Read the uploaded case study and give short answer for the following questions

1-What was the primary constraint in the system described in this case study? How was it identified?

2-Describe how the Five Focusing Steps were applied in this case. Which step was the most challenging and why?

3-How did the team ensure the constraint was being exploited before considering elevation?

A Case Study on theTheory of Constraints

As discussed in Chapter 1, the Theory of Constraints is all about being able to identify the limiting factor in a system or process that controls the rate of units through it. You then focus your improvement efforts on this limiting factor in order to leverage the potential gains to be made. I've been using this methodology since the 1990s and it has provided significant improvements each and every time. What you're about to read is a true story related to my first experience with the Theory of Constraints and all that it has to offer. One of my former bosses had called me and wanted me to come to work for him. When I asked him what kind of position he wanted me to take, he explained that he had become the CEO of a new company and that he had a manufacturing facility in Kentucky that he wanted me to run. I was very excited to have been chosen to run a manufacturing facility because I had never been in charge of one before. I agreed to meet him there several weeks later.

When I arrived at this manufacturing facility, we met to discuss this business behind closed doors. One of my first questions was, "Why hewanted me?" and he replied that he really liked my people skills and my quality ethic. I then asked him if he had a specific way that he wanted me to run this business and to my surprise, he just smiled and said that he actually wanted me to close the doors and shut it down. I totally thought he was joking, but I soon found out he wasn't. I pushed back hard and told him that he owed me a chance to try and turn this facility around, rather than shut it down. He explained that they had put their "best plant manager" in charge and he was unable to make a difference. I pushed back even harder and he finally agreed to at least let me try with one stipulation. I had 3 months to make it profitable, but after 3 months, if it wasn't profitable, I had no choice but to shut it down. Reluctantly, I agreed. So, there I was. I had just been hired to facilitate either a best-case turnaround or a worst-case closure of this manufacturing facility. This particular manufacturing plant produced fiberglass hard tops on one side of the plant and convertible tops on the other side with approximately 250employees working at the location. When I arrived to start at this site, I found it virtually in shambles. It had just missed being unionized by fivevotes, so the workforce was pretty much split down the middle in terms of "camps," with one camp being pro-management and wanting to turn this plant around, while the other camp, those who had voted to unionize the facility, having a very negative view of leadership. From a financialperspective, the facility was on credit hold with some of its key suppliers and overtime was very high. On further investigation, I discovered that customers were threatening to pull their business because of poor quality and terrible on-time delivery. Absenteeism was high, and morale was in the tank. Sound like a fun place to work? Add to this my background had been almost exclusively Quality and Engineering with virtually zero operations experience. I was definitelygoing down a new path. This company was using a form of Enterprise Resource Planning (ERP) to schedule their production, but they weren't very successful using it. ERP systems are supposed to help a business by providing a common set of tools that can be used across an enterprise to both plan for and control the execution of actions at each resource. Scheduling in an ERP system begins with an order due date and then attempts to start as late as possible while still meeting the date or it starts with today and tries to complete the work as soon as possible, which often times is well before the due date. Typically, scheduling through a manufacturing plant uses production rates and times or units of production capacities to schedule each resource. I mention this point early on because we modified this company's ERP system to merge with another scheduling mechanism known as Drum-Buffer-Rope from the Theory of Constraints. We will cover this merger later in the chapter. When I arrived at this manufacturing plant, there were two operations managers already in place. One had been there for 20 years and the other had just been hired. Because I had no real operations management experience, I thought I could rely on at least one of my two operations managers to help me learn the ropes. But I found out quite early on, that wasn't such a good strategy. Neither of them could offer any real vision for what we had to do to effectuate a turnaround. I was starting to panic! On my first day on the job, I spent all three shifts within the four walls of the factory out on the production floor introducing myself to the employees and trying to get some sense of the true state of the business. What I found that the first day caused a great deal of anxiety for me personally because they were all looking to me to help save their jobs. The next morning in desperation, I visited the local