Tuesday 15 April 2008

on Mura, Muri, and Muda

(specifically, from Jim Womack’s e-letter )

My first reaction is that he is pretty much right on, particularly since his name is Womack.
Second reaction is to suggest that there would have been a much simpler way to come to the same conclusion, 20 years ago as well. (much simpler way)

Remember our favorite equation: P=T-OE (from Goldratt's Theory of Constraints in the Goal). You can drive OE to its limit (0), but that causes P to reach a max at T. If we assume that the effort is spent driving OE to 0, then we probably do not have cycles to increase T at the same time. Therefore, P's max value becomes T.

Comparing to the 3Ms, driving OE to its limit is the same as eliminating waste. Most of what everyone sees as "waste" falls in the OE category and so, it makes sense. Eliminating waste therefore logically stagnates profit at what ever level the organization optimally can achieve given whatever its throughput currently is. To release frozen capacity for profit (my new byline, I think), ignore the Muda, focus on increasing the Throughput. Mura and Muri, in their combination, are the constraints of the system. True, you can't optimize the organization by focusing on the T alone, you must address unnecessary OE, but focus first on the other two and once they are converging where you want them to, you will have plenty of time to focus on Muda.

And besides, any parent knows, muda always happens last.

1 comment:

Tom Looy, Tacit Knowledge PM said...

You can't properly identify waste (Muda) until you know what is of value. Value is found in implementing Muri and Mura which are similar to TOC's efforts in increasing throughput.

So you are right, focusing on identifying waste initially will have limited benefits. Looking for waste after you have implemented Agile will have you focus on those things which constrain your throughput. This will result in greater profit increases.