In the last OneThingLean Blog post, we talked about Step 3, or Subordinating every other decision to the Constraint. Today we will look at step 4, Elevate the Constraint.
For context, lets review our Five Steps one more time.
There is a chance that you were able to break the constraint in one of the two previous steps. It’s possible that you simply needed to Exploit your constraint (not waste any of the capacity available like during work and lunch breaks, or you needed to deal with an employee issue that left your constraint idle for minutes, hours or days), or when you Subordinated EVERYTHING to the constraint, and no longer starved it of things to work on, or overwhelmed it with so many things it did not know what to work on.
In other words, if you have already broken the constraint, skip this step and start looking for the new constraint. Every system that is made up of dependent events will always have a weakest link, a constraint, so when you break a constraint, the next weakest link will become the constraint.
But, if in the previous steps, you did not break the constraint, you have now reached that point where you need to elevate the constraint. If Subordinating everything else to the Constraint is the hardest of the 5 steps, this one is the easiest to do wrong or poorly.
As we have briefly touched on in other blog posts, the first constraint I identified in my cabinet manufacturing company after learning about Theory of Constraints was my finish room. My first attempt to “Elevate” my finish constraint was definitely done wrong and poorly. While this is the first step that typically requires you to spend money, spending money should be way down the list.
We should use our head first, and once we have exhausted all our best ideas, then and only then should we start looking at the investment(s) that might be required to Elevate our constraint.
In my case, I went straight to my wallet and bought an additional Kremlin pump, costing several thousand dollars, only to save at best 10 to 15 minutes a day. Once we discovered the error in our ways, we did resolve to use our heads first, and our wallet as a last resort moving forward.
Over a few years span, we found a bunch of ways to elevate the finish room constraint, some being as simple as offloading some portion of the finish process to other areas in the shop, others were simply choosing a material that absent Theory of Constraints thought processes, would make no sense, some examples are as follows;
- We would pull primed or sealed products out of the finish room and have machine and assembly personnel sand them.
- We started ordering HDF sheets with melamine on one side for our one-piece doors, removing all the finish steps for one side of a door or drawer front, along with eliminating the dry times required to flip a part.
- We learned that although the overall process time was actually increased, the finish time was decreased if we glue sized the machined areas of our one-piece doors and sanded them before sending them to the finish room to be primed.
- The biggest single improvement that Elevated the finish room constraint for my company was switching from Face Frame cabinets to Full Access cabinets, removing the need to finish the cabinet itself in almost all cases, and the few cabinets that did need to be finished were finished flat before assembly.
The moral of my story, or maybe we should call it my saga is we should always think about our constraint first, really attempt to understand WHY the constraint is a constraint, involve everyone that has anything to do with the constraint, and invent as many solutions to elevate the constraint as you and your team can dream up. The best thought process we ever came up with was eliminate the things that won’t elevate the constraint, and in that process, you will discover several things that will elevate the constraint.
Once you have done that, then and only then should we entertain investing in the constraint to elevate it (purchase new, faster, better equipment, hire more people, etc.).
After many years of improvements that did Elevate, but not break the finish room constraint, we were able to break it when Conestoga Wood Specialties started offering prefinished products. Being able to outsource our finishing was challenging up front, requiring us to do a major showroom remodel, removing everything we could not outsource if needed, but in the end we got a ton of additional benefits from this change.
Being able to outsource almost everything we were able to do in-house provided the ability to expand with the market on the up side of an economic cycle, and quickly and easily pull things back in-house when the market softened.
In retrospect (my hindsight is 20/20 like most everyone else’s), I now believe a total outsourcing model would have been even better. 2007 was my best year ever, and 2008 was the second worst (second only to my startup year). In the first 4 months of 2008 I spent $70,000 in labor and overhead I did not need in anticipation of a rebound after the newly elected president took office. We all know that the rebound came years rather than months later. Had I had an all outsource business model, or adopted an all outsource business model when the bottom dropped out, I could have kept $70,000 of my hard earned retained earnings.
My life experience says we should be in a soft market right now, and although I am thankful we are not, I am behaving as though we are. If I were still in the cabinet manufacturing business, I would defiantly not be looking to invest in new machinery, no matter how much business I had lined up. One of the hardest mistakes to overcome in this business is major investments in capital equipment right before a major or moderate recession, especially if they are paid for with borrowed dollars.
One of the many benefits of having turned the calendar many times (being older than most) is having experienced many downturns, and knowing that they are inevitable (as long as human nature is to reach out into the future and grab hold of our future income and bring it into the here and now, or some would simply say borrow money, downturns will be inevitable as sooner than later, we arrive in the future, and we have already spent the income we are about to earn).
BUT, although downturns are inevitable, they are somewhat easily managed if you expect and plan for them. If you build a business model that is designed to cope with them, and don’t build one that is destined to fail if it experiences a downturn.
I know of no better way to accomplish this than building a business model around strategic outsourcing (requires zero borrowed dollars), which allows you to expand with a booming market with little to no investment (which requires no re-investment, which is a really big deal), but also allows you and your business to contract with a softening market with very little pain and suffering.
In the previous article in this series, we covered step 3, Subordination. Today we covered step 4, Elevating the Constraint. In our next article in this OneThingLean series, we will delve into the fifth and final step, Rinse and Repeat.
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May the Lord bless the work of your hands, heart and mind.