Isn't It Obvious?
That is the missing element—the plus in not changing.”
I should have paid more attention to the fact that judging a suggested change has not one, not two, but four, very different aspects
The point is that people consider both the pluses and minuses of the change and of not changing, and weigh the risks involved in each of the four elements involved in the change.
if you had started this conversation by announcing a bonus plan for our vendors, I would have thought you were out of your mind. But now that you have shown me the cause and effect links which led you to this understanding, I must say it’s quite ingenious.”
Chapter 26 - The 5 Focusing Steps for Retail
Due to the production plant setting in “The Goal”, many TOC followers still equate a constraint with a bottleneck—a resource that’s capacity is the limiting factor of the system’s ability to generate more throughput. This erroneous perception blocks the proper identification of the constraint in most non-production environments.
Step 1 - Identify the system’s constraint
The constraint of retail is: the number of people that enter the shop.
Step 2- Decide how to exploit the system’s constraint
retail is almost blind to the dominant factor that demolishes all other efforts to improve exploitation of the constraint; retail is blind to the magnitude and impact of shortages
they are also not fully aware of the devastating impact that surpluses have on proper exploitation—on the indirect impact surpluses have due to cash and space being restricted
Step 3 - Subordinate everything else to the above decisions
the overwhelming desire to save cost in purchasing and in transportation leads to large batches that cause ten times bigger damages to throughput downstream
Step 4 - Elevate the system’s constraint
Reducing shortages increases customer satisfaction and considerably decreases customers’ dissatisfaction. Reducing surpluses enables much better display and a jump in product portfolio. The much faster replenishment enables adjusting the product mix to the actual taste of the local clientele
Step 5 - Warning! If in the previous steps a constraint has been broken go back to step 1.
This is the most difficult step for production-based environments.
This complexity does not exist for retail-based environments
This makes retail into one of the safest and easiest environments for major improvements in performance.