Purpose -The purpose of this paper is to present a comprehensive descriptive analysis of the sequential application of the Theory of Constraints (TOC) five-step focusing process in improving the effectiveness of a service process that was limiting the performance of the entire service system. Design/methodology/approach -The five-step approach is schematically presented with each step being described and evaluated relative to its role in effective constraint management. A detailed example provides additional insights and nuances into its use in managing the constraint within a banking organization's subsystem, namely, the loan application and approval process. This hypothetical, realistic, and comprehensive illustration iterates through several cycles of the five-step focusing process to demonstrate how managers are able to address different types of constraints. Findings -The paper provides a detailed description on how each of the five-steps can be used to improve the organization's performance relative to its stated goal by focusing management's attention on the system's (or an aligned subsystem's) leverage or control point. Major types of constraints include physical or capacity limitations and restrictive policies. Constraints may be located either internal or external to the process or system being managed. Practical implications -Various managerial implications are discussed including: the relevance and utility of applying the TOC five-step focusing process in services; advantages associated with utilizing this structured approach for continuous improvement in services; and some strategic issues associated with the placement of the ubiquitous system constraint. Originality/value -Although the successful application of the five-step focusing process has been well documented in improving manufacturing processes, this paper provides an illustrative tutorial which details its application in effectively managing a service process.
An increasingly utilized framework for implementing the continuous improvement management philosophy is the Theory of Constraints (TOC). Although this systemic managerial approach was initially developed and applied in the manufacturing sector, its underlying philosophy has been expanded to address three basic questions: What to change?; What to change to?; and How to cause the change? Demonstrates how a manager could apply the TOC thinking process (TP) logic tools to answer the first two questions for a small service organization. In regard to the first query, uses a relatively new procedure called the “three‐cloud approach” to determine the core problem or root cause responsible for the majority of the problems currently faced by management. By using this approach, a manager creates a current reality tree (CRT) that uses sufficiency logic to document the cause‐effect relationships responsible for a system’s current state. In regard to the second query, develops another TOC logic tool, a future reality tree (FRT), to help construct and evaluate planned interventions for resolving the core conflict and improving effectiveness. Draws conclusions relative to the feasibility and utility of using TOC TP logic tools to help managers of service organizations improve their overall system performance.
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