Organization Management Review of Deming and Goldrat Research Paper

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Organization Management

Review of Deming and Goldrat: The theory of constraints and the system of profound knowledge- the Decalogue

by Domenico Lepore and Oded Cohen

Taking on the ambitious goal of integrating the concepts of Dr. W. Edwards Deming and the precepts he defined in the Deming System of Profound Knowledge and Dr. Eli Goldratt's Theory of Constraints, authors Domenico Lepore and Oded Cohen have created the Decalogue (Lepore, & Cohen, 1999). What is immediately apparent from this book is the balance it has attained by using the Theory of Profound Knowledge as the foundation of the book and relying on the Theory of Constraints (TOC) as the catalyst for enriching the book with industry-specific and situational contexts. Eli Goldratt's TOC frameworks also serve to unify the ten foundational elements of the book. The authors are very insightful in how the position Six Sigma and lean methodologies and best practices in the context of the ten foundational messages of the book as well. Instead of going purely into a more quantitative and metric-driven analysis of quality, in effect melding the Deming and Goldratt methodologies together through empirical or even equation-based analysis, the authors instead concentrate on a more end-to-end process view. At one point in the book the authors call this a holistic view (Lepore, & Cohen, 1999) of how the Theory of Profound Knowledge and TOC can be combined to apply constraint-based minimization logic to any system, regardless of its objectives. The authors present the ten foundational elements of the Decalogue and then use TOC as the accelerator to show why speed is so critical in managing constraints.

Detailed Analysis and Critique

The cornerstone of this book is that without exceptionally well defined and relevant customer-based goals, no amount of quality management philosophies, frameworks, or quantitative measures of performance benchmarking including Six Sigma, Total Quality Management or lean process improvement will matter. The authors point out that quality management programs often have the customer missing (Lepore, & Cohen, 1999) so therefore there is no goal or objective to make the systems relevant. Second, in many process-based manufacturing and services systems, there is a lack of interdependency definition and knowledge (Lepore, & Cohen, 1999). The authors contend that this is the greatest culprit in these systems becoming known for low product quality and lack of consistency. Managing to constraints requires the ability to first stabilize a system and then build a system around the constraints (Lepore, & Cohen, 1999). Seeking to minimize variability of the constraints is where the acceleration and accuracy of processes occurs in the model as defined by the authors (Lepore, & Cohen, 1999). Third, the authors contend that systems that are too heavily reliant on a single approach to quality management, feedback loops tend to be inconsistent and at times unreliable as well (Lepore, & Cohen, 1999). The closed loop nature of systems then suffers over time and the ability to manage constraints, gaining acceleration of the process, is lost.

The authors content TOC as a framework for improving accuracy and quality can be applied across non-manufacturing and production-based processes as well. Their contention is that the foundational elements of the Deming Theory of Profound Knowledge are applicable enough across services-based and knowledge-based systems as well. In support of this point, the authors draw on analysis of constraints. Citing the fact that constraints can be resource and capacity-based, time-based, policy-based organizational and human behavior-based, and even marketing-based (Lepore, & Cohen, 1999) the authors show how using the foundational framework shown in the Decalogue can be just as easily applied to service and knowledge-based systems and their processes as well.

Where the authors excel in their integration of Deming and Goldratt concepts is in the definition of the ten foundational elements of the book. In effect this structure gives the authors the agility and flexibility of define their concepts as applicable to both production and non-production processes, in essence anywhere where there is a process with constraints associated with it.

The framework the authors define in the book is as follows. First, the definition or establishing the system, including its key performance indicators (KPIs), metrics and measures of performance from an operational standpoint is completed. The authors define Thinking Process Tools as the means for establishing the goals for the system (Lepore, & Cohen, 1999). The authors contend that without a goal, there is no system, a point both Dr. Deming and Dr. Goldratt have made in several of their published books and articles. This anchors the framework and also serves to provide insights into how best to navigate through continuous improvement over time. Six Sigma and the DMAIC methodologies seek the definition of quality improvements through the use of metrics and methodologies to measure performance; they do not however provide a methodology for minimizing constraints iteratively or creating a long-term continuous learning program (Park, Ntuen, Park, 2009). The authors acknowledge this and point to the fact that Six Sigma with its DMAIC methodology, lean manufacturing principles, and the Total Quality Management (TQM) do not take into account the need for first reducing the variability of constraints, and second, eliminating constraints on processes. This is unique to the integration fo the Deming and Goldratt concepts. This core aspect of the ten step methodology of this book is what makes it exceptionally unique in the field of quality management and quality control literature.

The second step in the framework the authors define is to understand the system, and apply systemic thinking to its development and continual improvement (Lepore, & Cohen, 1999). As a result of this systemic view, the system is seen as a network of interdependent components that are coordinated and synchronized to achieve the goals of the system. In the applicable chapters to this concept the authors discuss the concepts of value stream mapping, flowcharting, and the development of dependency-based flowcharts. This chapter is also pivotal as it sets the foundation for defining the One System Schematic which is used by the authors to unify the book (Lepore, & Cohen, 1999). This concept of the One System Schematic is the most concrete of the concepts that supports the holistic, process-based view of the organizational change that the authors introduce. The One System Schematic is also integral to how the authors defend their integration of Deming and Goldratt concepts as the authors seek to replace traditional organizational charts, complete with siloed and often disconnected functions, with the One System Schematic instead (Lepore, & Cohen, 1999). This systemic approach to defining the total structure of an organization from a schematic vs. hierarchical structure also sets the foundation for the stabilizing of constraints at the process level, which is a key point of this book. Without the schematic structure of an organization to rely on, the integration across functional departments, divisions and department would make minimizing constraint variation extremely difficult to explain much less accomplish. This systemic approach to defining organizations through the use of the One System Schematic then provides a more agile, flexible architecture on which to present the remaining concepts of the book. The authors do an excellent job defining the One System Schematic and set the foundation for the remaining eight constructs which form the foundation of their book.

Making the system stable is the third phase of the authors' methodology. In this phase they successfully integrate the well-down Deming concept of Act, Plan, Do, Check with the use of statistical analysis tools to minimize variation that Goldratt mentions with his TOC. This phase is essential for the development of five focus steps fop managing systems which is covered in the following phase, build the system around the constraint. The five focusing steps for managing systems the authors recommend is to identify, exploit, subordinate, elevate and finally create recursive logic to go through each of these steps again. The authors contend in this phase that through the use of precise algorithms based on TOC, constraint in different links can be addressed. Without the One System Schematic to normalize constraints across non-manufacturing processes, the following links would not be possible. What is fascinating however is how the concepts of the Drum Buffer Rope (DBR) which is used for production and logistics management, distribution, and critical chain for project management and product development, and the "Unrefusable Offer" can all be equated comparable toe ach other (Lepore, & Cohen, 1999). The authors illustrate that by seeking to first isolate the constraint and then modify the inbound and outbound processes it is integrated with, greater efficiency and performance gains are possible. In this step one of the most critical concepts of the book is also discussed, which is the fact that the constraint determines the pace a system can generate throughout, whether that be service, manufactured goods, or transactions. This concept of speed of transactions will throughout the remainder of the book be increasingly relied on by the authors as a barometer of how well constraints are managed or not (Lepore, & Cohen, 1999).

Identifying the constraint and carrying… [END OF PREVIEW]

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