by Rick Carlton
Have you ever experienced an unidentifiable ‘slowness’ in your company’s business efficiency? I don’t mean a corporate ‘bad hair day’ kind of problem; but a serious sense that something is wrong deep in the bowels of your operation? Of course you have. As a matter of fact, anyone who has managed or owned a business has; but then, the next and most obvious question becomes. what do you think it might be? Since I have gone to the Rodeo once or twice myself, and in order to provide a short and sweet solution to your conundrum I, therefore offer the following hoary hypothesis; ‘a chain is only as strong as its weakest link.’
To operate a business efficiently these days (read as making money consistently), one has to continually critique, refine and grease a friction-prone collection of moving intellectual, corporal and virtual business dependencies. If you handle those macro-sized elements correctly most of the time, you at least get a ticket to the next day’s game, after which the evolution begins again. But, if you fail to efficiently deal with them over time, cracks begin to appear in your economic foundation, leading to bad things happening at higher and higher frequencies.
To largely mitigate the potential of these events, however, if one will take the time to consider a business in terms of discrete, yet interlocking processes rather like a chain, as opposed to a singular entity viewed ‘as a thing that makes money,’ you will undoubtedly begin to quickly identify weaknesses that could be better measured, developed or streamlined before trouble hits. This is, in essence, the central theme of Eli Goldratt’s “Theory of Constraints,’ (TOC), and whether your business exists on the basis of hard-goods manufacturing, sales, or intellectual property development, the same value applies; ‘a business can only go as fast as its slowest process.’
From an overall management perspective, how does one begin to break a business down into a series of necessary or non-necessary areas of interest? Consider these initial, but central questions first:
1. Which areas of your business are considered ‘weak’?
2. What people, parts and/or systems will need to be changed to alter and enhance the efficiency of the weak areas?
3. On the other hand, and in the context of item 2, what systems will NOT need to be changed?
Once you have fully developed a general understanding of items 1-3, you can begin to drill into the specifics of each individual area of interest. In this case, I use a four question system, which is entirely congruent with TOC theory:
1. What do you CHANGE?
2. What do you CHANGE TO?
3. How do you CAUSE THE CHANGE?
4. What subsequently motivates CONTINUAL IMPROVEMENT?
In general this overall approach, allows the manager to ‘work a problem’ in real-time while at the same time, creating more and more granularity, since the 7 question series is easily replicated from area to area and process to process.
Although what I have given you in this short treatise is just a taste of what is in store should you begin to consider a ‘Constraints-based’ improvement program, even this primer will be a useful tool going forward, and should allow you to feel somewhat better about how to protect yourself from the effects of typically hidden and malformed business processes. Nonetheless, the concern is real, as is the system, and should you consider more education regarding the TOC methodology, the effort will clearly help create more effective business processes, thereby generating more revenue. After all, that’s why we’re doing this in the first place – right?
To learn more about the ‘Theory Of Constraints’ go to: TOC-ICO