The Five Focusing Steps & Systems Constraints

• IDENTIFY the system’s constraint(s[cite: 2, 42]
• Decide how to EXPLOIT the system’s constraint(s). 3. SUBORDINATE everything else to the above decision. 4. ELEVATE the system’s constraint(s). 5. WARNING!!!! If in the previous steps a constraint has been broken, go back to step 1, but do not allow INERTIA to cause a system’s constraint[cite: 2, 42]
• Since the strength of the chain is determined by the weakest link, then the first step to improve an organization must be to identify the weakest link[cite: 2, 42].

Productivity, Metrics, and Financial Health

• Productivity is the act of bringing a company closer to its goal. Every action that brings a company closer to its goal is productive. Every action that does not bring a company closer to its goal is not productive[cite: 2, 42].
• Any money we’ve lost is operational expense; any investment that we can sell is inventory[cite: 2, 42].
• Increase throughput while simultaneously reducing both inventory and operating expense[cite: 2, 42].
• Every company would want to have its throughput go up, and want the other two, inventory and operational expense, to go down simultaneously[cite: 2, 42].
• Central to knowing if the company is making money: net profit, ROI and cash flow[cite: 2, 42].
• Bad cash flow is what kills most of the businesses that go under[cite: 2, 42].
• Throughput[cite: 2, 42]
• The next measurement is inventory[cite: 2, 42]
• Operational expense[cite: 2, 42]

Science, Learning, and Operations

• I view science as nothing more than an understanding of the way the world is and why it is that way[cite: 2, 42].
• I sincerely believe that the only way we can learn is through our deductive process[cite: 2, 42].
• How easy it is to give advice when the responsibility is on someone else’s shoulders[cite: 2, 42].
• Employees have to feel good about their work in order to be productive[cite: 2, 42].
• You can’t make money for long without a quality product[cite: 2, 42].
• Something is wrong. I don’t know what it is, but something basic is very wrong. I must be missing something[cite: 2, 42].