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the constraint and therefore needs to be corrected as soon as possible. We call an improvement at a non-constraint “local optima” if the improvement will raise the performance of the non-constraint significantly above the level of “good enough” (too much) and/or cause the performance of the constraint to deteriorate. Therefore, we should never make the mistake of thinking that TOC’s 5FS says non-constraints are not important. Non-constraints are necessary conditions but have to be managed to perform within their required “threshold” level of good enough—not too much, but also not too little. If they are performing below their threshold, they must be improved.

To determine what this threshold level is for non-constraints, TOC uses the concepts of capacity, stock, and time buffers. If the buffer for which a non-constraint is responsible (e.g., Human Resources department to ensure a sufficient pool of skilled craftsmen; Procurement to ensure sufficient stock and acceptable lead times of raw materials and purchased parts) is in the “red,” this indicates that one of two changes in the starting conditions occurred. Either the demand has increased (which means the capacity of the non-constraint might have to be elevated) or the supply performance is less reliable than assumed or is not sufficient to maintain the buffer (which means the non-constraint’s performance must be improved). At the same time, if a buffer is maintained without too much red zone penetration, it means the performance of the non-constraint is good enough should not be improved further until red zone penetration becomes too much (more than 10 percent).

In summary, the 5FS provide a generic process for achieving CI in any organization, and should be the focusing mechanism for all process improvements.

FIGURE 15-8 Applying TOC’s 5FS to a brewery.

Applying the 5FS to Achieving CI at a Brewery

Figure 15-8 shows how the 5FS can be used within a TOC-based CI process at a brewery to:

Identify the flow constraint (fermenting vessels—FV);

Decide how to better exploit the flow constraint (by reducing capacity lost on setups and cleaning, planned and unplanned maintenance, starvation and blockage, and excess/over-production); and

Determine the subordination actions-the change initiatives (projects) needed to better exploit the constraint (faster cleaning-in-process or CIP project, critical equipment reliability improvement project, brew house cycle time reduction project, adding a shift pool to buffer against absenteeism, adding a “War Room” to report on the status of buffers every shift, and deciding on corrective actions and a project to reduce batch sizes to reduce over-production).

Each of these subordination action decisions was the result of breaking a previous subordination conflict that blocked better exploitation of the system constraint. For each project, the impact on Throughput (T), Operating Expenses (OE), and Inventory (I) are calculated as well as the time to implement duration to determine the value unlocked (Value = Benefit – Costs). This one-page summary is referred to as a “Constraint Exploitation Sheet” that can also be used for capturing, communicating, and auditing the impact of the constraint exploitation change initiative.

Applying the 5FS to Develop a Business Strategy—the Viable Vision Process

The most effective way of using the 5FS is when it is applied at the organizational level. In his recent public “Now-and-into-the-future” seminars, Goldratt recommends that in the case of for-profit companies we should start with the assumption that (at the highest level) the constraint for profitable growth is simply management time (bandwidth). But how do we apply the 5FS to management time? To help identify where management should focus (not waste) their scarce time, we should view the market as a strategic constraint and apply the 5FS accordingly.

This means that “Step 2—Decide how to exploit the system constraint” is really deciding what conditions, if satisfied, will get customers to pay more or buy more (i.e., the conditions