SURFACE MINING AND subsurface mining

requires expensive machinery and equipment. A 12-ton

front-end loader and 35-ton haul truck, for example, can

cost $1.2 million and $350,000, respectively. A single site

can use several pieces of equipment, with additional capi-

tal needed for the plant’s fixed machinery, pushing the

up-front investment into the tens of millions of dollars.

In 50 Words Or Less • The 6TOC improvement

method employs ele-ments of Six Sigma, lean and the theory of con-straints (TOC) to zero in on process bottlenecks and eliminate waste and variation.

• A 10-step implemen-tation plan based on Eliyahu Goldratt’s chain project management process and Joseph M. Juran’s management principles can help any industry implement 6TOC.

Combining lean, Six Sigma and theory of constraints creates a process improvement powerhouse

by Todd Creasy

December 2014 • QP 45

PROCESS IMPROVEMENT

RockS0LID

: . . . . . . : : . . . . . . : . . . . . . : . . . . . . : . . .

. . : . . . . . . : . . . . . . : . . . .. . : . . . . . ... . . . . : . . . . . . : . . . . . . : . , . . . . : . . . . . . : . . . . . .

These capital investments can prevent entry into

the industry and complicate efforts to grow or im-

prove productivity. Because money is the language of

senior management,1 site managers are careful about

unnecessary capital expenses, and often try to focus

on controlling expenses while improving worker and

equipment productivity.

The aim to improve operational results while reduc-

ing inputs or keeping them the same is what led one

organization to embark on a multiyear quest resulting

in a method called 6TOC (pronounced “six tock”) and

results worthy of examination.

6TOC is the unique combination of Six Sigma, lean

and the theory of constraints (TOC).2 Its principles and

deployment steps are shown in Table 1.

Although this approach to process and productivity

improvement is presented here in a case study involv-

ing a mid-southern U.S. mining organization with more

than 50 sites, 6TOC can apply to a broad spectrum of

industries.3

A hybrid combination, 6TOC has elements of Six

Sigma, lean and TOC. Six Sigma focuses on quality im-

provement and reducing production variation,4 while

lean focuses on eliminating waste in all of its seven

forms.5 When these two philosophies are combined

with TOC6 and its focus on bottlenecks, it makes a

potent combination, particularly if there is manage-

rial support to improve productivity. Using TOC’s five

steps, bottlenecks are exploited and elevated with Six

Sigma and lean tools.

Begin 6TOC by identifying the capstone metric. All

organizations have financial or operational ratios that

predict success or profitability. In this collection of ra-

tios or metrics, one has a higher correlation relation-

ship to profitability than all the others.

As part of 6TOC, teams are charged with improving

outcomes that have either a direct or indirect effect on

the capstone metric.

In the mining industry, there are several site-spe-

cific and contemporaneous measurements to con-

sider, such as tons produced per hour, total costs

as a percentage of sales, cost per ton and overtime

expense per ton. Table 2 shows examples of site-

specific metrics.

After studying 14 months of operational metrics and

month-end results for more than 50 locations (n = 700),

the metric most positively correlated to profitabil-

ity was determined to be tons per man-hour (TPMH),

which became the capstone metric.

Similar practices have been conducted at large or-

ganizations to determine a single most-important met-

ric. The focus on Southwest Airlines’ gate turnaround

time and Walgreens’ revenue per customer visit,7 for

example, produced positive results for both organiza-

tions.

When demand exceeds capacityThe next step in 6TOC deployment is to determine the

scope of the value-creation process flow or chain. In

some industries, this may begin with overseas com-

ponent manufacturers, raw material suppliers or an

December 2014 • QP 47

in-house receiving department.

In the mining industry, it begins with the stone

that has been blasted from the stone face. The pro-

cess continues with the stone traveling to the pri-

mary crusher, conveyor, secondary crushers and

more conveyors until it reaches stock piles and is

loaded onto customer trucks, weighed in tons and

ticketed. These tickets produce invoices that are

sent to customers.

After the primary process flow has been un-

derstood, it is separated into three or four seg-

ments. For each data capture, these segments

often begin and end at logical breaks in the pro-

cess and generally have measuring systems at the

beginning or end. In the mining industry, the pri-

mary process is divided into three sections called

phases related to the processing stage of the rock

correlated with the crushing circuit’s continuous

flow system. Figure 1 illustrates a mine’s stone-

crushing primary process divided into three

phases.

Operational bottlenecks —areas in the prima-

ry process where demand exceeds capacity—are

of keen interest to TOC practitioners. Identify-

ing and understanding bottlenecks within each

segment comprise the third major step in 6TOC.

