Page 99 - The Handbook for Quality Management a Complete Guide to Operational Excellence

86 I n t e g r a t e d P l a n n i n g S t r a t e g i c P l a n n i n g 87

would become the system constraint, they could have chosen to
either (1) leave the con straint where it was—at the surface-mount
machine, or (2) begin long-lead time acquisition of ATE and ATE
operators to boost the ATE section’s capacity before increasing the
surface-mount capacity. Doing so would have increased system
performance, yet preserved the system constraint at a location
that was far easier to manage.
Another important factor to consider is return on investment.
Once the company described above broke the surface-mount
constraint, there was potential to generate more Throughput, but
how much? If the ATE’s capacity was only slightly more than
that of the original sur face-mount machine, the company might
have gained only a small increase in Throughput as a payback
for the cost of the new surface-mount unit. This could become a
definite disappointment.
As long as the next constraint poses a substantially higher limit
than the existing one, it’s probably safe to say that the company did
the right thing. Even if exploiting the ATE is more difficult, the
increase in Throughput might be worth the aggravation. The ATE
could always be loaded a little less, and the company would still
realize more money. What’s the lesson here? Assessing the real
return on investment from an elevation action requires an under-
standing of constraint theory, where the next constraint will be, and
how much Throughput will increase before hitting the next con-
straint. So the “evaluate” part of the eleva tion step can be extremely
important. It’s important to know where the new constraint will
occur, because it could affect our decision on how to elevate.

How to Determine Where the Next Constraint Will Be
The easiest way to do this is to apply the first three of the five focus-
ing steps “in our heads,” before actually elevating for the first time.
In other words, identify the next most limiting factor, inside or out-
side the system, that will keep the whole system from achieving
better per formance after the current constraint is broken. Then
determine what actions will be necessary to exploit that new con-
straint in the future, and how the rest of the system will have to act
to subordinate itself to the exploitation of the new constraint.
Once this is done, the ramifications of each alternative to ele-
vate should be obvious, and a better-informed decision is possible
about which alternative to choose—and it might not be the obvi-
ous choice, or the cheapest one!
5. Go back to Step 1, but beware of “inertia.” Even if the exploit and
subordinate steps don’t break the system constraint, the elevate
step very likely will, unless a conscious decision is made to curtail

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