Focused Operations Management

Chapter 5. Management by Constraints in a Bottleneck Environment

This chapter focuses on situations where system throughput is limited because of a resource constraint (bottleneck). In these situations, you must focus on the constraining resource and manage it efficiently and effectively. Any improvement that adds effective capacity to the constraint, adds throughput to the whole organization.

Step 4—Decide How to Exploit the Constraint and Break Dummy and Policy Constraints

In a situation of resource shortage (human or material), the inclination is to solve the resource shortage by seeking additional personnel for service, sales, development, or production, or by acquiring additional equipment.

The step of exploiting and utilizing the constraint means we can do much more with what we already have. That is, extract significant additional output by focused management of bottleneck resources. The decision about whether to increase resources should be postponed until after full exploitation of the improvement potential of the current resource constraints.

Improvement through exploitation can be achieved relatively fast, and therefore, it is the most realistic improvement for the short term. Experience has shown that in every system it is possible to extract more by better system management and focus on existing constraints. Exploitation is performed on two dimensions: efficiency and effectiveness (see Figure 5-1 ). At the same time, we must break policy and dummy constraints:

• Efficiency: ...