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Why the 5 Focusing Steps are so Important

Most middle and senior managers do not understand or simply are not interested in how their business system works. They are content to focus on their local department and optimise that – rather than understanding the business as a whole to cause it to maximise results. Even top management (CEOs) often do not understand their business. They condone and even encourage their management teams to optimise their local departments – production, marketing sales, finance etc. Wherever local optimisation is the rule the business concerned will always harm the bottom line significantly. Local optimisation is a massive mistake!

The 5 Focusing Steps are guidelines that, properly used, will cause a management team to always reflect on their (local) decisions. Doe the action or decision taken locally help or damage the business as a whole? As we will see the 5 Focusing Steps are a guide, but they do not replace a deep understanding of the business system.

What follows is my second example of the impact of the exploit and subordinate steps on the bottom line. In this example I have chosen another situation in which a there is apparently a clear physical constraint in the factory concerned. However through just a few simple changes to the way the factory works in relation to the constraints (policy changes) they also were able to move from an overloaded situation to being able to meet all demand with the expected lead time.

BTW. If you have any similar examples please share them with me. I will publish them (if there are not too many!

2nd Example of the 5 Focusing Steps in Action

Exploiting the constraint in a coatings (for automotive) factory

Before I arrived at the factory I knew that factory management was lobbying for more vessels to hold paint. They claimed their constraint was the number of storage vessels; they had already submitted a project to install 2 additional vessels.

This time I ran a simple simulation to show the impact of properly exploiting the constraint. Participants were supervisors from the factory and plant management. The simulation went well, the people got the idea and began discussing the constraint. I did not believe the constraint was the vessels since I also knew that quality control had limited capacity due to illness and an accident that reduced capacity by a large amount. Because evaluating colour takes several years to learn adding people to quality control was not going to work.

I led the team to the idea that quality control is the constraint of the system. Initially they were doubtful but when they began to think about the quality control job and the amount of time actually spent evaluating colours it became clear that quality control, even with 2 of their 4 people out of action, had enough capacity to do the job of colour quality control correctly. The decision made was that the colour experts would do only colour evaluations. To collect samples they would no longer walk back and forth between the lab and the factory; they would no longer add the corrections to the mix vessels and they would not wait until mixing was complete. Other employees were found to make the corrections (weighing pigments and adding these to the mixing vessels), people were found to collect samples and the quality control experts found ways to reduce the number of corrections needed. All these actions were "subordinate to the constraint” actions – subordinate to decision that the two colour experts in QA would focus only on colour evaluations.

Once all the actions the team decided were implemented the factory enjoyed a 40% increase in capacity – and no longer needed to buy any added vessels.