Bottlenecks occur when demand exceeds capac-

ity or when actual production in a specified area

is less than its maximum capability for produc-

tion. In this instance, underperformance in one

critical link reduces total production for the en-

tire chain.

Phase one for a common surface mining opera-

tion commences with the loading of coarse rock

(blasted from a stone face) onto a haul truck to

be dumped into a primary crusher, weighed and

stockpiled. This process requires all personnel

and machinery (a large front-end loader, several

haul trucks and a primary crusher) to be used.

Focusing on this phase of the total process,

can you determine which component is the bot-

tleneck targeted for improvement? This approach

is based on Eliyahu Goldratt’s critical chain and

strength of throughput in which the collection

of individual steps and tasks in the process and

their relationships ultimately provide power to

the process.8

Strength arises from recognizing the con-

PROCESS IMPROVEMENT

QP • www.qualityprogress.com46

Step 1 Identify and validate operational metrics.

Step 2 Identify capstone metric through correlation analysis.

Step 3 Identify value-creating, primary process flow.

Step 4 Divide primary process flow into three or four logical and measureable segments.

Step 5 Identify bottlenecks or constraints in each segment.

Step 6 Begin with the segment with the most restrictive bottleneck or constraint.

Step 7 Use lean Six Sigma tools to exploit or eliminate bottlenecks in process.

Step 8 Repeat step 7 working through the next most critical bottleneck.

Step 9 Develop a metrics pyramid for your organization identifying pertinent metrics at each level (corporate, division and location).

Step 10 Develop a communication system using the metrics pyramid for pertinent levels in the organization; consider using scorecards and scoreboards.

Steps to implementing 6TOC / TABLE 1

Production Maintenance Costs Safety

Tons per hour Plant availability Cost per ton Days since last incident

Tons per man-hour Rolling stock availability

Labor cost per ton Number of near misses year to date

Site specific metrics / TABLE 2

Critical process flowchart for mining operation / FIGURE 1

Capabilities chart—tons per hour / FIGURE 2

0

500

1,000

1,500

2,000

2,500

3,000

Loader Haul trucks Crusher

2,540

718 910

Coarse rock to primary crusher

Phase I

Conveyed to secondary crusher and then to

stockpiles

Phase II

Loaded on trucks then weighed and ticketed

Phase III

Truck cycle time actual vs. capable / FIGURE 3

2

3

4

5

6

7

8

Cycle time actual Cycle time capable

Cyc

le t

ime

5.07

3.55

2

3

4

5

6

7

8

Cycle time actual Cycle time capable

Cyc

le t

ime

5.07

3.55

6TOC = A method that combines lean, Six Sigma and theory of constraints.

nections among the individual links and steps. The

strength of the throughput is only as strong as the

weakest link. At this juncture, a capabilities chart is

used (Figure 2, p. 47). With a capabilities chart, each

component is independently tested to determine its

maximum output. Emphasis can be placed on the most

chronic bottleneck slowing the entire process phase to

a suboptimal pace.

The front-end loader was measured to determine

how many tons it could load in one hour. The average

for five trials was 2,540 tons per hour. The haul trucks

also were measured, and their combined average haul

per hour was 718 tons. The primary crusher was tested

in five trials producing an average rate of 910 tons per

hour.

The haul trucks seemed to be the bottleneck. Mea-

sures were taken to improve the weakest link and

hopefully raise the average tons per hour of each haul

truck, including exploiting the bottleneck and raising

the entire phase’s throughput.

Because the team had substantiated the haul truck

theory through Six Sigma-style data capture and anal-

ysis, it avoided erroneous assumptions and rule-of-

thumb management. Until this experiment, manage-

ment had considered purchasing an additional haul

truck or a larger crusher to obtain more throughputs.

Both expenditures would have been premature.

Exploiting and elevating constraintsThe second and fourth steps of Goldratt’s five-step

bottleneck improvement process are exploiting and

elevating. Exploiting a constraint involves trying to

get the most possible out of the constraint. Elevating

a constraint involves major changes that often require

capital expenditures to increase its capacity and re-

moving it as a bottleneck in the system.

Methods of exploiting or elevating a constraint can

be associated with people, process and machinery. The

following questions may help start the processes:

People. Are pertinent people cross trained to al-

leviate problems associated with absences? Are em-

ployees performing a task suboptimally because of

poor training or because that’s the way they’ve always

done it? Do employees consciously slow down the

process to avoid potential unpleasant consequences

such as machine failure? Is the 5S workplace organi-

zation method practiced in the facility and monitored

for compliance?

Process. Does everyone understand the upstream

and downstream process implications of his or her

actions? Does everyone know where the hotspots

(or bottlenecks) in the process are? Is there a formal

way of accomplishing a task and a real way of accom-

plishing a task? Have you considered poka-yoke and

its impact on your process? Has anyone documented

process flow recently?

