The Five Focusing Steps (POOGI)
Once Dr. Goldratt, the founder of the Theory of Constraints, was challenged by an aggressive reporter to "summarize TOC in a single sentence." Eli replied: "never mind a sentence, I'll explain in one single word: FOCUS!" Eli's Five Focusing Steps, also known as the Process of On-Going Improvement or POOGI for short, serve as guideposts for driving on-going improvement.
Focusing Step #1: IDENTIFY the system's constraint
Strengthening any link of a chain (apart from the weakest) is a waste of time and energy. Similarly, the vast majority of efforts to "improve" something in the organization fail to result in more profits for shareholders, delight for customers, or satisfaction for employees. This is because most initiatives are not focused on the constraint of the organization.
Yet it is impossible to manage a constraint until you find out what it is! And it is surprisingly easy to find, once you know how to look. Check out our free Constraint Checker Tool.
Focusing Step #2: EXPLOIT the constraint
The output of the constraint governs or restricts the output of the organization as a whole. It is therefore imperative to squeeze as much as possible out of it. Maximize the utilization and productivity of the constraint (NOT utilization and productivity of non-constraints). Rather than immediately purchasing more of the constraint (by buying machines, hiring workers, increasing the advertising budget, etc.) we should first learn to use the resources that we already have more efficiently.
The constraint of most organizations is not well utilized, often less than 50% on a 24x7 basis. If the reasons for under-utilization are not immediately clear, try measuring the constraint's OEE including the breakup of availability/quality/performance. Gather the underlying data and analyze it using Pareto techniques. Once the primary causes are identified, use fishbone diagrams and Five Why analysis to drill down to the root cause for under-performance.
When the root causes are clear, eliminate them on a permanent basis. Quality and productivity tools such as Six Sigma, Poka-Yoke, design of experiments, SMED, etc. often provide the answer, depending upon the nature of the problem.
Focusing Step #3: SUBORDINATE everything else to the constraint
By definition, any non-constraint has more capacity to produce than the constraint itself. Left unchecked, this results in bloated WIP inventory, elongated lead times, and frequent expediting/firefighting. Hence, it is crucial to avoid producing more than the constraint can handle. In a manufacturing environment this is accomplished by choking the release of raw material in line with the capacity of the constraint.
Equally important is ensuring that the rest of the system supports the work of the constraint at all times. It must never ever be starved for inputs, or fed poor quality materials. This can be achieved by maintaining a reasonable buffer of safety stock. Similarly, other established policies and habits can hamper productivity at the constraint and must be systematically aligned to achieve maximum performance.
Focusing Step #4: ELEVATE the constraint
Once the capacity of the system is exhausted, it must be expanded by investing in additional equipment/land, hiring people, or the like.
Focusing Step #5: PREVENT INERTIA from becoming the constraint!
Once elevated, the weak link may not remain weakest. Consider elevating other resources to retain the old constraint, depending on where you wish to have the constraint in the long-term. A new constraint demands a whole new way of managing the the system. We therefore return to Step 1, and thus begins our journey of continuous improvement...
POOGI in Action - Examples
Please find below some example actions that could be taken, based on which focusing step you hare on. Think of it as a starting point to gather ideas for implementing the Process of Ongoing Improvement (POOGI).
This assumes an internal constraint (not always the case) and a manufacturing-type organization. To locate your constraint, try out our constraint finder tool.
Exploit (Utilize 24x7)
Please Note: It is probably NOT NECESSARY to complete all of the above. Rather, use them as ideas to point you in the right direction. Adapt and use as the situation requires.
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