Page 212 - How To Implement Lean Manufacturing

190 Cha pte r T w e l v e

Some Constraints That Are Often Not Called Constraints
For the moment, think about a product you make, produced by some process. What if
the process is performing well? For example, the quality yield is 100 percent, as is OEE
and on-time delivery. The process is producing to takt, making good margins, and meet-
ing customer demand in every respect. Do we still have a constraint? Well, if your com-
pany is in business to make money and you do not have 100 percent of the market for
that product, then the answer is a resounding yes. In this case, the constraint is likely
your sales department. Why sales? That sounds odd! The logic goes like this:
1. The business objective is to make money.
2. There is more market share to be had and more money to be made.
3. What is our limit?
4. Answer: The constraint is probably sales.
The constraint is not always a step in your process. It can be any aspect that limits
your ability to meet your objective. The constraint can be the process itself; it may be
a raw materials supplier; it may be a resource; or it may be another aspect of your
business.

Policy Constraints
The most disturbing constraints are often policy
Point of Clarity All busi-
constraints. This can occur when the company
nesses have constraints, and
makes policies that turn out to limit the facility. Sel-
these constraints limit the busi-
dom are these policies designed to be limits. Rather,
ness’s ability to make money! they are often created with the best of intentions but
without a good understanding of the intended or
unintended consequences of the policy. Two types of policies drive me absolutely
crazy.

• The first type is “We don’t know what we are doing so we will create a policy to
cover it.” For example, one client explained to me that their policy on inventory
was to have 30 days on hand. It was a corporate-wide policy. And no one could
give even a rough explanation of why this 30 day policy existed.
• The second type is the “I don’t trust you, so we will create a policy to limit your
authority.” An example is described next.

On one occasion, I was called in to make an evaluation of a production line. The
plant manager needed to increase production by 38 percent and knew that the capacity
constraint was their electrical testers. In an evaluation that took less than one hour (he
wanted to discuss what I found over lunch), I was able to spot potential capacity
increases of over 22 percent with no capital investments. The recommendations con-
sisted of staffing the test station during breaks and lunch and moving one test station
that had significant scrap. This test station was after the bottleneck, and by placing it in
front of the bottleneck it would improve throughput instantly. I was feeling pretty good
about myself and just figured he would jump at these ideas.
We met for lunch and although the plant manager was intrigued, he flatly rejected
both ideas. These ideas would add about $200 per day in labor costs to the 24-hour