Machinery. Is current machinery being operated

according to its specifications for throughput? Is it be-

ing calibrated regularly? In terms of facilities layout, is

appropriate machinery located closely together?

December 2014 • QP 49

PROCESS IMPROVEMENT

QP • www.qualityprogress.com48

In the mining case study, attempts were made to

exploit the haul truck bottleneck by getting as much

out of the constraint as possible. We began using lean

to determine how much time would elapse during a

typical haul truck cycle. It begins with the truck be-

ing loaded with coarse rock, it travels to the primary

crusher, it dumps the rock into the crusher and it trav-

els back for another load. The distance from rock load-

ing to rock dumping can range from several hundred

feet to two miles.

The time lapse between each load of rock being

dumped into the primary crusher was measured using

a proximity switch attached to each haul truck. The

proximity switch fed information to an on-board GPS

unit linked to a mobile phone and uploaded daily cycle

times into the cloud and database.

We tested each haul truck to see what its cycle time

capability was compared to its actual production time.

Several trials were conducted. Example results are

shown in Figure 3, p. 47. A lower cycle time equates

to greater production levels, thus exploiting the bottle-

neck.

People, process and machinery The capability time was one minute and 30 seconds

faster than the actual. It may not seem significant, but

it was. If each truck carries 35 tons of material, and

the site uses three trucks, the difference is significant.

With a five-minute cycle time, each truck will deliver

96 loads a day (12 loads an hour x eight hours). With a

three minute and 30 second cycle time, each haul truck

will deliver 136 loads a day (17 loads an hour x eight

hours).

These theoretical additional 40 loads x 35 tons x

three trucks equate to 4,200 tons a day in improved pro-

duction with the same equipment, the same equipment

operating hours and no additional overtime.

Let’s explore the people, process and machinery fac-

tors that led to this constraint exploitation.

People. The haul truck operators were not aggres-

sively driving their trucks to achieve maximum produc-

tion. They took their time. The drivers were not posi-

tioning their haul trucks correctly near the loader prior

to being loaded. The loader operator was not loading

the truck efficiently, using techniques that consumed

more time.

Cycle times were not communicated to drivers so

they did not know how they were performing. This

failure to adhere to Joseph M. Juran’s principle of

“placing employees in a state of control”9 was recti-

fied, resulting in a healthy competition between driv-

ers for the lowest cycle time. Times were posted daily

reflecting the previous day’s results. See Figure 4 for

an example.

Process. Other vehicles on the route often would

clog the passageway, slowing the cycle time. The haul

roads were not wide enough in some areas for two

trucks to safely oppose one another in their transport.

Cycle time comparison by driver / FIGURE 4

0

2

4

6

8

10

12

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49

Tim

e

Cycles

Dan

Bill

Kyle

Metrics pyramid for the mining industry / FIGURE 5

Senior level metrics (organization)

• Tons per man-hour (capstone metric)• Cost per ton• Labor cost per ton

Middle metrics (division)

• Tons per man-hour • Tons per hour• Plant availability • Total tons

produced• Average selling price

Foundational metrics (location)

• Haul truck cycle time • Overtime hours• Plant availability • Downtime

hours• Total tons produced

These metrics should provide a line of sight to the capstone metric.

Ultimate lagging metrics

Leading and lagging metrics

Leadingmetrics

6TOC communication system / FIGURE 6

scoreboardand foremen

Each level of metrics needs a real-time communication system.

Audience Form and frequency

Capstonemetric

Middlemetrics

Foundationalmetrics

Daily Seen by site managers

Seen by senior management

Seen by divisional or regional management

Monthly financials

Weekly scorecard

Methods of exploiting or elevating a constraint can be associated with people, process and machinery.

6TOC = A method that combines lean, Six Sigma and theory of constraints.

December 2014 • QP 51

PROCESS IMPROVEMENT

TODD CREASY is an associate professor at Western Carolina University in Cullowhee, NC, and a consultant at Bridgepoint LLC in Asheville, NC. He holds a doctorate in Management from Case Western Reserve University in Cleveland. An ASQ member, Creasy is an ASQ-certified Six Sigma Black Belt.

One truck would have to stop and wait for the other

to pass, causing cycle delays.

Machinery. The roads on the haul route were not

smooth. The rough rides caused bodily discomfort dur-

ing transport and slowed cycle times. Different brands

and models of trucks with different maximum operat-

ing speeds being used complicated team synergy and

produced lower cycle times. Preventive maintenance

was not being performed as required, which slowed

production during downtime events.

Communication strategy The process of exploiting or elevating bottlenecks oc-

curred throughout the site’s entire production flow

process. These findings were replicated to other sites.

