Page 458 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

416 Chapter Twelve

discusses the practical implementations of the theory of constraints.
Because process improvement deals with many possible changes, Sec. 12.4
addresses the issues of change management.

12.2 Basic Concepts in the Theory of Constraints
In the theory of constraints, every business entity is a “moneymaking
machine,” or a moneymaking process. A moneymaking process is like a river;
the money is like water, and the flow direction is from the customers’ end to
the company (business entity). Clearly, the key for this moneymaking process
to work well is to “make the water flow.” Figure 12.2 and Example 12.1
illustrate such an example for a restaurant.

Example 12.1: A Restaurant as a Moneymaking Machine
This moneymaking process is a restaurant. The customers are the “sources of
water.” The first step is marketing; if the marketing is not very good, then there
will not be a sufficient flow of customers into the process (the restaurant).
Fortunately, the marketing was good, so the customer arrival rate is 200 per hour.
The second process step is the dining hall; the dining hall only has enough
capacity to serve 100 customers per hour. The third process step is the kitchen;
the kitchen has the capacity to make 200 meals per hour. Obviously, the dining
hall capacity is a bottleneck, or a constraint. For this moneymaking process, the
maximum flow of money cannot exceed the flow rate allowed by the bottleneck,
which is 100 customers per hour. Therefore, the throughput for this process is 100
customers per hour. In order to make more money, the first thing this restaurant
needs to do is to increase the capacity of the dining hall; every unit of capacity
improvement will create one unit of improvement in the throughput. Before this
happens, any improvement in the kitchen or in marketing will not help anything.

The theory of constraints is based on several important concepts. One is its
throughput-based operation performance measures; the other is constraints
and constraints management. In this section, we discuss these in detail.

Inputs
1 2 3 Throughput ($)
(customers)
200/h 100/h 200/h
1. Marketing: Capacity 200 customers/hour
2. Dining hall: Capacity 100 customers/hour
3. Kitchen: Capacity: 200 meals/hour
Figure 12.2 A Restaurant as a Moneymaking Process