Theory of Constraints: Part Four

3 min read

Welcome to the fourth entry in the Theory of Constraints series. Much of the first three entries covered the basics behind the theory, including a broad overview of the process and the Five Focusing Steps in part one, the Thinking process in part two, and the accounting method known as Throughput Accounting in part three. This post will now compare and contrast the Theory of Constraints and Lean thinking.

theory of constraints and lean Lean and the Theory of Constraints

Both Lean thinking and the Theory of Constraints are organizational change methods aimed at improving the organization and increasing profits. Their approaches however, have a slightly different angle.

Lean thinking has been popularized and mastered by the Toyota Production System. After WWII, Taiichi Ohno of Toyota was able to use his studies of other manufacturing methods to design a new manufacturing method that would soon revolutionize industries of all shapes and sizes.

Lean manufacturing as it is know referred to, is a method aimed at continuous improvement, efficiency, eliminating waste and the endless desire to reach perfection. Through various processes and methodologies, Lean implementers are able to use less effort, space, inventory, and product development time to streamline production to best serve their customers. They typically have fewer defects and more variety in their product lines.

Table Comparison

Lean Thinking Theory of Constraints
Goal Add value from the customers perspective Increase throughput to increase profits.
Measures
  • Cost
  • Lead Time
  • Value-Added Percentage
  • Throughput
  • Inventory
  • Operating Expenses
What to Change? Value should be added that recognizes the entire system and eliminate all waste Constraints: i.e. the weakest link in the system
How to implement the desired change?
  1. Identify value
  2. Identify value stream
  3. Flow
  4. Pull
  5. Perfection
  1. Identify the constraint
  2. Exploit the constraint
  3. Subordinate processes
  4. Elevate constraint
  5. Repeat
Time it takes Both will see an immediate result, but require a sustained effort over time to see true results
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As noted earlier and in the table the goal for both is to increase profit, however their focus in slightly different. Lean thinking measures put added value on the customer’s perspective. Often in a Lean facility you hear: “Would the customer pay for this?”

This question is asked repeatedly as one walks the value stream, from finished goods to raw materials. A Lean thinker is constantly asking themselves if something is adding value that a customer would pay for, or is it just waste?

On the other hand, Theory of Constraints implementers are mainly focused on eliminating constraints to add profit. As noted in previous posts in this series, a constraint is anything that prevents an organization from making progress towards a goal. In a sense, it is your weakest link and it needs to be removed in order for you to move forward.

Can They Coexist?

In some ways, yes the Theory of Constraints and Lean can coexist together, if done carefully and strategically. Both approaches believe there is something to improve, somewhere. Whether it’s continuously improving a process or constantly believing there is a constraint to seek out, both approaches keep you focused on improvement.

Value

Both Lean and the Theory of Constraints agree that the customer’s perception of value is extremely important. In Lean, the theory is that “value can only be defined by the ultimate customer.” Theory of Constraints similarly, suggests that throughput is not achieved until the customer’s money is received for the product and thus, the customer’s perception of value is then at the top of list when considering increasing a product’s throughput.

Pull

While both provide different techniques in controlling the flow of product based on pull from the market, they both fully embrace the pull principle. In Lean manufacturing, the pull concept is approached sequentially, meaning nothing is produced upstream, until the customer downstream requests it. While the Theory of Constraints method of Drum-Buffer-Rope is completely dependent on the pull concept which is market dependent as well.

Many of Lean’s concepts can fit seamlessly into the Theory of Constraints. Gemba, Kaizen, 5S and Kanban are just a few of the many Lean tools that have aided organizations that use the Theory of Constraints in their facility. When done correctly the two systems can be extremely beneficial to one another, however it takes a strong culture that is knowledgeable and willing to adjust when needed.

Image of Kaizen GuideDoes your organization use both concepts together? Tell us abut it below in the comment section.

 

 

 

 

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Kyle Holland

As a Content Developer for Creative Safety Supply, I pride myself on creating educational, well researched content to a niche audience of safety enthusiasts and safety managers around the globe. The philosophies and concepts of Kaizen, 5S, and Lean play a significant role in my own personal ideologies and help fuel the creativity behind my writing. Via the many communication channels offered by CSS, my goal is to help educate, motivate, and improve the safety of people, both at home and at work.