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These are at the heart of the Theory of Constraints, and are in effect the "rules" for managing a manufacturing business when the goal is to grow profits through sales - in contrast to, reducing costs and eliminating waste.
To improve the performance of any system or organization, the steps are:
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Identify the Constraints - There may be more than one, but there are never many.
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Decide how to Exploit the constraints - How do you plan to get the most from whatever is limiting you?
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Subordinate non-constraints to the decisions in steps 1 and 2 - The role of the non-constraints in a system is not to be the best they can be. It is to work in such a way that the constraint is performing in line with management’s "Exploit" decisions.
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Elevate the constraints - Steps 1, 2 and 3 get the most possible out of the existing system; if you still want higher levels of performance you must have more of whatever is limiting performance.
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If, in steps 1 to 4, a constraint is broken (meaning it is no longer a constraint), go back to step 1.
The 5 Steps of the Theory of Constraints are usually accompanied by a powerful caveat … do not let inertia become the constraint! It is all too easy to let decisions made to Exploit and Subordinate remain in place when a new constraint emerges.
When we are dealing with a Policy Constraint, the steps are still valid but applied somewhat differently … you IDENTIFY then act to immediately ELEVATE the policy constraint by replacing it with policy that makes more sense and does not inhibit the company’s performance. This is easier said than done; which is why the Thinking Processes were initially developed.
Return to home: Fast, massive performance improvements
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