If you know what you're looking for, TOC can be found almost everywhere in daily life. A few days ago, I was in line at Wal-Mart. Wal-Mart generally has a very efficient system of getting customers through their check out. At the end of the belt, after items are scanned, there is a triangular carousel that holds a bag on each side. The idea is that, as the cashier scans items, she places them into the bags, turns the carousel, and the customer can then load the cart. Very simple - a no brainer, right?
This works fine if the contents of the cart do not exceed the constraint - in this case a carousel with all six bags full. As it happened, that day, I had quite a full cart - beyond the capacity of the constraint. The cashier kept scanning items and then trying to find how to place the excess items on top of and in other places beyond the capacity of the carousel's 6 bags. She was so busy doing this that she failed to realize that she was actually contributing to the problem. By having her back to me, she was only focusing on arranging the excess items, and leaving the loading belt idle. Had she allowed the belt to move forward, I would have been able to empty my cart, move to the end, re-load the cart, and relieve her constraint at the other end.
What she was doing - focusing exclusively on stacking items beyond the capacity of the carousel - is what we call a local optimum.
How would traditional cost accounting deal with this? It would consider my activity and her activity as two separate unrelated events. Both she and I would have been penalized for poor efficiency. We would have been encouraged to work harder or smarter and move more efficiently. The physical constraint would have been ignored. Yes, it would have captured that something was wrong, but it would not offer any clue as to how to repair it. In fact, the correct answer would have been for her to actually work less by turning around and relieving my constraint at the belt which would, in turn, have relieved her own constraint.
Yes, this may seem like a petty example. But if this is at a simple two-station operation where the two people can see each other, is it any wonder that in a multi-step factory is exponentially more prone to the propagation of these types of problems? There the work centers may be in two different buildings. We simply accept that "inventory happens" and that inefficiencies cannot be avoided. We continue to pursue local efficiencies and actually making things worse.
The answers are right there on your production floor. They are right in front of you. The problem is not your eyes. The problem may be that the traditional thinking is blocking your ability to see the problem in a different light - and therefore the solutions.
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Thanks and regards,
Jose I. Mora, Principal Consultant
Atzari Consulting, L.L.C.
www.atzari.com
Office: (973) 835-6313 Fax: (866) 223-5813
Mobile: (786) 351-2484
jmora@atzari.com, joseimora@gmail.com
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