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Part 1
Read all the following:
- Supply Chain Connections, Removing Mislabeled Drugs from the Supply Chain, p. 128 of the textbook
- The chapter summary, p. 128 of the textbook
- Dittenhoefer’s Fine China, p. 137 of the textbook
Answer the following questions: The response should be between 400–600 words.
- What type of processes and procedures can supply chain managers implement to increase customer satisfaction while ensuring the quality of the product?
- How can these supply chain managers gain buy-in from the organizational leadership, employees, and stakeholders to focus on quality versus profitability?
The readings are attached as pictures
Part 2
- Read the Abstract/Summary The Ultimate Improvement Cycle (You have to go through the Evans Library and log into this versus going directly to the site)
Answer the following: The response should be between 400–600 words.
- Consider the statement the author made, “From a management perspective, it is clear that the ability to recognize and deal effectively with variability is perhaps the most critical skill.” Do you agree or disagree with this statement?
- Which of the author’s areas of focus impacted your stance? (Provide detailed reasoning to support your stance)
Minimal Requirements for Case Study Responses:
- Identify the key and underlying issues (This is not a simple listing, but more of an in-depth analysis on how these apply to the concepts and theories you have learned within this course)
- Develop the key facts to support the issues (This will require some thought with the expectation that you will only list pertinent data)
- Discuss the solution to the problem and how to implement this to become more effective (This is an analysis of the problem within the Case Study; make efforts to support your solutions with references from the textbook, readings, or other sources)
- Demonstrate that you understand the topic and data by linking the theories and concepts highlighted in the textbook with your case study response
- All sources must be cited in APA format
This is attached as the PDF file
These are also due within 9 hrs
Focus Take-Aways
Overall Applicability Innovation Style
Rating (10 is best)
To purchase abstracts, personal subscriptions or corporate solutions, visit our Web site at www.getAbstract.com, send an e-mail to info@getabstract.com, or call us in our
U.S. office (1-877-778-6627) or in our Swiss office (+41-41-367-5151). getAbstract is an Internet-based knowledge rating service and publisher of book abstracts. getAbstract
maintains complete editorial responsibility for all parts of this abstract. The copyrights of authors and publishers are acknowledged. All rights reserved. No part of this abstract
may be reproduced or transmitted in any form or by any means, electronic, photocopying or otherwise, without prior written permission of getAbstract Ltd (Switzerland).
• The “Ultimate Improvement Cycle” combines the best features of three popular methods
of improving business processes: Lean, Six Sigma and the Theory of Constraints (TOC).
• By combining the best of these three approaches, the ultimate improvement cycle
minimizes their individual weaknesses.
• Six Sigma inspires controls that will minimize – though not eliminate – output variation.
• TOC centers on identifying and handling your constraints or most constrained process.
• Lean is a “whole-systems approach” for “eliminating non-value added activities”
from your processes.
• Make all internal operations as efficient as possible to dilute the attention you must
pay to constraints.
• Maximize the way work flows through your most constrained process, even though
that could make a new constraint appear.
• Your most limiting constraint may be external to your production process.
• Adapt to the limitations your constraint imposes. Just ignoring it could be costly.
• Encourage all employees to share a vision of ongoing operational improvement.
You can build on your improvements only if everyone shares the same goals.
7 7 7 6
The Ultimate Improvement Cycle
Maximizing Profits through the Integration of Lean, Six Sigma, and the Theory
of Constraints
by Bob Sproull
CRC Press © 2009
250 pages
Leadership & Management
Strategy
Sales & Marketing
Finance
Human Resources
IT, Production & Logistics
Career Development
Small Business
Economics & Politics
Industries
Intercultural Management
Concepts & Trends
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The Ultimate Improvement Cycle © Copyright 2010 getAbstract 2 of 5
Relevance
What You Will Learn
In this Abstract, you will learn: 1) How to use the strengths of Lean, Six Sigma and
the Theory of Constraints (TOC) to create the “Ultimate Improvement Cycle” (UIC),
2) Why optimizing each part of your production process can undermine your overall
performance and 3) How to mitigate key production constraints.
