Our last post, ‘Resource Optimization? Don’t Make the 100% Mistake‘ received thousands of views, hundreds of likes and we are grateful for the many insightful comments received. Here, Dr. Giovanni Siepe takes a further look at resource optimization and why it is essential to always have some excess capacity.
Infinite resources only exist in Heaven
In our last post on resource optimization, we used the analogy of a cup – if it is full there is no room for anything else. One comment to that post suggested that, if the “cup is full” we could get a “larger cup”. But is that advisable? Let’s ask ourselves the following question: do we have “infinite resources” available? Can we really keep investing in increasing our capacity and replace our small cup with a larger one?
Furthermore, if we talk about effectiveness (I don’t want to talk about “efficiency” because it is HIGHLY misleading), is it “effective” to increase capacity?
The name of the game here is: let’s make the best out of the available resources, and then we can think about increasing them.
This is the reason why the concept of constraint is paramount when we talk about optimization of resources.
The Positive Power of a Constraint
The simple idea of managing through a “constraint” is revolutionary.
The word, unfortunately, sounds negative. But when it’s used strategically, a “constraint” is not negative at all. On the contrary, we acknowledge the existence of a constraint in any system because we actually need a constraint. This was the profound insight of Eli Goldratt who developed the Theory of Constraints. Why do we need a constraint? Because we leverage it and take the maximum from it. This is a fundamental part of the ‘Decalogue’* approach.
What about slack?
I personally don’t like the word “slack” because it suggests something optional. It even has a connotation of laziness.
Slack is not extra capacity. This is a concept people often struggle with. It is capacity that is absolutely necessary for the System to function correctly.
When the network of interdependencies (the System) is working properly by using the correct mechanism of synchronization and subordination to the constraint, the “extra capacity” is needed as “protection capacity”. In other words, in order to get the maximum from the System, we must allow some resources to stay idle. This is the basic Drum-Buffer-Rope mechanism from the Theory of Constraints.
But it’s not enough to just identify the constraint and subordinate to it. What about variation? Have we forgotten the existence of Entropy? Things never run perfectly.
Of course we did not forget such an important matter.
We have to protect the constraint with a “buffer” to prevent variation from impacting the System negatively.
But let’s be practical for a moment: how much can we really afford to have “excess capacity? If I were at General Motors, for example, would I have enough “courage” to keep some machines idle? And for many managers, wouldn’t the next logical step be to sever some employees?
Ok, so let’s take a step back to understand this better.
The System works at its best when exploiting the constraint and subordinating the rest of the organization to the constraint (the synchronization mechanism); this intrinsically calls for “excess capacity”. This does not mean people “waiting idly” around for the machines or machines “waiting idly” around for people; this is about what is best for the System as a WHOLE, including people and whatever is around them.
Idle doesn’t mean useless
In a system that is well organized around a constraint, idle time becomes an opportunity. If we know there are some idle machines because of the subordination mechanism, how about scheduling some preventive maintenance on those machines?
Furthermore, if people are not engaged in any routine activity, how about organizing some basic training for them on a systemic approach? Or using that time to resolve conflicts that may have arisen?
When we talk about continuous improvement, it should be valid for people as well, not just processes and machines.
Until now we have basically talked about production and “physical constraint”, but the ideas behind the approach are applicable to Project Management, to Sales and Marketing, to New Product Development, R&D and so on.
There is much more to say, but we will touch on other specific topics in future posts.
*The Decalogue methodology is a systemic approach to management. It creates a powerful synergy between the Theory of Variation and the Theory of Constraints with elements of Network Theory.
For more highlights of a systemic approach, see our new book The Human Constraint’. This is a business novel + website that reflects the urgent need for a shift in thinking and is based on almost 20 years of on-the-field experience with a systemic approach to business. Its accompanying website offers highlights of Deming’s Theory and the Theory of Constraints applied to specific problems. See www.thehumanconstraint.ca for free chapters and purchase.