Lean Versus Theory of Constraints

      Cabinetmakers discuss various approaches to optimizing operations and workflow. May 20, 2009

Question
It's been inferred within the recent posts on Lean and Six Sigma that with the economic problems this country is facing, we should focus on these concepts now more than ever before. But with the economy offering so little margin for error, I think these concepts could easily bankrupt a small shop. Itís not that the concepts are bad. Itís simply that they are secondary tools, tools to fix something thatís wrong. But what exactly is wrong? That is the job of the Theory of Constraints.

Lean promotes process improvement, as evidenced by the comments from the thread below titled "Improving the business: Lean and Six Sigma?"

"This is supposed to help, to reduce the waste, optimize processes." "How do you know if your processes are operating at the optimum level?" "How do you know if there are no interactions between factors in your process, thus not letting your process operate at the optimum level?" "Do you collect data and how are you analyzing them? Comparative or inferential analysis?"

In contrast, TOC teaches us to identify our constraint. There can only be one constraint at a time, and spending even a second of your time trying to fix something that's not your constraint is simply making matters worse.

It specifically warns us against measuring success by individual process improvement. True success can only be measured by global improvements, measured as throughput. Take my company as an example, which I consider to be a typical small cabinet shop. My constraint is not even in production. I suspect that that is true in most small shops. How many other small shops then are making matters worse by applying Lean concepts to production, obsessing over minutes saved when the real problems lay somewhere else entirely? These are mistakes that we canít afford in this economy.

The small cabinet shop is more a service organization than it is a manufacturing organization. Iíd bet that the majority of participants on the WOODWEB forum are small shop owners, not managers of large manufacturing plants. Why then donít we focus on the other issues?

I never hear anyone talk with the same passion that they discuss Lean, about the process of finding work, designing work, engineering work, managing the processes of purchasing, scheduling, storing, delivering, and installing. Without question, these are factors that decide the profitability of a company as much or more than production. Years ago there were fantastic discussions on here about TOC. The participants of those discussions either learned what they needed to learn and moved on to new subjects, or are off making lots of money. Lean, it seems, is the new hot topic. I think thatís a mistake.

Forum Responses
(Business and Management Forum)
From contributor G:
It is tough to be Lean in a custom shop. With the tooling and jobs ever changing there is no time to study or set up a Lean throughput. When you start to get in to production is where Lean starts to work well. Where you can study the process and implement changes to see what will become of it. If it works you keep it if it doesn't maybe try something else. For a 1-3 man shop Lean is a tough thing to do.



From contributor H:
I have worked for both large and small operations, also for both ends of quality and in several aspects of types of product. I currently have a small back yard shop 1400 square feet and it is a work in progress. I have some goals and let the money dictate when I can see them come into fruition.

More back to what I think the questioner is talking about, when working for most every shop Lean was only important when things seemed backed up. Make a suggestion as to a new idea and you were told we will try that one day when we are slow, well when that day comes you have nothing to try it on and so you have a lay off. New ideas can be painful to implement, you need a clear goal and the desire to follow through.

I am working toward a small production style setup but without the extra hands. I make all of my doors without setup changes. I even have three paint systems clear, stain and pigmented. All the usual stuff as well. My thoughts are just go to the station and perform that task. I even added a 5x10 CNC. So what does Lean really mean? Some might say that is absurd to have that much tooling for a one or two man shop. I find the labor to make setups is too costly and when the market rebounds I should be set for production. Now in my book that is Lean, but then I believe many times Lean is perception and may not be reality.



From contributor F:
I'm with contributor G on this. I'm a one man, with occasional part-time help, shop. I sell myself to my clients as being able to build just about anything they need. I get kind of lost in a lot of the Lean discussions as I do feel they relate more to bigger shops knocking out a single line of product, like for instance euro boxes, all day long. In order to be Lean you have to streamline your operation to the product youíre making right? But how can you streamline when one week youíre building a custom kitchen and the next week interior doors?