library to find something, anything, on operations management to read (i.e. back then there was no internet to search like today). That visit turned out to be a good move for me because in that library I discovered a small, partially hidden, paper-back book that would change the course of history at this plant in Kentucky. This book would become my blueprint for a complete transformation of not only this manufacturing facility but for me personally and professionally. The name of this book was The Goal: A Process of Ongoing Improvement by Eliyahu Goldratt and Jeff Cox [1]. For those of you not familiar with the Theory of Constraints (TOC), the basis behind TOC is that manufacturing output is dictated by the slowest operation. It's like following the cadence of a drum beat. I'll discuss this concept in more detail later in this chapter. Meanwhile, back to my case study. I spent the remainder of my second day in my office and most of the night I spent the remainder of my second day in my office and most of the night reading this manufacturing masterpiece. There were concepts within this book that I had never heard of before. I was so excited to get started applying these concepts, but I knew my team had to understand the teachings within this book before we could truly begin our transformation. I found a local book store, purchased copies of The Goal for all of my direct reports and supervisors to read. I overnighted them in and mandated to all of my direct reports to have read this book within 2 days. We had round-table discussions about the key teachings within this book on a daily basis and within a week we were ready to begin. One of the first things we did was to establish a morning "Herbie Hunt" to search for and find the system constraint. (For those of you who have never read The Goal, Herbie was an overweight boy scout with an overloaded backpack who controlled the pace of a boy scout's overnight hike.) He was constraining the rate of progress of the boy scout troop. The troop finally figured out that if they could reduce the weight of Herbie's backpack, the troop could increase the amount of distance covered on their hike. This was how the authors of The Goal, Eliyahu Goldratt and Jeff Cox, chose to introduce the concept of the constraint. Because we were losing so much money on the hardtop side of the business, we decided we would start our improvement effort on this side of the business. We would walk the process until we came upon a backlog of partially finished hardtops. Once we found it, we then stopped and asked the operator why he or she felt that the process was blocked at their station. We also asked this same person what they thought should be done to alleviate the backlog. This technique turned out to have multiple effects. First, we were able to identify the constraint (aka bottleneck) and thendecide how to exploit it or make the most of it. In the early going, it was clear that we had to subordinate the rest of the process to the pace of the constraint. This was a difficult decision because our corporate office tracked our overall efficiency and by asking the non-constraints to slow down, the overall efficiency took a nosedive. However, we did track the efficiency of our bottleneck operation because we knew that the constraint was the only process step that it made sense using.Perhaps the most important effect of our daily Herbie Hunt was the true involvement of the hourly workforce in our improvement effort. They wereamazed that someone was actually listening to them and that we not only solicited their ideas, but we implemented them exactly as stated, as longas no safety, company, or customer rules and regulations were violated! I remember one operator telling me that nobody had ever listened to theworkforce before. And so, our total company improvement effort had begun.One of the first constraints or bottlenecks our team discovered was when it was time to mount the hardtop on the chassis of a very popular German sports car. Along the hardtop mounting surface, there were 48 control points that had to be within the specification limits provided by this German manufacturer. To our amazement, 36 of these points failed to conform to the specification limits. Many of the points were above the spec limits and could be repaired, but many times they were below the limits, so the hard top had to be scrapped. In fact, approximately 20 percent of all of the tops fell into this category, which caused deep financial pain for our plant. I also discovered that the hardtop was 4 months late coming to market.We formed a team of hourly employees and our one, lone engineer to solve this problem which turned out to be an alignment issue within our bonding process. The team determined the root cause of the mismatch in our on-time delivery metric, the customer's perception of our quality,but more importantly, our bottom line. We celebrated this success with a pizza party which brought our two distinct "camps" much closer together.In addition, the morale of the workforce as a whole jettisoned upward. One of the problems I haven't mentioned was the quality of materialsbeing received from our suppliers. I remember on at least two occasions scrapping an entire batch of resin used in our hardtop molding process.We also had supplier delivery issues from the standpoint of on-time delivery. Part of this was due to our inability to pay our bills on