retain what they regard as an essential core.

    5. The Path of Least Kicking

    Departmental Managers and supervisors will always respond to who screams loudest, and who can kick the hardest. At monthly reviews the pressure will be applied to make more, spend less, and cut anything to have a better month next month! Improvement projects will be quietly ignored.

    6. Spectators Syndrome

    The project was initiated by the CEO, HR, Head Office, etc, etc and there is no understanding or buy in by the people who have to do the work. These people will sit back, fold their arms, and wait, then watch for someone else to do the work. The champion gets tired, gives up, and blames others for not being a team player!

    7. One Man Band Complex

    The Project becomes an extra ‘Thing to Do’ for people who already fell they are overworked, and overloaded. With only so many hours in the day, and no extra time being provided the project becomes one more task on a long list of things that will never get done amongst the daily essentials of satisfying customers and managing crises.

    I have tried to be somewhat light hearted about this, however these shortcomings in the way projects have been run have cost millions of dollars in expense, and more seriously probably tens of millions of dollars in lost opportunity.

    Over the next few weeks I will go into more detail on each of these shortcomings, and more importantly how to avoid them! Let me know by email or comment below if there is any sin in particular you would like to hear about first.

    Comments are welcome and encouraged.

    Have An Awesome Day!



    Putting My Money Where My Mouth Is

    6 Months ago, not quite on April Fools Day but close, I invested a substantial sum of money and jumped into business ownership alongside already existing consulting work with my select group of clients. I had been looking to make a business acquisition for nearly two years and now am the proud owner of a business that markets, sells, designs, manufactures, and installs pergolas, sunrooms, carports, and other types of home additions.

    It is an interesting journey transforming our new premises from an empty shed (with grease and rubber marks all over the floors and walls from the tyre mechanics that used to work there), and rebuilding it into a classy showroom and a hive of activity after hiring staff, and building the business systems (many of them from scratch).

    A lot of my writing into the future is going to be sharing the journey from starting up, through to being operating cash flow positive (see my book Manufacturing Money on why I harp on about this requirement), and then into future growth. There are significant learnings through this period and into the future that I will be sharing with everyone, and these will form the basis of a new and an upcoming book for business owners that I am writing.

    I am looking forward to sharing this journey with you.

    Have an Awesome Day




    Start Here, Now: Identifying And Removing Bottlenecks In Your Business


    So far we have defined what you want as an outcome of the change program; we have looked at how to understand our financial statements and how to use them to assess options. We have looked at the obstacles that lay in our path.

    Now we are going to start to look at YOUR business, specifically.

    Why your business is like a chain

    Within the Theory of Constraints body of work that was developed originating with Eli Goldratt, there is a commonly used metaphor for a business that is referred to as the ‘Chain Analogy’. We are going to use that metaphor to help get started.

    Think of your business as a series of operations and activities that each form one link in a chain. The work flows from one link into the next where it is processed, and then ultimately, once the work has progressed through all of the links, it is delivered to the customer and the cash flows back to your company. In a simple form the work may start out with marketing activities that generate an enquiry, that leads to a quote, a sale, then an order, moves into production, despatch, invoicing, and finally to receivables.

    The financial performance of our business is like the load capacity of our chain. The stronger the chain, the stronger the business. What do we all know about chains? When you increase the load on a chain, any chain, the chain is going to break down at the weakest link.

    How to focus your efforts for the fastest and most profitable improvements

    As managers we are always being asked to improve the business, so that is what we work on. However, often we are responsible for only a small section of the business, one link in the chain, so that is where we focus our improvement efforts.

    Think about our chain again. If we are working on improving a part of the chain that is not the weakest link, we are not going to strengthen the chain as a whole, therefore we will not see great improvement in the overall performance of the business. Investment projects are notorious for under-delivering on paybacks to the overall company bottom line. We show performance improvements in our local areas, but the overall company bottom line does NOT change in a breakthrough fashion.

    The invalid assumption we make is that improving performance locally results in improving performance in the global system. Investing to improve performance in anywhere but the weakest link in the chain will not result in the best possible return on investment for your business.

    It is a waste of money, and indicative of a poor understanding of what drives cash flow, for any company to undertake a ‘company-wide’ improvement program. Why would you strengthen all of the links in the chain when it is only the improvement activities on the weakest link that will deliver a solid return on investment?

    To achieve the speed and magnitude of results that are required in the rapidly changing and increasingly demanding world of 21st century business, we focus our attention on the weakest link and lift its strength as quickly as we can.

    So, where is it, and what do we do when we find it?

    The five focusing steps to improvement in any environment

    The five focusing steps was also developed as part of the Theory of Constraints. It is a simple and rapid to use tool to begin to help you and your team work out how to begin improving your business.

    Step one: Identify

    Here we identify where in the system the flow of money is being blocked up.

    Remember, here the chain analogy that encourages you to think of the business as the entire system is broken up into departments or processes (links). Some common bottleneck examples include:

     – A certain machine within a factory.

