Anyone can overcome his problems, according to Curly Washburn (Jack Palance) in the movie, City Slickers*, by concentrating on the “one thing” that is most important in his life. The rugged yet insightful Curly also says that what that one thing is, is up to each person to figure out.
This sage advice is just as applicable to any business, system or process.
As a business owner or manager, you can achieve success by concentrating on the one thing that stands in the way of you achieving your goal. What that one thing is, is different for each company and for each system or process within the company. When you scrutinize each situation, you will find that one thing—the single most important limiting factor (i.e., constraint)—that stands in your way.
A constraint is the one thing that restricts your entire system’s throughput, that prevents you from achieving higher performance or that blocks you from moving forward.
For example, if you find it difficult to obtain raw material for a manufacturing process and that’s the biggest impediment to you achieving your production goals, your one thing is the availability of raw material.
Constraints are also the consequence of poorly designed systems, or untrained or insufficient staffing levels. For example, too few experienced cooks to prepare all the food that restaurant patrons are willing to pay for.
Constraints exist in both service-based and product-based companies; in the office or on the production line. Your limiting factor may be slow lead follow-up, limited equipment capacity, delayed order fulfillment or stalled Accounts Receivable collections.
Constraints aren’t always physical (e.g., lack of cash, material or labor). The limiting factor can also be adverse policies, laws, regulations, rules, or procedures. When a policy inhibits what you want or need to accomplish, or it forces you to do something inefficient or wasteful, you have identified the one thing.
Look deep enough to find the real limiting factor. For example, insufficient sales are usually not a constraint. Insufficient sales are usually the result of a constraint within your sales process or a constraint within the policy that controls what products or services you offer.
Once you identify your company’s one thing—the constraint—systematically work on resolving it so it is no longer the limiting factor. Then focus on eliminating whatever becomes your new limiting factor.
Spending time optimizing anything other than your single most important limiting factor is inefficient at best and ineffective at worst. The most effective thing you can do to get closer to your goal is to systematically eliminate each constraint you encounter.
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*From Castle Rock Entertainment, 1991. Directed by Ron Underwood. Written by Lowell Ganz and Babaloo Mandel.
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