Recommendation
Many business professionals have practiced Lean, Six Sigma and the Theory of Constraints.
Many others have a working knowledge of the benefits, claims and limitations of these
three widely acclaimed methods of improving business processes. Bob Sproull combines
the strengths of these three methods into a blended set of process upgrades he calls
the “Ultimate Improvement Cycle.” If you are familiar with manufacturing operations
and these various schools of thought on process improvement, the book’s language,
charts and graphs will be accessible and useful. It may rely too much on insider jargon
and data for those who are new to the field, although many of the concepts apply to
nonmanufacturing firms as well. getAbstract recommends this book to professionals
with an operational orientation because they will best appreciate Sproull’s refreshing
approach to combining the three most common process-improvement methods.
Abstract
A Blended Approach to Process Improvement
Lean Manufacturing will help you identify waste and eliminate all nonvalue-adding
activities from your business processes, but it won’t help you provide high-quality
products and services. Six Sigma will help you improve quality, but it won’t help you
remove constraints and lags from your production cycle. The Theory of Constraints
(TOC) will help you identify and remove lag from your production cycle, but it may
not adequately address quality and waste. You need a method that integrates Lean, Six
Sigma and TOC in a blended approach to ongoing process improvement. That is the
“Ultimate Improvement Cycle” (UIC).
The UIC combines the strengths of Lean, Six Sigma and the TOC, and eliminates their
individual weaknesses. It is a step-by-step process that can help your company exploit
its improvement capabilities and enhance its return on investment. The UIC helps you
maximize “throughput,” (the way products move through your manufacturing process),
minimize inventory and restrain operating costs. It has four steps:
1. Identify what needs to be eliminated or improved to reach your financial potential.
2. Develop your plan and its goals, measure performance and analyze results.
3. Make the improvements needed; modify your process as you learn more.
4. Gain control of the process you are improving. Whether managing a constraint,
reducing variation or eliminating lag, learn to control the process so you can alter
and upgrade it.
Mitigating Constraints, Waste and Variation
Identify and analyze your “value stream” – every task involved in taking unfinished
materials and turning them into products. Map your value stream so you can see its
“Just as a chain
has a weakest link,
there will always be
a resource of some
kind that limits
the system from
maximizing its
output.”
“By integrating
Lean, Six Sigma
and the TOC, life
becomes much
easier on the
shop fl oor.”
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The Ultimate Improvement Cycle © Copyright 2010 getAbstract 3 of 5
constraints (limiting factors), dependencies, lags, variations and defects more clearly. Make
production scheduling explicit and determine the best metrics to use to assess production
performance. Identify and focus on your primary constraint or most constrained process.
Every process that does not limit your organization’s throughput is a “nonconstraint.”
The Theory of Constraints helps you make the distinction. Nonconstraints require less
attention because these processes are closer to optimal than constrained processes. Pay
attention to external factors that constrict your company, not just internal ones. Consider
what new blockages could emerge if you eliminate the current one.
Lean Manufacturing helps you locate waste within your system, but look before you
leap into using Lean. This school of managerial thought urges eliminating waste as soon
as you identify it. Examining how the waste accumulated in the first place is a better
response. For example, you may be better off using a Six Sigma approach to making
your most choked up operation into a source of quality, rather than a contributor to
variation and defects.
Take time to diagram the actual work flows in and out of the problematic process. Where
do they originate? Where do they go? Waste within your constraint can reduce revenue
or add to such expenses as transporting, storing and financing inventory. Quickly
eliminating some excessive spending may be easy. Throwing out other types of waste
without creating more problems requires planning and taking a new approach to your
constraint. Variation in output is wasteful and resists easy elimination. Two dimensions
of variation apply: uneven physical measurements of a product or process, and uneven
results from the measurement system itself. If you repeatedly measure the same thing
and get the same value, your instrument is precise and the measurement is repeatable. If
several individuals repeatedly use the same instrument, measure the same thing and get
the same value, the measurement is reproducible.
