The principles of Lean Manufacturing can streamline an operation. Six Sigma is a valuable tool for improving the quality of a product. Theory of Constraints can help establish consistency and efficiency throughout an organization.
Utilized on their own, each can help a manufacturer cut costs. Utilized together, they can lead to dramatic growth, even in a struggling economy, consultants John Veatch and Michael Pitcher said May 18 during Barnes Dennig’s quarterly manufacturer’s roundtable.
“Each one of these methodologies has the same goal, which is to create `flow,’ ” said Pitcher, an expert in TOC and the founder of Operations Excellence, Inc.
“They mesh together,” said Veatch, the founder of Lean Concepts, Inc. “It’s not about using one or the other. We want to get you thinking about how you can use them all together to optimize your process improvements.”
Lean and Six Sigma are best at the operational and tactical levels, Pitcher said – on the shop floor, for instance, or within a particular department. They can identify and eliminate waste. Theory of Constraints is effective at the strategic level, helping senior management create policies that will make better use of the workforce and raw materials.
Veatch cited the example of a bearings manufacturer that hired him to implement Lean principles within the production department. At the same time, Pitcher suggested restructuring the upper levels of the organization, and Regina Kopera – an expert in Six Sigma – helped fix a defect within one of the company’s suppliers. The company generated record profits last quarter and recently added a new plant, thanks in part to its willingness to combine three unique approaches.
“They happen to operate better under different circumstances, at different times, with different types of organizations,” Pitcher told the audience. “So John and I would propose that the clients we see that grew last year – that acquired their competition, that actually grew in sales – they were doing something of all three of these.”
Pitcher and Veatch offered four steps to utilize Lean, Six Sigma and TOC: Analyze the current state of the company; plan an action to address any problems; implement whichever method is best for each particular problem; and sustain the improvement by constantly reviewing the process, measuring results and coaching the staff.
“If you want to stay in business, you’ve got to try to get better every day,” Veatch said. “And don’t try to eat the elephant in one bite. Very, very small steps every day.”
Fifty one people attended the roundtable, representing 23 local companies, from executives to plant managers to controllers and accountants. Of those surveyed, 93 percent rated the presentation good to excellent.
“The presentation was broad enough to be suitable for the accounting folks as well as manufacturing folks,” one attendee wrote. “The real-life examples and applications were very helpful and illustrate that `it can be done.’ “