The Theory of Constraints and Bottlenecks by James Cox - Book Report/Review Example

Due: “The Goal” Eliyahu Goldratt Characters Alex Rogo- manufacturing plant manager, main character 2. Bill Peach- Company executive 3. Fran- Alex’s secretary 4. Jonah- Advisor 5. Lou- chief accountant 6. Stacey- plant inventory manager 7. Julie Rogo- Alex’s Rogo’s wife 8. Bob Donovan- plant’s head supervisor. Introduction ‘The Goal’, in its simplest form, is based on making effective and informed decisions. It is a step by step description of the many misconceptions and fallacies intruding much of today’s society views (Goldratt, 34). The evident lessons learned from this book are on ‘The Theory of Constraints and Bottlenecks’ which are limiting factors to achieving any set goals. This report clearly defines the performance weaknesses identified in the book and how they were mitigated. By reading this book, the lessons learnt is more than can be applied and by far very useful. It is hard to imagine a management book in novel form ever approaching this one in usefulness. The theory of constraints reflects the adage, ‘A chain is only as strong as its weakest link.’ According to Goldratt, an entity’s performance is dictated by constraints. Constraints are restrictions that prevent an entity from maximizing performance and achieving its goals. His brilliance is clearly displayed through his thoughtful depiction of the production process in such a way that even a layman could understand. Running any form of business can be a constant battle. External factors can be tough dealing with especially if they are outside someone’s control. Individuals must first struggle with the internal bottlenecks and constraints that they create for themselves (Cox, James, and John, 69). Goldratt describes a management philosophy that he calls ‘Theory of Constraints’. Discussion In the novel, Gadratt conveys his message by relaying the struggles of Alex Rogo, a plant manager. The character is trying to figure out how to salvage his career and at the same time on how to also save his marriage. Things were looking dire and Bill Peach gives Alex three months to turn operations to being successful. Alex comes up with important discoveries in his entire journey as a plant manager that sharpens his critical thinking skills. This book is valuable on so many levels. It explains businesses as systems, ways on how to improve the performance of a system and even provides a replicable process that could be used to analyze any engineering or human system. Two metaphors involved in this book are on how to speed up a slow moving group of boy scouts and improving a manufacturing process. These two metaphors create a scenario where they are related to explain the theory of constraints. As a management philosophy, Theory of Constraints uses scientific principles and logic to guide in decision making processes. The goal of this philosophy is to assist entities to achieve their goals and continue doing so through changing times. In simple terms, the Theory of Constraints is a recipe for change (Goldratt, 57). The underlying premise of this theory is that every entity has a stumbling block, which in this case refers to a constraint that hampers the attainment of set goals. Constraints can either be ‘internal constraints’ or ‘market constraints.’ The constraint management process is continual due to the fact that processes are dynamic. Constraints may change due to two reasons which are; The initial constraint being successfully managed and/or Due to the changing environment, a new constraint becomes established. Internal constraints can be subdivided into; physical constraints and policy constraints. Physical constraints is divided into capacity constraints (labour and buildings) used to convert raw materials to end products, and material constraints (raw goods and work-in-progress)that are converted to finished products by the entity. Policy constraints are divided into mindset constraints, methods constraints, and measures constraint. Mindset constraints refer to the culture of the entity. The mindset is responsible for organizing the company’s thinking and assigning priorities to different courses of action. New measures that are not in line with the prevailing mindset are given little attention or even ignored. Methods constraints are the procedures that determine how the entity’s day to day operation is carried out. Measures constraints are liable for creating scenarios that encourage behaviors that are detrimental to the performance of an entity (Cox, James, and John102). Market constraints are concerned with the demand of an entity’s goods and services. It exists when the demand for such goods and services is less than or equal to the capacity of the organization. The theory of constraints states that; no matter how well a system performs, it must have at least one constraint that limits its performance. This constraint is the system’s ‘weakest link.’ A system can only have on constraint at a time. Other areas of weaknesses are ‘non-constraints’ until when they become the weakest link. At the heart of the philosophy lies the fact that every entity has a constraint or bottleneck. This refers to that single factor that limits the entity’s ability to achieve its goal. By identifying and managing the bottlenecks, an entity can effectively increase what it achieves. Managing bottlenecks is an intense hurdle because, when one constraint is identified and removed, an entity’s output increases until it is limited by another constraint in the entity. A bottleneck refers to any constraint that limits the performance of an entire system. Alex identifies the bottlenecks (the NCX-10 machine and processes at the heat treat) and begins to implement changes to help speed up capacity. In the book, Goldratt compares a manufacturing process with leading a Boy Scout troupe through a forest. The pace at which the last scout in the line covers the path represents the throughput of the process; work in progress is represented by the distance between the first and the last scout whereas the energy that the scouts use is equivalent to the cost of the manufacturing process. Various weaknesses are identified from this setting. Each scout covers the