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The Avraham Y. Goldratt Institute in New Haven, CT won an estimated $96.7 million firm-fixed-price, indefinite-delivery/ indefinite-quantity contract to provide training, implementation, and sustainment support for Theory of Constraints, Lean practices, and Six Sigma within the Naval Aviation Enterprise. DID has covered the US Navy’s affinity for this approach.
What is Theory of Constraints, and why is it so powerful?
The theory of constraints was developed by Eliyahu Goldratt, and is best known as the idea behind the business best-seller The Goal [Library of Congress | Online retailers]. In brief, TOC holds that changes to most of the variables in an organization usually have only small impacts on overall performance and the bottom line. There are few variables—perhaps only one—for which a significant change in local performance will effect a significant change in global performance. Such a variable is called a constraint. Therefore, if you wish to achieve more of your goal, you must identify your constraint, focus on it, and follow through.
Derivatives of TOC have been applied by AGI and others to many aspects of organizational performance including manufacturing, maintenance, supply chains, scheduling, ERP systems, and project management.
TOC has been used in various capacities by defense organizations like BAE Systems, Boeing’s F-22 Raptor project and its Printed Circuit Board Center, the USAF Healthcare System and Flight Test Center, and Israeli Aircraft Industries.
Work on this contract will be performed at various military facilities located in San Diego, CA (15%); Norfolk, VA (14%); New River, NC (7%); Cherry Point, NC (6%); Lemoore, CA (5%); Miramar, CA (5%); Jacksonville, FL (4%); Kaneohe, HI (3%); Oceana, VA (3%); Whidbey Island, WA (3%); Beaufort, SC (2%); Corpus Christi, TX (2%); Fallon, NV (2%); Ft. Worth, TX (2%); Marietta, GA (2%); Mayport, FL (2%); New Orleans, LA (2%); Newburg, NY (2%); Pt. Mugu, CA (2%); Washington, DC (2%); Yuma, AZ (2%); Bremerton, WA (1%); Everett, WA (1%); Camp Pendleton, CA (1%); Willow Grove, PA (1%); and in the following Japanese locations: Atsugi (2%); Misawa (2%); Okinawa (2%); Iwakuni (1%); Sasebo (1%); Yokosuka (1%). Work is expected to be completed in November 2010.
This contract was competitively procured under an electronic request for proposals as a 100% small business set aside; three offers were received. The Naval Air Warfare Center Aircraft Division in Patuxent River, MD issued the contract (N00421-06-D-0003).