     – A process that produces less output than the rest of the system, e.g. marketing can be a constraint on the money flow of the business if there are insufficient leads flowing into the sales process.

     – Policies, e.g. batch sizes in shipping or processing that mean we overproduce some products while being out of stock of products that could be sold immediately.

    Some clues to help you find this bottleneck is to look for the most heavily loaded resource, look for where stock piles up, or what piece of equipment everyone is terrified of breaking? It could be a supplier, a skill set, or just about anything.

    This not a process that should be buried in weeks of data analysis, it is an intuitive perspective of the group of people who work on the business (chain) you are looking to improve.

    Step two: Maximise

    In the original TOC (Theory of Constraints) literature, the stage is called ‘Exploit’. I find that this term has too many negative connotations attached to it and it tends to alienate people with whom we are trying to work to implement the concepts. I do want to be faithful to the original material, however.

    In ‘Maximise’ we look to change the way you run the constraint so as to maximise its output. This may include some of the following ideas that we have used with clients when a machine has been the constraint:

     – Run it through meal and shift breaks.

     – Speed up cycle times.

     – Make sure the operator never has to leave the machine causing it to stop.

     – More endurance. More performance.

     – Shorten setup times.

     – Ensure the raw materials are always present.

     – Ensure all information needed by the operator is provided, and is clear.

    Stand by the constraint activity and watch. Look for anything that reduces the output.

    Standing by the constraint activity and watching is not a five-minute activity. This activity is described by former Toyota chairman Fujio Cho as “Go see, ask why, show respect.” We want to station ourselves at the constraint, see what is happening, ask why things are being done in that way, and show respect to the human beings that are conducting the activity. We will need to spend hours, possibly a few days to truly understand all of the issues that are hurting the constraint.

    Apply whatever continuous improvement tools and resources (Lean Manufacturing, TPM, Six Sigma, or all of them) that you  have onto this process, and ONLY this process. There are 24 hours in a day, this equates to 86,400 seconds. Until all 86,400 of these seconds are used productively to generate throughput you do not have a capacity problem, you have a management problem.

    This is good.

    Management problems can be changed easily, far more easily than technical design failures, or tolerance stack ups, fatigue test failures, and many other more complex ways that a process can fail.

    Step three: Subordinate

    This is the trickiest part of the process. The whole organisation must change its behaviour to support the constraint. What is best for the constraint is the most important thing, and this often means other parts of the organisation may have to wait, share or give up resources, change operating policies, etc.

    For example, they might have to:

     – Make more regular and special deliveries to ensure that the constraint never runs out of material.

     – Buy more expensive and higher quality tools to reduce breakages.

     – Modify forms and paperwork so they are easier and faster for a constraintoperator to complete.

     – Increase maintenance focus on this machine to reduce downtime.

     – Purchase a more expensive raw material in order to improve yield.

    In the initial enthusiasm, we will subordinate; maintaining this change in organisational priorities is tricky and requires constant monitoring. They say ‘Old habits die hard’ for a reason. This reversion to old behaviours, old organisational policies or structures and move away from the subordination to the constraint is the most common reason I have encountered for an organisation to experience deterioration in the rapid improvements that have been achieved. Many of our clients experience this problem (even if we have warned them). They have their learning experience, and then restore the old behaviours and see the performance improvement disappear. This is the hidden killer of organisational change.

    Part of subordination is to examine what you should stop doing. Very simply, you stop undertaking any improvement activity, or any activity on a non-constraint, that can be stopped. Redeploy any of this capacity that can usefully be used by the constraint. Eliminate the distraction of anything that does not relate to supporting the constraint and can be stopped without hurting the business. Stop them all. Now!

    Step four: Elevate

    If after having first sweated out all the capacity you can, by genuinely following Steps One to Three, you still need more capacity, you can further elevate it by finding another machine, person, whatever it takes as long as any increase in investment or expense is less than the income generated by the throughput.

    Step four is where investing in equipment and software can add value to increase capacity at the constraint. Investing in software, equipment, people, training is a waste of time and money on a non-constraint as the throughput of the system does not increase. Investing in the constraint before you have implemented the first three steps will probably give you an improvement in throughput but at greater cost than was necessary.

    Step five: Don’t let inertia set in

    Often steps one to three are sufficient to break the constraint and achieve a breakthrough in performance. To develop and then maintain a sustainable competitive advantage, an organisation must always be looking to improve. Go back to step one and repeat the cycle.

    Life is better, memories of the bad times fade, the wounds heal somewhat and we can fall victim to the enemy of great human progress, contentment.

    The leadership of a company should celebrate the changes, regather the teams, and then define a new compelling future to move to. Contentment will lead to complacency and then decay. A leader who is never happy because that is a proxy emotion for contentment may drive towards great heights but will not have much fun along the way, nor will their people. The paradox for a leader is to be simultaneously discontented with the status quo and happy with the progress made thus far.

    Comments are welcome.

    If you would like to order the book “Manufacturing Money” click here for details.

    Have and Awesome Day


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