ground at a different rate. Where the faster scouts are in front of slower ones, large gaps occur whereas where the slow ones are in front of the fast ones, the scouts bump into each other. Occasionally, scouts slow down or stop to check out something. What these weaknesses mean in relation to the manufacturing process is that; work in progress grows, costs increase, and throughput is limited since lines get longer, slow scouts that get bumped from behind use a little more energy jogging a few steps to get ahead and the pace of the last scout in the line will be slower than the ‘slowest’ scout on average respectively. After identifying the weaknesses, effective measures on how to mitigate them should be established. Goldratt formulates that the most effective way to reduce these weaknesses is; to have the slowest scout at the front while the fastest scout at the back and have them hold hands so as to maintain the same pace throughout the line. In relation to the manufacturing process, work in progress and costs are minimized since the length of the line and energy used reduces respectively. Throughput remains constrained since, the bottleneck, the slowest scout is at the front. Therefore, the only solution to this constraint is to distribute the load that the slowest scout is carrying so as to help him speed up (Goldratt, 42). This theory provides a set of procedural recommendations, in order to optimize a process, which can be used to identify improvements across a wide range of activities. Identify the constraint The weakest link in the process should be identified. This is the factor holding the process back the most. Is the process efficient or are there any bottlenecks? Tools like ‘Failure Modes and Effects Analysis can be used to map out the process and identify what’s causing issues. The constraints can also be brainstormed with team members and use tools like Root Cause Analysis to identify possible issues. Constraints can either be physical or intangible (such as ineffective communication or poor team morale). What should be taken into consideration is that a system can only have one constraint at a time so the weakest link should be clearly established. A tool like ‘Pareto Analysis’ can be used to identify the constraint if establishing it is not obvious(Parker, Alyson, Paul, and Christian,76). Manage the constraint After the constraint has been identified, effective ways on how to manage it should be established. According to Goldratt, exploiting the constraint refers to the steps undertaken to increase efficiency and cure the problem. To assist in managing the constraint, review approaches used in the ‘5S System’ and ‘Lean Manufacturing’ should be utilized. Possible solutions should be brainstormed with team members and problem solving tools such as ‘Cause and Effect Analysis’ should be used to identify the real issues behind complex problems. Evaluate performance After managing the constraint, it is important to look at how the constraint is performing with the fixes put in place. If the constraint is still holding back the performance of the system, more time should be dedicated on step two (managing the constraint). If the constraint has been dealt with effectively, this cycle should start all over again whereby another constraint is identified. The book also explains on the power of the Socratic Method as an effective way of stimulating the mind to learn. This method works under the principle that people learn through reasoning, use of critical thinking and logic. People find ‘holes’ in their own theories and then ‘patch’ them up. The use of Socratic questions stimulates the mind so that individuals become better thinkers and doers. Problem simulation is used as a way to help individuals experience the learning process being advocated. This method has been used in the book in various scenarios. Whenever Jonah was in a meeting or on telephone call dialogue, he would pose a question to Alex Rogo or one of his crew members which would cause them to talk amongst themselves to generate a solution to their problem. Alex Rogo fixes his marriage with the Socratic Method which he then uses to come up with the five steps that his crew should use to fix problems in the plant. He also uses the method with Lou to come up with three things that every division manager (Rogo’s promotion) should do. Goldratt’s Theory of Constraints is based on three basic principles which are treated as axioms, that is; they are supposed to be true but there is no evidence to this. The principles are; Convergence/ inherent simplicity This principle states that a complex system is simpler to manage. An entity that is more complex and interconnected will have a lower number of constraints. Consistency It states that there are no conflicts in nature. Two parts in an entity in conflict means that the reasoning that led to the conflict must contain at least one flawed assumption. The flawed part must be determined and the necessary changes made. Respect People have their own reasons for the behaviors they exhibit. This principle is a bridge to the gap between processes and humanity (Parker, Alyson, Paul, and Christian, 92). The theory of constraints, as depicted in this novel, is all about changing the focus of the entity to have an understanding that the overall flow of work is more important to the success of the entity than the contribution of single parts. From the production plant in this novel, it is evident that managing the production capacity of a process is crucial as compared to ensuring that each production machine is producing at optimal capacity. The pacing of this book is especially good. The reader is given time to stew with issues and come up with ideas way before sample answers are provided by Alex and his staff. It is clear that, regardless of the type of bottleneck, the importance of constraints is based on the influence they exert on the performance of any entity. References Cox, James F., and John G. Schleier.Theory of constraints handbook. New York: McGraw-Hill, 2010. Print. "Goldratt’s Theory of Constraints." HJMBD RSS. N.p., n.d. Web. 2 Dec. 2013. . Parker, Jo Alyson, Paul Harris, and Christian Steineck. Time limits and constraints. Leiden: Brill, 2010. Print. Read More