TLS -Theory of Constraints Lean, Six Sigma
Double Your Bottom Line with TLS
Well, maybe you won’t double it, maybe you’ll do better!
Many organizations struggle with their continuous improvement (CI) efforts; achieving real bottom line results, whether in cost savings or increased revenues, has proven to be difficult. In spite of the widespread implementation of Lean and Six Sigma principles, poor results persist. The TLS process generates 15-20 times better performance than Lean or Six Sigma. I’ve written a new paper (18 pages!) that shows the root causes of poor CI program performance and a systematic framework to create ongoing bottom line results.
What’s Wrong with the Traditional Approach?
There are two distinct approaches to improvement. One, the traditional approach, can be best summed up in the phrase, “A cent plus a cent plus a cent plus a cent… will accumulate into a fortune.” This, the additive approach, says that if we improve a lot of different places, it will improve the entire system; or put another way, “every little bit helps”.
In contrast, the systems approach to improvement can be summed up with the phrase (paraphrasing Archimedes), “If I can find the leverage point, I can move the earth.” This approach says that not every improvement yields an improvement to the system as a whole. Said another way, “not every little bit helps; most changes don’t do a thing”.
So which approach makes the most sense? The latter approach certainly reflects everyone’s experience. The second approach is what most people would choose. But, few take that focused approach.
The goal for any continuous improvement program is to systematically create improvements. But what is improvement? What is the context for improvement? For most organizations (those that are for profit entities), an improvement is not really an improvement unless it improves the bottom line either now, or sometime in the future. Just because you’re “leaner” doesn’t mean that you’re more profitable. The improvement program must demonstrate measurable, financially justifiable results for its efforts. Clearly, the traditional approach to continuous improvement is not working.
In summary, the reasons continuous improvement programs fall short of expectations are:
- The CI Process is not in alignment with global organizational goals or strategy; we improve the wrong things
- Improvement projects are not geared towards the bottom line (phantom cost savings)
- Lack of focus on the leverage point of the business
- CI Teams emphasize tool adoption, not business results
- No clear leadership of the CI Process; continuous improvement is not linked to the leadership – it’s something additive, not integrated
- Often, there is no structure to reinforce improvements or manage improvement process
- Accountability for sustained improvements is not clear
- Teams are “self-directed”, not led
Theory of Constraints Lean Six Sigma (TLS) is a systemic approach to continuous process improvement generates 15 to 20 times more improvement than Lean or Six Sigma does alone by applying the right tools, at the right place, for the right reasons.
TLS blends the Theory of Constraints, Lean and Six Sigma improvement methods together. It tackles the problems associated with continuous improvement programs, enabling tools to work together harmoniously to achieve the bottom-line results demanded by management.
The Results of TLS
Using the combined approach of TLS has demonstrated superior results over any other method used alone, faster and greater in magnitude.
Sanmina-SCI Design of Experiment ResultsThe most publicized implementation of TLS was at Sanmina-SCI, a contract manufacturer. Management there conducted a design of experiment with 21 plants over 2 and half years. During that time, over 100 separate projects were completed.
The results were nothing short of amazing. The plants that used the TLS method achieved almost 4 times the return of either lean or six sigma projects.
Contribution to Results
Of the 21 plants in the experiment, 11 were using six sigma alone, 4 used lean alone, and 6 used TLS. Those 6 plants contributed 89% of the total results during the 2 year experiment. Six Sigma came in at a distant second with 7% contribution and Lean with 4%. One plant manger commented, “I’ve been the beneficiary of more than a tenfold return on this investment.” The people involved in the TLS implementations report feeling a renewed sense of pride for their accomplishments.
In reading this white paper, you’ll understand more about the most popular approaches, how they work and some of the major challenges. But more important, you’ll realize why, despite your best efforts, they often produce less-than-satisfactory results.
The paper then moves on to TLS and explains how it’s used and why companies experiencing 15 to 20 times greater results with TLS.