My schedule right now is a set of bookcases using 1-1/4" maple construction, followed by a set of melamine closet cabinetry, followed by two different jobs consisting of about 15 or so interior doors. And the stuff that's still in planning and bidding stages is just as diversified. I guess there's not really a way to implement Lean for those of us who are trying to stay diversified?



From contributor U:
Getting Lean can be as simple as placing a tool board on the wall and drawing a line around each tool and making sure that they always go back and your 20 minutes a day of looking for tools which adds up to $3,000 a year average goes back into your pocket. The time it takes for someone to plug and unplug machines, couple an air hose all adds up, people don't realize this. Even the look through a disorganized scrap pile costs money.

A one man shop, a ten man shop, or a forty man shop can all benefit from Lean thinking and guess what - the owner can have a life and the risks they take for being in business, get rewarded. Say what you want, think what you want, Lean works and it works well.



From contributor K:
The fact is, when you are a one man shop I think we are always studying and analyzing the process and trying to streamline how we work but subconsciously while we work. For example, I know that I have been obsessing over the fact that I don't have a panel saw which I believe would help speed up sheet goods production. I become aware of this every time I boost a sheet up on the table saw to rip it then throw a sled on the saw to cross cut it. I am seeing the issues that need to be addressed as I am working. I don't need to set up cameras around the shop so I can study tapes every night. I don't dispute the theory behind Lean manufacturing but it gets implemented in a different way depending on the size of shop.


From contributor I:
The questioner is saying like some of the other posts that there are a lot of functions that can be worked on but the question is which one is most important. To go through the Six Sigma process and create a statistical representation of the business is beyond the wherewithal of most of the posters on this forum.


From contributor N:
Please, all the philosophies of process improvement are just frameworks. They are not mutually exclusive and they are not silver bullets. They are tools and I think you dismiss any of them at your peril. TOC is0 a good tool for prioritizing and determining where you should focus. Lean, among other things, is a good tool for determining what how to resolve the constraint. Lean concepts can be applied to many areas beyond production. Admin, design, sales systems, all can benefit from a Lean approach.


From the original questioner:
The short version of my post would have been, "Don't obsess about Lean until you know what to obsess about." To my knowledge, Lean does not adhere to the idea that you should prioritize your actions to improving one and only one process at a time.


From contributor O:
Whether you like Lean or not, in every shop you can find areas that need improvement. You can spend time to fix the problem or you can continue to waste time doing that aspect inefficiently. It appears that a shop owner could spend his every waking moments making adjustments, tweaking and redesigning his business. Where do you find time then to market, design, sell, and etc? Each and every shop is different, mostly because of the people involved, machinery, space, material access, and so on. There is no answer that will work for every shop that is out there. You can only listen to advice and ideas that are presented to you and discard or implement whatever works for you.

I took the time recently to just observe my crew in action, or the lack there of. I came to the conclusion that most of what we do now as cabinet makers and furniture builders is boring. We build boxes, and we make repetitive operations for days at a time and then assemble, ship and start all over again. The other thing I noticed as a business owner, I expect my employees to operate as efficient as the machines they are operating. This is not very realistic, and I decided I am wrong to push them to that extent. Although it drives me crazy to observe the slower pace they work at compared to me, I now accept it. We are short staffed to start with and to push harder will only lead to mistakes. I spend time at night to refine the CNC programs, to try to gain time where it doesn't involve humans. After all they are only just that, human.



From contributor B:
With the exceptions of processes that almost have to be done in large batches, (custom finishing, for example), TOC works on every scale to some extent. Being able to focus on ďthe constraintĒ, instead of the global organization, is the better option when resources are limited, as with most small businesses. The problem is not with Lean concepts, the problem is understanding them, which many who claim to do not. The basic idea is simple, to do or provide what is valued by the customer, and to not waste resources putting in or providing what is not valued by the customer.

Studies, bench marking, and value streaming are important, but to lose sight of the basic idea of Lean is short sighted at best. The core business of a business is where the focus should be, and the ancillary items should remain just that, even when implementing Lean.

