Advanced Projects, Inc.

 

A study released in the May, 2006 APICS magazine demonstrates that TOC is twenty times as effective as Six Sigma, and nearly ten times more effective than lean at causing cost savings. I find this remarkable result especially interesting because cost savings are a side benefit of TOC...TOC focuses on increasing Throughput.

This is the only scientific double-blind study of its kind performed "in the wild", i.e. in actual business plants. The authors summarize the results of over 100 improvement projects, where:

  • 11 plants applied Six Sigma
  • 4 plants applied Lean
  • 6 plants applied TOC, Lean and Six Sigma

The results are unequivocal:

A little further analysis shows:

If we assume linearity (i.e. that the treatments are additive), we can estimate TOC alone. The 11 six sigma plants saved 0.63% per plant, and the 4 Lean plants saved 1.5% per plant. So, we subtract 6x(.63+1.5) = 13% for the 6 plants that did the combined, the estimated TOC alone savings is 76%, or ~13 % per plant. So, TOC is twenty times more effective than six sigma, and around nine times more effective than lean.

Lean Project Management (LPM), API's extension of CCPM, takes the same approach as the workers in these plants: combining the synergistic effects of the three improvement approaches. The combination caused savings of 14% (of the total saved) per plant, or 24 times more effective that six sigma alone, and ten times Lean alone.

Pirasteh, R. and Farah, K. (2006). Continuous Improvement Trio: The top elements of TOC, lean, and six sigma make beautiful music together. APICS magazine, May, 2006 pp. 31-36