Theory of Constraints: Five Focusing Steps


 

This post is part of a series that explains the basic components of the Theory of Constraints. So far I have dealt with the types of constraints (internal/external) and the measures of constraints used as part of Throughtput Accounting (throughput, investment, and operating expenses).

This post will explain about the five steps used in focusing an organization on dealing with the constraints or bottlenecks in the system that limit its efficiency and thus its profitability.    It will then compare the five steps used in the Theory of Constraints and the five stages of the Six Sigma process.

1. Five Focusing Steps

Step Explanation
1. Identify system constraint Find the part of the process that limits throughput of system or rate at which goal is achieved.
2. Exploit system constraint Use incremental improvements or kaizen to the throughput by getting the most out of the system with existing resources.
3. Subordinate everything else Adjust rate of other activities in the process so that they are aligned with constraint; align organization to support decision.
4. Elevate system constraint Consider further actions to eliminate constraint, including additional investment in capital equipment and/or technology if necessary
5. Repeat process Once constraint has been eliminated, avoid inertia and search for next constraint to be removed.

Fig. 1 The Five Focusing Step Cycle

2. Relationship between Theory of Constraints’ Five-Step cycle and DMAIC process in Six Sigma

The relationship between this five-step cycle to removing constraints in the system and the DMAIC approach of Six Sigma is somewhat complicated. The Define, Measure, and Analyze would be analogous to Identify, whereas the Improve would correspond to all of Exploit (improving throughput with existing resources), Subordinate (reducing inventory and operating expenses to open up new resources), and Elevate (eliminate constraint with new and existing resources). The Control part of Six Sigma, the extension of improvements from the short term to the long term, would be analogous to the Repeat process in the Theory of Constraints, where improvement to throughput are extended by focusing on another constraint.

The next post will deal with some analytical tools used in the Theory of Constraints.

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