Concentrating on Your Chief Constraint
Deal directly with your primary constraint. Once you identify the most limiting
obstacle in your creation cycle, find ways to make the constrained operation more
efficient. Take these steps:
• “Waste reduction” – Remove anything that causes the constraint to remain idle.
• “Implementing visual controls” – See the status of a process at a glance.
• “Changeover time reduction” – Produce goods in smaller lots with less variability.
• “Variation reduction” – Use control charts to monitor process status.
• “Defect reduction” – Maximize throughput by eliminating the root cause of errrors.
• “Standardized work” – Use statistical methods to uphold standards and cut cycle time.
• “Overall equipment effectiveness” – Maintain it, monitor it and quickly arrange repairs.
You will be more successful if you have a well-developed team committed to continual
efficiency improvement of your most constrained process. Train employees to
understand the constraint and mitigate it. Explain why other processes are subordinate
to the constraint and why they must carefully account for throughput in the constrained
process. Create a sense of urgency within the team, and help them communicate with
each other and with management to make improvements.
Low inventory may be insufficient evidence of constraint. You might be using a so-called
“pull system” and operating with limited amounts of work-in-process inventory. Look for
the way the operation affects throughput to distinguish a constraint from a nonconstraint.
“To improve
the system’s
performance, it is
imperative that you
locate the weakest
organizational
link and focus
your improvements
there.”
“When you break
one constraint,
your improvement
efforts move from
one operation
to a completely
different one.”
“Improvement
efforts that focus
on areas other than
the constrained
operations are,
for the most
part, generally
fruitless.”
“Always consider
the entire process,
including the
most likely next
constraint.”
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The Ultimate Improvement Cycle © Copyright 2010 getAbstract 4 of 5
Because your slowest process sets the overall pace of production, adapt other processes
to make the constraint less restrictive. Measuring the efficiency of your workers or your
equipment means little if you pay insufficient attention to your constraint.
Balance internal and external constraints. A well-designed manufacturing line or
service process may optimize the flow of output. But if you produce more goods than
your customers want, surplus inventory will accumulate. If you operate at 100% of
capacity, you may forfeit revenue if you lack the flexibility to expand in response to
new opportunities. Never starve your most constrained process. Since your constraint
is the limiting factor to your throughput, you have to keep this process operating at its
maximum level to get maximum throughput. You cannot perfectly match capacity to
your throughput target. Stay close to your target by organizing your line to achieve the
efficiencies of continuous work flow, also known as “one-piece flow.”
Push Systems, Pull Systems and Constraint Management
Scheduling work is an initial step in implementing the ultimate improvement cycle.
Work scheduling varies depending on whether your company has a push system or a pull
system of production. In a push system, current and forecasted market demand determines
when work gets done. Many manufacturers use push-oriented “Material Requirements
Planning” (MRP) systems. Bad forecasting is a hazard of the push environment.
To create a pull system that addresses inventory accumulation, take three important steps:
1. Create a map of how your materials and data flow through your production system.
2. Send information upstream that causes material to flow downstream, in so-called
“pull loops.”
3. Decide how to operate the pull loops. Various types of signaling systems in pull
loops, including “Kanban” and “Constant Work in Progress” (CONWIP), trigger the
replenishment of raw materials at busy production-line stations.
Using the ultimate improvement cycle, you can increase the throughput capacity of your
most constrained operation without having to buy more capacity. For example, you can
operate your constraint more frequently to augment its throughput. That is, keep the most
problematic process running while the regular operator is at lunch and on breaks, or pay
employees overtime to run it before and after the regular shift. The UIC encourages you to
create and monitor controls to sustain gains in throughput. Outsourcing part of your most
constrained process may boost effective throughput. However, outsourcing has some risks,
including impaired product consistency.
