Local Optimization

gombadmin Blog

By Steve Cuthbert, Director of Operational Excellence

We have all been part of improvement projects or initiatives that fail to deliver real and lasting improvement. In fact, many studies show upwards of 70 percent of improvement initiatives ultimately fail to deliver intended results. This creates an inherent conflict for organizations as they feel the pressure to continuously improve—yet they receive little return for the time and resources allocated to improvement efforts.

The core problem is that organizations often approach improvement much in the same way they view operations—by managing individual units, divisions, or functions in isolation from one another. In improvement terms, this can lead to local optimization, a situation where we can actually improve one part of an organization but fail to achieve results. Even worse, improvement activities in one area can actually decrease performance in other areas, wasting critical capacity.

The tendency toward local optimization is reinforced by the fact that waste and variability occur everywhere in an organization. The key is to take a system-level view to align and focus improvement efforts where they will deliver results for the organization as a whole. A practical way to do this and avoid the pitfalls of local optimization is to develop a Throughput Operating Strategy or TOS. A TOS is a one-page operational improvement strategy that:

  • Clearly articulates the goal of the organization or system
  • Identifies a system-level performance measure with a clear improvement target
  • Provides an easily understood high-level process map
  • Identifies the system-critical resource or activity that should be the focus of improvement efforts

These elements combine in a TOS to create a shared vision for improvement—where all the various parts of an organization are synchronized and collectively working toward measurable results.