In the first part of this series, we explained why flow should be the main goal of every organization, and introduced the Four Concepts of Flow developed by Dr. Goldratt. Let us now look at how Dr. Barnard questioned and expanded on them.1
Where is the constraint?
Proponents of the Theory of Constraints will no doubt wonder: what happened to the constraint in the Four Concepts of Flow? The new guidelines almost seem to contradict the Five Focusing Steps, (also discussed on this blog before). Their first step is “Identify the constraint”, whereas here the constraint isn’t even mentioned. So where am I supposed to begin my improvement initiative? Do I introduce mechanisms to avoid overproduction and improve flow? Or do I start by identifying the constraint?
In fact, Dr. Barnard warns us, focusing too much on the constraint may well lead to bad decisions. He does not question that every system has a constraint. However, the constraint does not necessarily have to be the biggest factor impeding flow. Often enough, management mistakes such as desynchronized priorities, big batches or misallocation of resources cause far more damage (reduce flow) than the constraint. This is why Dr. Barnard recommends looking at operations in an unbiased way, without preconceptions about what the solution will be. This approach also reflects what Eli Goldratt used to say: “Never say, ‘I know’”.
From Concept to Application
This open-minded approach is very important for consultants who first assess a new business. A concept – even one that has proven its worth again and again – is not the same as a practical application. Each system is slightly different – even if very similar principles apply under most circumstances. No surprise, then, that “this won’t work here” is one of the most common objections consultants face.
It doesn’t help that past a certain level of complexity, human intuition is not very good at making exact predictions about the effects of a change or measure. The optimal steps to improving Flow are often somewhat counterintuitive. The fact that reducing Work in Process increases Throughput does not immediately make sense. This means that convincing a business of these necessary changes is all the more difficult – there is risk involved! And as we know, it is very important for the motivation of stakeholders that the first few steps of any change lead to noticeable improvements.
So the question is: how can we efficiently implement these generic, proven concepts while at the same time taking into account the specific circumstances of the organization? Again, Dr. Barnard stresses that one of the most important aspects even for an experienced consultant is to approach each situation with an open mind. The common assumption that overproduction is the main decision mistake leading to reduced flow may be correct in the majority of circumstances. But it doesn’t have to be the case, making it important to carefully analyze the situation in each new organization.
Expanding the Four Concepts of FlowThis prompts Dr. Barnard to redefine the Four Concepts of Flow less restrictively than Dr. Goldratt, to ensure they will encompass every possible situation they may encounter:
- Adding the other practical mechanisms needed to prevent/reduce other decision mistakes – e.g. how resources are allocated, buffers are used, prioritization is done, work is done (batching, multitasking etc.), what is measured and when and where to improve/invest.
- Adding a classification of these practical mechanisms – using classification of Planning, Execution, Measurement and Improvement (PEMI). Note: This classification mirrors Deming’s PDCA cycle).2
From this we can draw the following graphical representation showing typical decision mistakes and offering the mechanisms necessary to remedy them:
Dr. Barnard underlines that these mistakes and their prevention mechanisms are universally valid and present in every organizational system. They result in practical applications such as LEAN, Drum-Buffer-Rope or Agile, which are tailored to specific environments.
The graph makes it clear that improving flow is our top goal: this is the point we need to reach in order to meet demand effectively and efficiently, and maintain a sustainable, flourishing business. The practical mechanisms allow us to reach this goal.
As we have mentioned, the necessary changes are not always intuitive and unpredictable dependencies may lead to undesired side effects. This is where simulations can be helpful by allowing you to observe the effects of a proposed change in a specific environment, before actually implementing them in practice. There are a number of software solutions available for this, including one developed in collaboration with Dr. Barnard himself.
1: Dr. Alan Barnard und Dr. Andrey Malykhanov: Improving effectiveness and efficiency of FLOW within any environment… What (decision rules) can make the difference?, TOCICO 2015
2: Dr. Alan Barnard und Dr. Andrey Malykhanov: Improving effectiveness and efficiency of FLOW within any environment… What (decision rules) can make the difference?, TOCICO 2015, slide 18