Some constraints are external to your manufacturing operation. For example, if public
demand for one of your products falters and you sell less than you produce, your company
faces a market constraint. Do everything you can to increase the capacity of your most
constrained process before spending money on it. Calming one constraint by purchasing
more capacity may intensify another constraint, reducing the value of your investment
in new capacity.
Sustaining Gains
Actively control the gains you make using the ultimate improvement cycle. If you fail
to do so, you will find that as your attention shifts to new concerns, the areas you just
improved will tend to revert to their previous, unproductive ways. You can use flags
at workstations to signal their status quickly. For example, green means everything is
running fine, red means corrective action is needed and yellow means the operator needs
“Maximizing the
effi ciency of all
operations served
only to create
mountains of
inventory.”
“Improving
the output of a
nonconstraint
operation not only
increases [the]
carrying cost of
inventory, but
also lengthens
the product
cycle time.”
“One-piece fl ow
has been proven
to be the best and
most effi cient way
possible to process
material through a
factory.”
“From a
management
perspective, it
is clear that the
ability to recognize
and deal effectively
with variability is
perhaps the most
critical skill.”
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The Ultimate Improvement Cycle © Copyright 2010 getAbstract 5 of 5
some assistance. Simple and clear, these flags (and others) can help you keep products
up to specification. Keep pacing sheets at each workstation to track downtime. Collect
information about the amount of downtime and the justification for it, so when the
station’s status changes from green to red or yellow, you will have documentation about
why it happened and what was done to fix the situation.
Constraints Beyond the Production Line
Your company may have constraints unrelated to physical throughput. Some managers
use H. William Dettmer’s seven classes of system constraints to find and mitigate
obstacles beyond the production line. They are: “market, resource/capacity, material,
supplier vendor, financial, knowledge/competence and policy.” If you identify one of
these as your company’s main constraint, dig for the root cause. Since constraints can be
external as well as internal, consider your entire system.
Think of your root cause as the deepest part of the constrained process that you can control
or at least influence. To identify the root cause of your constraint, use a “current reality
tree” to explicitly define your system’s goals and boundaries, the conditions for successful
operations and the measurements that indicate success. Document the root cause and its
negative effects, why it exists and what you can do to uproot it. Avoid loops of negative
events that end up reinforcing each other. Use your current reality tree as the basis for a
“future reality tree” with defined desirable results and processes for achieving them.
Cost Structure and Cycle Time
List all the reasons why your company has small profits now and determine which factors
could prevent you from making more money. You may be surprised at the length of the list
you create. Just selling more products is not a solution. You not only need to generate more
top-line revenue, you need to earn that revenue with goods and services that cost less to
produce than to purchase.
To change your cost structure, you have to change your cycle time from the receipt of
raw materials to the release of finished products. “Little’s Law” governs this process. It
states that cycle-time equals work in progress divided by throughput. You can reduce
cycle time three ways:
1. Add value in less time.
2. Eliminate waste that adds no value.
3. Do both.
Jumping in right away with both feet may not work. Get everyone involved first. Be
sure that all your employees have a unified approach. Everyone needs to subordinate
their other concerns to the mission of optimizing your most constrained process. This
means working to achieve continuous improvement by focusing on the right metrics,
eliminating waste and variation, and adopting a culture of problem solving. If you can
do all that, you will reap the benefits of the ultimate improvement cycle.
About the Author
Bob Sproull, an experienced manufacturing executive, consults with manufacturers
on improving their operations and advises private equity firms about investments in
manufacturing turnarounds.
“The worst
possible thing that
can happen is that
as cycle times are
reduced, or defects
and downtime are
eliminated, people
get moved out of
their jobs or, worse
yet, laid off.”
“Very little time in
a typical process
actually is spent
on value-added
work.”
“First law of
forecasting:
Forecasts are
always wrong!
Second law of
forecasting:
Detailed forecasts
are worse than
aggregate
forecasts!
Third law of
forecasting:
The further into
the future, the
less reliable the
forecast will be!”
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