- Step 1: Identify the system constraint.
- Step 2: Decide how to exploit the system constraint.
- Step 3: Subordinate everything else to the system constraint.
- Step 4: If necessary, elevate the system constraint.
- Step 5:When the current system constraint has been broken, return to Step 1, but don’t let inertia create a new system constraint.
Subordination
If you were to look up the definition of subordination, it would say something like being subservient to something. As it applies to the Theory of Constraints, it simply means that the non-constraint components of any system must be adjusted to a setting so that it will enable the constraint to operate at its maximum effectiveness without loading the system with excess work-in-process inventory.
In Step 3 of the five focusing steps we are instructed to subordinate. So, what does subordinate actually mean? Remember when you correctly answered the question about how fast Steps 1 and 2 should be running? By definition, any non-constraint has more capacity to produce than
the constraint does. And if you attempt to drive efficiencies higher and higher, this will result in swollen WIP inventory, prolonged lead times, and frequent expediting or firefighting. It is absolutely critical to avoid outproducing the constraint. In any manufacturing environment this is accomplished by choking the release of raw material in line with the capacity of the constraint.
Equally important is making sure that the rest of the system supports the work of the constraint at all times. This means that the constraint must never be starved for inputs or fed poor quality materials. This can easily be achieved by maintaining a practical buffer of safety stock. By the same token, other established policies can actually hinder productivity at the constraint and must be methodically aligned to achieve maximum performance. The total output of the constraint controls the output of the total system. This is why it is so important that we work to squeeze as much as possible out of it. In terms of maximizing efficiency, it only makes sense to do this in the constraint and not in the non-constraints.
Step four of the five focusing steps tells us that it might be necessary to elevate the constraint. This means that rather than immediately rushing out to purchase more things that increase the output of the constraint, by doing things like buying more equipment or hiring more workers, or even increasing the advertising budget, we should first learn to better utilize the existing resources that we already have. Many times, I have seen companies spend excessive amounts of money needlessly because they haven’t focused their improvement efforts on the system constraint to reduce waste and variation.
Step five tells us that when the constraint is elevated, it will move to a new location within the system. And when it does move, we must be prepared to immediately move our improvement effort to the new constraint, if we are to keep the improvement effort moving in the right direction. So, these are the five focusing steps that Goldratt and Cox wrote about in their book, The Goal. This then is the essence of system improvement.
In my next post, I'm going to lay out the foundation of my new book, The Secret to Maximizing Profitability, which is written as a business novel much like Bruce Nelson's and my other two business novels, Epiphanized and Focus and Leverage.
Bob Sproull
If you were to look up the definition of subordination, it would say something like being subservient to something. As it applies to the Theory of Constraints, it simply means that the non-constraint components of any system must be adjusted to a setting so that it will enable the constraint to operate at its maximum effectiveness without loading the system with excess work-in-process inventory.
In Step 3 of the five focusing steps we are instructed to subordinate. So, what does subordinate actually mean? Remember when you correctly answered the question about how fast Steps 1 and 2 should be running? By definition, any non-constraint has more capacity to produce than
the constraint does. And if you attempt to drive efficiencies higher and higher, this will result in swollen WIP inventory, prolonged lead times, and frequent expediting or firefighting. It is absolutely critical to avoid outproducing the constraint. In any manufacturing environment this is accomplished by choking the release of raw material in line with the capacity of the constraint.
Equally important is making sure that the rest of the system supports the work of the constraint at all times. This means that the constraint must never be starved for inputs or fed poor quality materials. This can easily be achieved by maintaining a practical buffer of safety stock. By the same token, other established policies can actually hinder productivity at the constraint and must be methodically aligned to achieve maximum performance. The total output of the constraint controls the output of the total system. This is why it is so important that we work to squeeze as much as possible out of it. In terms of maximizing efficiency, it only makes sense to do this in the constraint and not in the non-constraints.
Step four of the five focusing steps tells us that it might be necessary to elevate the constraint. This means that rather than immediately rushing out to purchase more things that increase the output of the constraint, by doing things like buying more equipment or hiring more workers, or even increasing the advertising budget, we should first learn to better utilize the existing resources that we already have. Many times, I have seen companies spend excessive amounts of money needlessly because they haven’t focused their improvement efforts on the system constraint to reduce waste and variation.
Step five tells us that when the constraint is elevated, it will move to a new location within the system. And when it does move, we must be prepared to immediately move our improvement effort to the new constraint, if we are to keep the improvement effort moving in the right direction. So, these are the five focusing steps that Goldratt and Cox wrote about in their book, The Goal. This then is the essence of system improvement.
In my next post, I'm going to lay out the foundation of my new book, The Secret to Maximizing Profitability, which is written as a business novel much like Bruce Nelson's and my other two business novels, Epiphanized and Focus and Leverage.
Bob Sproull
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