TOC and Six Sigma

Comparing Theory of Constraints and Six Sigma

Tribalism and Religion?

When an organization makes a commitment to an improvement technology, or when a technology makes a big logical or emotional impact on people in an organization, it seems to lead to a stance of, “we have Brand X, we don’t want or need Brand Z, why would we even waste a minute checking it out?”. And it’s not uncommon to find advocates of one body of knowledge being very disparaging towards the other technologies – beyond what the facts support.

Maybe it’s due to the “tribalism” (sometimes bordering on religion) that helps a company buy-in so strongly to a new way of thinking and working, and achieve results.

But with Theory of Constraints and Six Sigma there should only be one “either/or,” and it’s at the philosophical level.

Six Sigma is an improvement methodology that can be aimed pretty much everywhere at all sorts of problems, although its origins are in defect reduction.

Through a Theory of Constraints lens, there are 2 concerns. The first problem is when the management philosophy towards improvement is indeed to try to improve everything, everywhere, all the time. This isn’t necessarily a Six Sigma issue per se but you can find companies training large numbers of people in Six Sigma specifically to apply it, everywhere.

The second problem is the decision-making basis when a company elects to apply Six Sigma for selected opportunities. It’s often based on criteria that are very different from the criteria that would be applied through a Theory of Constraints lens. The improvement is often just “local,” but a belief in Cost Accounting misleads managers to believe the impact is cost-reduction at a global level.

The essence of the Theory of Constraints is “Focus.”

The Theory of Constraints, in contrast, says you probably don’t have an unlimited resource base … so it makes sense to focus improvement efforts, and focus them on where the company will gain the biggest “bang for the buck.”

Theory of Constraints will pin-point with laser precision exactly where an improvement will have the biggest bang for the buck, exactly what the global benefits will be, and exactly what shape the improvement should take. If managers then deploy resources skilled in Six Sigma to put their skills to work in that exact place aiming to achieve the indicated type of improvement … the benefits are enormous for all involved.

The company gains a global-level (rather than local-level) improvement. The TOC management philosophy scores a victory. The Six Sigma individual or team scores a maximum power hit too, and scores a victory. Morale is up. Profits are up. And everyone wants to do it again. And they always can.

Theory of Constraints as a Six Sigma Tool?

I attended a conference where one presenter explained how a major corporation with a serious investment in Six Sigma had taught some Theory of Constraints Thinking Processes to it’s employees. It was taught in a way that TOC perfectionists might never have considered appropriate … basically a quick-and-dirty webinar-style presentation to big groups of employees over an Internet connection.

Of course, all of us experienced Theory of Constraints educators in the room knew this was a recipe for failure, … but boy, were we wrong.

The results? The company recorded demonstrably better results, and the trained employees voted the Theory of Constraints tool the most valuable Six Sigma tool! Seems they didn’t really care what the label on it was.