Sometime ago, I decided before I start working with a company to implement Lean. I would request that they implement a 5S system before they delve into Lean. I'll supply information and what a 5S system is and does, and see where things go. The reasoning behind this is that if a company can't do this, they don't have a reasonable chance of being successful implementing Lean, and there is no point in wasting more time and money pursuing a goal they are not committed to realizing.



From contributor O:
In my experience the implementation of !ISO 9000 or any other such program was the sign that indicated that bankruptcy was right around the corner. It was the corporate equivalent of reshuffling the deck chairs on a sinking ship. In every case, the implementation took resources from production, added more steps to every process and these steps did not produce anything, and ultimately, the companies failed. After seeing that with my own eyes on three occasions, at three companies. I think that having these programs imposed by outsiders is a death knell. Or, maybe the companies would have died anyway, and this was just an attendant ritual. We may never know.


From contributor M:
I think the Lean type philosophies are essential to any shop's operation to a certain degree, according to their situation. But you are right on about the need to let your constraint take precedence over everything else. These days, sales, or lack thereof, are obviously the greatest constraint to a lot of us.


From contributor B:
The 5S implementation lets me, the aspiring company, and entire organization see that the organizational leadership is present and engaged in the change process, or not. Who is willing to do things to benefit the company instead of their egos, and who is committed to improving things as opposed to just talking about them. A 5S system takes relatively little capital to develop; it does take time, understanding the principles behind the actions and changes, and labor. The folks that understand and are committed to implementing disciplined change will be the ones that are best to lead a Lean initiative, and there has to be a buy in at some point of the principles of the company, preferably at the beginning.

So, in short, the cream rises to the top, allow them access to the resources to make disciplined changes to benefit the company. When the 5S system is working, that is used that as a springboard to gain acceptance of more disciplined changes throughout the organization, TOC or Lean.

By the way, many times, depending on the size and makeup of the company, Lean won't be brought into the picture until the ability of the company to understand and implement systems is determined. The right people have to be in the right places. You can go a long way with TOC, but if the organization has the size and market share to go Lean, further accomplishments can be realized with Lean.

That having been mentioned, most small businesses will never have the clout to fully implement Lean, (they don't influence the bottom line of their vendors enough to have a inventory pull system on site, for generous volumes of flat stock, for example). That is not to say elements of Lean can't be applied successfully as they often can (perhaps visual inventory systems for hardware that the company owns outright). The main difference the hardware is paid for, the flat goods would be billed as pulled from on site inventory.



From contributor I:
To contributor B: I was asking because it seems that if you pull production people from the floor that would be a very costly project? I generally think that you have to cope and organize - you cope with what you have to get done and as you can you organize. If you donít do this production goes south.


From contributor B:
They are not pulled from the floor, they are doing the leadership thing from the floor. In many cases it is easier to pull ideas and implement change from the floor than push them from above. As is often mentioned, changing is easy, deciding what to change is difficult. Three short meetings each week, usually midday, seem to work best for exchanging information. On topic, no interruptions, address issues, and be done meetings. Something that I have discovered is the best production workers are often the least likely to embrace change for any reason, they often see it as making them less valuable, regardless of if this is the case or not.

For example, if you talk about saving ďXĒ amount of time and increasing throughput as a result of changing a process, workers will balk, because they are paid by the hour. Oh, they'll talk it up in the meetings, but watch them on the floor, and it is obvious they are not buying into the project. If there is not a system in place to financially reward them based on increased productivity, why would they want to cut their own pay by becoming more efficient?

Resources planning and utilization will always be challenging for the organization, but once the benefits are seen, it generally get much easier. I'm not trying to dance around your question and I agree that you have to cope and use what you have to work with, and accept that it will take longer to accomplish to your goals. No one should drive a business into the ground by losing sight of their core business. Like a great many things, it takes as long as it takes.



From the original questioner:
Under TOC, you would do whatever it takes to fix the constraint. If it was a lack of trained workers, then yes, you would look at process improvement and better training systems. You would also look at better tools, outsourcing, product simplification, your client base, and so on.



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