time andpart of it was due to the poor processes that some of our suppliers had. As some of you might have guessed, the previous leadership, in an attempt toimprove profitability, chose the lowest cost suppliers, which in some cases had the poorest quality and on-time delivery rates. One of our hourly employees suggested that we have a Supplier Appreciation Day and invite all of our suppliers into our plant. He reasonedthat if they could see how their products were used and talk about the problems we were seeing with their products, there would be an immediateimprovement in both quality and on-time delivery. Another employee suggested that we pay all of our bills within 30 days as an incentive for suppliers to improve their delivery performance. Guess what ... both ideas worked!! Within a matter of weeks, our supplier performance improved dramatically and because we were paying within 30 days, we were able to negotiate significant early pay cost reductions which also helped our bottom line.I mentioned earlier that when we subordinated the rest of our process to the constraint, our efficiencies took a hit. The reason being that we ran allother process steps at the same speed as our constraint. I remember our corporate office sending a team down to our plant to determine the cause of our deterioration in efficiencies. They came unannounced, just sort of showed up at our front door. I invited them into our conference room and they made a presentation demonstrating on a run chart the sudden decrease in efficiencies. I let them finish their presentation and asked them if they had looked at any other performance metrics? Of course, they hadn't! I had anticipated a visit from corporate at some point, so I had prepared a brief presentation of my own for when they arrived. The very first slide said it all. It was a plot of weekly on-time delivery and I think it shocked them. When I had arrived, the plant's on-time delivery was just under 60 percent, while the efficiencies were around 80 percent, which was still too low for the corporate "experts." When they saw our data, they didn't believe it because even though the efficiency had dropped to around 65 percent, the on-time delivery now stood at 88 percent (which was still not good enough for me). Actually, the most current week which had not yet been plotted now stood at 94 percent!! I asked the "experts" if they would like to see how it was possible to improve on-time delivery while reducing our process efficiencies. I went through my traditional drawings of the piping system and simple fourstep process and explained the concept of a physical constraint. But for those of you who haven't read about the concept of the constraint, here are the two drawings I used. In this first drawing (Figure 7.1), I explained that this was a simple gravity fed piping system used to transport water. I then asked the corporate "experts" what they would do if additional water was needed to flow through the piping system. They answered the question correctly in that it would be necessary to increase the diameter of Section E. I also asked them if increasing the diameter of any other section would increase the flow of water through this system and again, they answered correctly by saying no, only Section E. This exercise was intended to implant the concept of the system constraint firmly in their minds.I then inserted a second drawing (Figure 7.2) which depicted the condition where Section E's diameter had been enlarged and the constraint had moved to Section B of the piping system as demonstrated in the drawing. These two drawings had a positive impact on the demeanor of the meeting. I then laid out the five basic steps of the Theory of Constraints process ofon-going improvement as follows:1. Identify the system constraint (i.e. Section E in the first drawing). 2. Exploit the system constraint (i.e. enlarge the diameter of Section E). 3. Subordinate everything else to the constraint (i.e. run at the same speed as the constraint). 4. If necessary, elevate the system constraint (i.e. this was done when we opened Section E's diameter). 5. When the constraint is broken, return to Step 1 (i.e. when we enlarged Section E's diameter, the constraint moved to Section B in the second drawing).Identifying the system Identifying the system constraint, in its simplest form, means to find thebottleneck within your process or system or that point that is limiting production. Exploiting the constraint simply means making improvements in order to get the most out of your constraint. In our plant, exploiting the constraint meant that we needed to reduce the processing time of our constraint, which we did. Subordinating our constraint meant that our non-constraint process steps should never out-pace our constraint. Elevating the constraint meant that we might have to spend money on more resources or equipment if we still weren't producing at a fast-enough rate. Fortunately, in the short term, we did not have to perform this step as well as the final step simply because our constraint was supplying enoughthroughput to meet the needs of our customers. I then inserted another drawing (Figure 7.3) of a simple four-step process for manufacturing something and asked them where they believed the constraint was in this process. Without exception, everyone agreed that Step 4, because it had the longest cycle time at 5 minutes, was the system constraint.