Anticipating Constraints with Enterprise Asset Management

Enterprise Asset Management Blog

Paul McNamara

The Theory of Constraints (TOC) was widely popularized in Eli Goldratt’s best selling book, “The Goal.” In our work in test, we’ve leveraged these principles to produce award-winning Enterprise Asset Management capabilities and results.

  • 400% increases to asset utilization

  • 25% to 75% reduction in operating capital requirements

  • 25% to 50% improvements to process speed

  • Increased Investments in new missions

Eli Goldratt has spoken about his use of TOC as a way of focusing Lean and Six Sigma practices to improve results by as much as 10X to 15X. This has been our experience as well.

Theory of Constraints Using Enterprise Asset Management

TOC is a fundamental methodology for focusing improvement efforts on those constraints that have the largest impact on overall system speed and throughput. Unlike the simple manufacturing operation discussed in “The Goal,”, engineering constraints are often significantly more dynamic and complex.

In the manufacturing process, product requirements at every step of the process are known. In the engineering process, they are often being designed, modified, or negotiated in real-time during development and are more settled during qualification testing. Lack of capability and tools to cope with this process played out across multiple projects often sharing equipment and support services leads to quickly emerging and evolving constraints. Scireo Accelerated Enterprise Asset Management helps bring visibility to constraints in highly complex environments.

Categories of Constraints

Goldratt distinguishes three categories of constraints.

Resource constraints focus on people and equipment capacity bottlenecks. We find in engineering environments these constraints often develop because of flawed policy and missing, flawed, and incomplete knowledge.

Policy constraints are distinguished as operating rules or measures, like localized efficiency optimization, that often results in a restricted output of the system. The mindset of “local optimization” is what leads to habits like hoarding of equipment and knowledge.

Permanent constraints are those constraints that “always” exist like the knowledge and capability of employees. This constraint is much more consequential today than it was when Goldratt wrote “The Goal” as we are launched in the new competitive situations of the Fourth Industrial Revolution that require new knowledge to compete. Today knowledge must be managed as its own constraint with real consequences to results for not doing so.

Situational Awareness of Evolving Constraints and Contingencies

Test teams need to learn to move with the fluidity of a professional sports team constantly assessing their situation, determining what is possible, and then taking the action that is most likely to enable them to win the game. Scireo Accelerated Enterprise Asset Management system is highly configurable to enable users to know their asset and resource situations quickly and then to be able to act quickly to resolve any conflicts.

In this 30-second video demonstration, a hockey team moves through multiple situations. The dark team moves from defense to offense, moves toward their opponent’s goal managing constraints produced by the rules of the game (not going offside across the blue line) while they assess the constraints to success their competition produces. Teammates coordinate with each other to defeat the constraints produced by their opponent by producing multiple contingencies or options for the player with the puck. Players without the puck get open for a pass to produce a situation that puts the team in a better competitive situation to score a goal.  Everyone on the team holds their role. When the players can anticipate each other’s actions and have the skills necessary to perform in their role they trust each other.  Trust is critical for speed. Each player’s knowledge/skill produces contingencies/opportunities for team action.  Teammates coordinate in a fluid flow.

Using Enterprise Asset Management to Improve Situational Awareness

Unlike a sporting event, there is often action taking place “out of sight” that results in changing situations. Another project is delayed producing a conflict with one of the pieces of equipment your team needs. Without systems that make the teams situationally aware, both teams will likely be surprised at the last minute causing cascading breakdowns for one team or the other. The constraint doesn’t have to be a million-dollar asset, it is just as often a device that doesn’t cost much except for the opportunity cost of “the standing army” that can’t complete their task.  This happens quite often but is not difficult to solve if you have the necessary capabilities.

Old Policy and Knowledge Almost Always Causes Unwanted (but Predicatable) Constraints

One policy that is a vestige of the previous industrial revolution is the focus on local optimization. This is the optimization of budgets and efficiencies in functional “silos” disconnected from the performance of the whole team. Hoarding of resources and knowledge generally emerges as the most effective strategy for local optimization even though it kills speed and adds significant costs to the whole system.

Speed is only possible when functions are lead to increase the domain-specific knowledge of the members and then have the capability to use that knowledge strategically in collaboration with cross-functional teams. Accelerated Enterprise Asset Management does this.

Manage Constraints with Accelerated Enterprise Asset Management

Scireo Accelerated Enterprise Asset Management includes unique capabilities that enable your teams to produce speed, cost, and quality advantages.  We help teams connect, power, and accelerate their performance and, when they do, they often win enterprise awards from their management.

CONNECT: We connect teams with integrated workflows that help cross-functional teams to coordinate, collaborate and share as they see emerging resource constraints, whether they be people or equipment ranging from fixed capabilities, e.g. wind tunnels, EMI chambers, engine test cells, or test benches, to portable and sharable capabilities e.g. meters, scopes, or analyzers. These integrated workflows enable previously disconnected departments to, Work Together, Better!

POWER: We power teams with contextual knowledge, like equipment capabilities or availability, that reduce knowledge and resource constraints by the correct contextual knowledge in workflows enabling a quick assessment of contingencies in a fast-changing environment or enables more robust capital planning with knowledge of equipment obsolescence and health states.

ACCELERATE: We help teams accelerate with acceleration algorithms that identify locations where policy or knowledge constraints produce perverse incentives (like hoarding) which leads to resource or knowledge constraints. Sente’s Accountability Practices and various tactical and strategic services are used to enable our Acceleration Algorithm.

Strategic Services help your teams quit old habits and practices and align Scireo’s new accelerated Enterprise Asset Management practices with the strategic intentions of the business. Strategic alignment occurs through governance, management, and S.E.A.L. performance practices.

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Notable Quotes

“Sente’s Scireo® solution sets a new benchmark in customer experience by increasing collaboration and communications among all participants of a test program. They drive cycle time and cost efficiencies, optimizing asset utilization and technical labor productivity, and applying best practices in knowledge management to increase speed and drive standardization of test resources.”

Frost & Sullivan Analyst