It is clear that for-profit enterprises manufacturing products strive to achieve their targeted revenues from their production reliably utilizing their available capacities and resources. Unreliable and below target production levels lead to low revenues and high inventories, causing high operating expenses. As an outcome, profit and ROI are typically compromised. This situation also creates an enormous amount of stress and frustration on the organization's critical resources potentially jeopardizing the future revenue opportunities.
Continuous Process Improvement (CPI) approaches such as Lean, Six Sigma and TOC have been applied to help organizations to improve their efficiencies and profitability. However, there had not been research to quantify the effects and contributions of each of these approaches which led to a recent scientific research conducted from 2003 to 2005. This research also tested effects of a integrated approach applying the three methodology in a logical sequence and compared its effect with the implementations that were using each one of the CPI methods alone.
The integrated continuous process improvement tested in the research is called iTLS. It applies the Theory Of Constraint, introduced by Eli Goldratt, Lean which is best known as Toyota Production Systems (TPS), and Six Sigma developed by Motorola, in a sequence in order to optimize each approach's core strength.
Taking over two and a half years and involving 21 manufacturing plants with 211 CPI team leaders implementing their preferred CPI approaches,105 projects were completed.
The research also quantified the financial contributions realized through implementation of each one of these CPI approaches. The statistical analysis of the results indicated that Lean and Six Sigma contributed significant financial results for their organizations. Both Lean and Six Sigma contributed similar results (P-Value of 0.622, did not indicate significant difference between the two approaches, considering financial benefits factor.) However, the integrated approach, applying TOC, Lean and Six Sigma in logical sequence, resulted in financial benefits that were over 4 times (4X) higher (P-Value of 0.0000, indication of high degree of significance), if either one of these methodologies were applied alone. (For research
click here.)
One company that used the integrated approach is Votorantim, which is the 4th largest private Brazilian group and operates in several countries in various market segments, such as mining, metal industries, cement, paper, steel, and fruit juices. Five facilities have adopted and benefitted from the Integrated TOC, Lean, Six Sigma, iTLS approach for continuous improvement developed by Dr. Reza Pirasteh, introduced publicly in 2006 (Pirasteh & Farah 2006), in a deployable form. Two of the plants in this case study were mining operations and three were metallurgical plants.
In this case study the iTLS approach successfully synchronized production with the available capacity levels while providing process stability. This approach was smoothly implemented through involvement and participation of the organizations' people and their powerful commitment for success.
The Integrated TOC, Lean, Six Sigma ModeliTLS integrates, synchronizes and harmonizes the three powerful ingredients (Lean, Six Sigma and TOC):
- Focus on the few yet critical elements that limit the global performance of the organization by applying Theory of Constraint tools
- Eliminates waste in the form of "hidden factories" with application of Lean tools
- Reduces undesirable variability to ensure process stability with Six Sigma tools
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