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The primary objective of
operations is flow

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We tend to see many separate objectives: output target, due date performance, operating expenses, quality and safety. Many times these objectives seem to have conflicting requirements.

However, when we focus on improving the system’s flow, we are likely to achieve all of the above.

All the perceived conflicts and local
optimizations lose their importance.

Improving flow is counterintuitive

Doing more and starting earlier are the intuitive ways we try to protect flow, but these actions typically achieve the opposite.

More turns into less

Overproduction creates friction that slows down flow.

Earlier turns into later

We add more time to overcome disturbances. Yet the longer the road the more disturbances are likely to happen along the way, and the slower the time it takes to course correct.

Vicious Cycle of Slow Flow

Better forecast is not the answer.
Forecast is good, knowing is better!

The faster the flow the more we can react to actual demand.
To break the vicious cycle
we need to focus on better flow,
not better forecast.

Improving Flow

1
Remove obstacles
Reduce friction through the process. For example: waiting for missing elements, rework, batching.
2
Reduce WIP
The major source of friction through the process fights over priorities and attention. Too much Work In Process (WIP) increases the internal friction. Reducing WIP is an essential step toward improving the flow.
3
Set a drum
No matter the industry or the function, smooth flow needs a pacemaker to set the pace for the system as a whole. The pacemaker can be the rate of consumption, the capacity of a resource, even a policy like a fashion collection’s lifespan.

“The four concepts of flow:

  1. Improving flow is a primary objective of operations.
  2. This primary objective should be translated into a practical mechanism that guides the operation when not to produce (prevents overproduction).
  3. Local efficiencies must be abolished.
  4. A focusing process to balance the flow must be in place.”
Dr. Eliyahu M. Goldratt
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