With the capstone metric firmly established, each level

of the organization (corporate, strategic business units

and site locations) had metrics that were directly or in-

directly tied to the capstone metric. The establishment

of these associated metrics enabled the organization

to align toward a common direction.

Figure 5 on p. 48 is an example of the metrics pyra-

mid. This pyramid has three sections. The top portion

represents the metrics of primary interest to senior

management, which includes the capstone metric.

The second tier represents middle metrics and is of

primary interest to divisional management. The third

section has foundational metrics used by location-

specific personnel.

The last stage of implementing 6TOC is the manage-

ment and employee communication system. To keep

employees in a state of control, Juran said they must

understand the goal, understand their performance

and have the autonomy to meet the goal if perfor-

mance lags.10

Using lean, a series of communication systems was

established based on the metrics identified as impor-

tant for each level of the organization. Senior manage-

ment received communication monthly through stan-

dard financial reviews and reports on the capstone

metric and other pertinent metric values.

Regional or divisional management received perfor-

mance information weekly that compared locations.

Location-level managers and personnel often required

information that is posted daily and populated with

data from the previous day’s activities. See Figure 6 on

p. 49 for a schematic of 6TOC’s communication system

and Figure 7 for the communication system’s example

of a scorecard and scoreboard.

Doing more with less6TOC enabled the mining organization to go against

the operating paradigms and traditional thinking prev-

alent in the industry. This hybrid of Six Sigma, lean

and TOC proved you can do more with less and don’t

need to reach for the checkbook to improve produc-

tivity.

Because production goals were generally met

before an eight-hour shift was completed, preven-

tive maintenance activities, which were normally

conducted during overtime hours, were conducted

during normal shift hours. Also, because of the ag-

gressive preventive maintenance schedules, plant

and equipment availability climbed into the mid-90%

range from the upper 70 to mid-80% level.

In most locations, little capital was expended to

achieve these results. Most long-time employees previ-

ously believed new equipment or refurbished machin-

ery would have to be purchased to improve equipment

availability and productivity.

Equipment expenses dropped because the desired

tonnage was being produced in fewer hours. Inven-

tory accuracy improved because of the increase in

measurements along the throughput process, which

prevented financial surprises at the end of an account-

ing period.

For a comparison of mean tons per hour, month-

over-month production comparisons by location (rep-

resented in box plots), refer to Figure 8.

Practitioners of continuous improvement con-

stantly search for tools to help lead teams and orga-

nizations toward successful outcomes. The marriage

of lean and Six Sigma illustrates the complementary

strengths each method offers for delivering on organi-

zational or project needs.

The addition of TOC creates a potent combination

for quickly finding root causes and producing solu-

tions with a direct bottom-line impact. Regardless of

industry, 6TOC can save time, effort and money when

dealing with process constraints and productivity im-

provement goals, and enable organizations to better

serve all stakeholders, including customers, suppliers,

team members and managers. QP

REFERENCES1. Joseph M. Juran, The Quality Handbook, McGraw-Hill, 1999.2. Todd Creasy, “Pyramid Power,” Quality Progress, June 2009, pp. 40-45.3. Todd Creasy and Sarah Ramey, “Don’t Lose Patients,” Quality Progress,

February 2012, pp. 42-49.4. Louis Johnson and Kirk McNeilly, “Results May Not Vary,” Quality Progress,

May 2011, pp. 42-48.5. Greg Kruger, “The Power of Prediction,” Quality Progress, June 2013, pp.

26-32.6. Eliyahu Goldratt, Critical Chain, North River Press, 1997.7. Jim Collins, Good to Great, Harper Collins, 2001.8. Goldratt, Critical Chain, see reference 6.9. Juran, The Quality Handbook, see reference 1.10. Ibid.

Scorecard of divisional or regional metrics

Site location

Margin per ton compared to

group average

Cost per ton compared to

group average

Plant availability compared to

group average

A

B

C

D

E

F

G

= good = bad

Scoreboard of site or location-level metrics

Communication system / FIGURE 7

Monthly performance / FIGURE 8

Location A tons per hour

700

650

600

550

500

450

400

March April May June July Sep.Aug. Oct. Nov.

Baseline = 475 tons

36%improvement

463

484

527

583

606

621

577

649

631

Dat

a

Location B tons per hour

June July Aug. Sep. Nov.Oct. Dec.

Dat

a

725

700

675

650

625

600

575

550

10%improvement

613617

647

608

651

673677

Baseline = 625 tons

Location C tons per hour

April May June July Sep.Aug. Oct. Nov.

Dat

a

650

600

550

500

450

23%improvement

Baseline = 500 tons497

517

536526

560 556

602 613

QP • www.qualityprogress.com50