SECTION A-THROUGHPUT Theory on Constraints

The Five Focusing Steps

Step 1: Identify the system constraint. In the first step, an organization identifies the part of the system that constitutes the weakest link. Then determine whether it is a physical constraint or a policy-related issue.

Step 2: Decide how to exploit the constraint. Organizations “exploit” the constraint by utilizing every bit of the constraining component without committing to potentially expensive changes and/or upgrades.

Step 3: Subordinate everything else. With a plan in place for exploiting the constraint, the organization adjusts the rest of the system to enable the constraint to operate at maximum effectiveness.

Evaluate the results to see if the constraint still holds back system performance. If it is, the organization proceeds to Step 4. It not, the constraint has been eliminated and the organization skips ahead to Step 5.

Step 4: Elevate the constraint. If an organization reaches Step 4, it means that Steps 2 and 3 were not sufficient in eliminating the constraint. At this point, the organization elevates the constraint by taking whatever action needed to eliminate it.

This may involve major changes to the existing system, such as reorganization, divestiture, or capital improvements. Since these typically require a substantial up-front investment, the organization should be certain that the constraint cannot be improved from Steps 1 through 3.

Step 5: Go back to Step 1. After a constraint is broken, the organization repeats the steps all over again, looking for the next thing constraining link. At the same time, the organization needs to monitor how the changes related to subsequent constraints impact the already improved constraints.

Every system has a bottleneck.