What’s possible:
This sounds counter-intuitive, but if a production system is built correctly it can absorb high levels of variability without allowing the variability to disrupt delivery.
This is what the Theory of Constraints approach to production does.
We put a system in place that typically has a shorter lead time than Lean-kanban, has less WIP than Lean-kanban, yet “absorbs” variability of all types to provide extremely high on-time performance (98% or better, and we prefer 99% or better).
You know, “Murphy” is alive and well in most organizations. Rather than building a system that means the people have to play whack-a-mole every time there’s any kind of a “blip” in circumstances, we build a system that is almost immune to Murphy-strikes.
Murphy does its worst and we still hit 99% or better on-time performance in a fast lead time with superb quality and no expediting.
Does this mean we simply tolerate variability?
No. We want to systematically reduce it or even eliminate it.
But first, we make our due-date performance immune to Murphy’s attempts to do harm. Then we can attack variability with impunity.
There is a manufacturer in Vancouver that manufactures a high-tech product. They’ve new owners now and we have no involvement.
But while we were involved, the lead time on materials was too long and subject to great variability. There were constantly new products in development, demanding capacity in unpredictable amounts. Constantly new products being introduced with inevitable variability in every aspect of manufacture. And a continuous flow of engineering changes to the existing products. Sales were highly volatile, variable in total demand and in timing and in product mix.
Now, add to this that the company’s sales grew by more than $5 MM PER MONTH for several years (and $7MM a month for several months). Think about all the implications for manpower and skills and machine capacity, on plant layout, on everything … then process the reality that for YEARS with the TOC in place, their on-time performance was 99.85% while they turned over their inventories at an astonishingly high rate.
People who spoke to their people about what they were achieving were astonished.
But no TOC expert would show any surprise at those results. Which tells you a lot about TOC.