Synchronous Management Principle 6: The Marginal Value of Non-Constraint Resources | Operational Excellence Quick Hits

Speaker 1: (00:06)
In today’s session, we’re going to continue on the Principles of Synchronous Management. And this session today is on principle number six which talks about the marginal value of time at a non-bottleneck resource and what is that marginal value of time worth. And in this statement, it says that resource’s time is negligible so let’s talk about this in more detail.

Speaker 1: (00:31)
So first, I want to talk about synchronous flow. So when we have synchronous flow happening of course, to synchronize the flow, we need to have unbalanced capacity and that means that most of the resources in the value stream are non-bottlenecks. So we could only have one pacesetter in the value stream and that pacesetter is the capacity constraint resource or tax center or pacemaker, whatever you want to call it and by definition, all of the resources have extra capacity or protective capacity. So that means that those resources that have extra capacity are going to have idle time periodically. So what do we do with that aisle time, how can we leverage that? So let’s talk about the five focusing steps. So when we apply the five focusing steps, the five focusing steps are one, identify the system constraint. So if we have an internal constraint, we know it’s going to be a resource in the value stream, we identify that resource. Then we need to understand how to exploit that constraints. How can we get more of that resource’s time then subordinate everything to the above decision or everything to the constraint.

Speaker 1: (01:47)
Then elevate the constraint then if the constraint is broken, go back to step one. And there’s a note here, don’t let a inertia become the constraint so don’t become complacent. So how do we utilize those non-bottlenecks even though the time is negligible and from a cost perspective, how do we consider that when we’re developing the cost of the product? And again, when we look at cost, customers don’t care about the cost, what they care about is how much value we provide. So we don’t want to use cost accounting concepts to understand the cost of non constraints. Yes, they’re part of the cost of doing business but we don’t want to use them in our cost calculations and specifically, allocate costs to direct labor.

Speaker 1: (02:35)
So when we look at unbalanced capacity, by definition again, we have protective capacity in all these non-bottlenecks or non constraints. So how do we leverage that? We can really manage our protective capacity, there’s real opportunities to improve flow of the system. And I’ve come up with some different concepts that I’ve used in companies to help them improve flow even beyond what they thought was possible. So, first of all, offload any work from the constraint to non constraints. If we have work that’s going through the constraint and we can offload that to non constraints, that’s what we should do because that offloads the workload from the constraint and allows that to get more volume through the system by utilizing those non constraint resources.

Speaker 1: (03:21)
Also do additional value added activities on the non constraints to reduce the workload on the constraints. So if there’s tasks that can be taken off the constraint resource and those tasks move upstream or downstream from the constraint to offload that work and again, free up valuable time on the constraint, that’ll increase the flow of the system. Third, cross train the non constraint resources to provide support to the constraint operation. So if the constraint operation has resources specifically, people that we can cross train to have other people help that resource, that will free up the resource’s time to do other things to improve flow through that operation, such as covering the constraint resource during lunches and breaks.

Speaker 1: (04:09)
So if the equipment’s shutting down or the process shuts down during lunch or breaks then we can cross-train people to keep that process working while the constraint is on lunch or break. Also do tasks that don’t require the highest skills. So if we look at the constraint and we really understand the skills that are necessary to run that operation, think of it like a surgeon. We only want to constraint resource doing those highly skilled tasks and getting all other tasks off that resource. So think about when the surgeon goes in surgery, he doesn’t do any pre-op, he doesn’t do any post-op. He does just as specific skill and all those other tasks are taken off him to make him highly effective and highly utilized at the skills he’s trained at. We want to have the same mindset when we’re talking about the constraint. So that’s our session for today, talking about the value of non constraints. Next week’s session’s going to be on principle number seven, what is the marginal value of a unit of non constrained material? And we’ll dive deeper into that concept next week.