LearnLesson 4 of 8
The five steps
Identify, exploit, subordinate, elevate, repeat. Step four comes after two and three, always.
Once you know what the constraint is, there is a fixed order for dealing with it. Five steps. The order is the point.
1. Identify. Name the one thing limiting output right now, with evidence. That is what the rest of this tool does with you.
2. . Get the most out of the constraint without spending money. Never let it sit idle. Never let it work on the wrong thing. Never let bad inputs reach it. Take away anything someone else could do. These are the highest-return decisions available to you, and most owners skip them because they are unglamorous.
3. . Re-tune everything else to serve the constraint. Other parts of the business are supposed to have slack now. This is where most attempts fail, because it means telling people to be less efficient locally so the whole system produces more.
4. . Only now add capacity: hire, buy, automate, outsource. If you do this before steps two and three, you pay for capacity on a resource that was thirty percent used.
5. Repeat. The constraint moves. It always moves. Often it moves to a rule you wrote to protect the old constraint. Go back to step one.
Step four comes after two and three. Always. That single rule saves more money than any other idea in this method.
Check yourself
Two questions. Pick one answer each; you will see why straight away.