Are you familiar with the “five focusing steps”? This approach is at the heart of the Theory of Constraints (TOC), the school of thought initiated by Dr. Eli Goldratt, author of the bestseller “The Goal.”
If you have 1 identified your constraints, 2 optimized their use, 3 subordinated other resources to these constraints, and 4 raised the performance of the constraints, well done! You’ve made great progress, and now it’s time… not to stop there!
Continuous improvement, as its name suggests, never stops. You’ve increased the performance of your constraint, so another constraint may be emerging that needs to be addressed. Reviewing the system load graph regularly as part of your S&OP process is crucial for sustaining progress.
The worst thing about business is not moving forward. The world is changing, your competitors are making progress. If you rest on your laurels, it means you’re going backward. Flow performance improvement requires constant attention to identify and resolve new constraints. Over time, you’ll discover additional bottlenecks and relax existing ones that are holding back your flow and impacting lead times.
In my experience, this stage is the most difficult. The initial enthusiasm during steps 1-2-3 often wanes after the project concludes. Without continued focus, the momentum for pull-flow management can fade. New team members and managers may lack experience, shared understanding, and alignment on flow-centric strategies.
I’ve spent almost forty years in the industry and have unfortunately witnessed situations where remarkable achievements, like constraint-based performance improvements and pull-flow organizations, disintegrated over time. These regressions often stem from locked-in managerial practices, outdated systems, or disruptive changes such as implementing new supply chain management software.
For this approach to succeed long-term, you need to make it part of your company’s DNA:
- Establish a systematic training plan for new recruits and existing teams.
- Incorporate formal performance reviews with flow-centric KPIs based on constraints. Tools like Intuiflow performance reports help sustain focus on what matters. Finance’s involvement can help make these practices sustainable.
- Define a benchmark of flow-centered best practices and mandate progress assessments. Link performance measurement and compensation to improvements against this benchmark to combat inertia.
- Use software designed for constraint-based practices, like supply chain management software such as Intuiflow, to perpetuate improvement and structure.
By repeating and institutionalizing these steps, you’ll achieve lasting flow performance improvement and resilience against the inevitable challenges.
To dive deeper into the practical application of the five focusing steps, visit the blog Understanding the Law of Large Numbers in Supply Chain.
