The Powerful Synergy Between Theory of Constraints and Lean Six Sigma Showcased at the Velocity World Conference

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When implemented in concert, dramatic improvements in net profits, throughput and flow times are realized as inventories, operating expenses and defects are reduced.

Experts answered questions from the audience on the integration of TOC & LSS.

In the evolution of process improvement methodologies, the Velocity World Conference held in April 2008 at the Mohegan Sun in Uncasville, Connecticut marked a milestone to move beyond process improvement to Continuous System Improvement (CSI). The event focused on the integration of Theory of Constraints (TOC) and Lean and Six Sigma (LSS). It was the continuation of past successful global conferences on TOC that have been presented since 1990 by AGI, the Avraham Y. Goldratt Institute.

Since 2005, NOVACES and Dynamics Research Corporation (DRC) have teamed with AGI to develop a breakthrough approach to continuous and sustained organizational improvement by combining the synergistic parts of TOC, Lean and Six Sigma methodologies. During three days of intensive sessions and workshops attended by a packed audience, experts shared the details of their approach to both TOC-LSS integration and CSI. To illustrate the power of implementations in government, the advanced methods were illustrated by case studies from successful projects completed by the US Department of the Navy's Naval Aviation Enterprise, including Marine Corps Aviation, to dramatically improve their global maintenance, logistics and supply system.

The TOC-LSS methodology combines the principles of TOC and its thinking processes (a breakthrough methodology to identify and manage a system's constraints) with Lean (a systematic approach to eliminate waste) and the best practices of Six Sigma (a rigorous, data-driven process to eliminate defects), resulting in a very structured, focused approach to process improvement with system-level impact.

The successful integration of TOC and LSS requires identification of the system constraint first. As a result, LSS project selection can focus on improving or protecting the performance of the System Constraint (the weakest link) to provide total system improvement. TOC is implemented first to stabilize the system by removing unnecessary interdependencies and policy constraints. Then TOC is used to identify sources of waste and variation which most affect the performance of the total system. Finally, an analysis of the stabilized system performance is used to focus Lean and Six Sigma improvement projects where they will have the highest impact.

Specially developed by the integration team to demonstrate the impact of TOC-LSS, a Velocé simulation was conducted by the conference attendees in four teams. As TOC and LSS methodologies were implemented in concert, attendees observed dramatic improvements in net profits, throughput and flow times as inventories, operating expenses and defects went down.

A special session focused on how the discords of TOC and LSS are resolved in order to provide a seamless, mistake-proof method for the integrated approach. In the process design area, two conflicts were addressed; (1) the conflict of balanced line as advocated by Lean Thinking and unbalanced line as advocated by TOC, and (2) the conflict between time-based replenishment vs. quantity based replenishment. In the process execution area, findings were shared on resolving two other conflicts; (1) the conflict between the Road Runner work ethic of TOC vs. working to TAKT in Lean, and (2) the conflict between using the Drum Buffer Rope signaling of TOC vs. the Kanban signaling of Lean.

On the final day of the conference, a panel of experts answered questions from the audience on the integration of TOC-LSS. The panel included CEO Bahadir Inozu, Ph.D. of NOVACES, Suzan Bergland, President of the North America Group of AGI, Hugh Cole of AGI and Mark Holt of DRC.

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Brian MacClaren
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