Market Constraint In Business Management: The Five-Step Focusing Process

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The Market constraint deals with current situations of the market and the product/service of the organization. Such constraints exist when the demand for a product or services is less than or equal to the capacity of the organization. Basically, demand exceeds the supply. Market constraints can also be an intangible factor that impacts the organization. These constraints also give rise to bullwhip and fluctuations in operations and production. Regardless of the type of constraint, the importance of constraints lies in the influence they exert on the performance of any organization. Five-Step Focusing Process The Five-Step Focusing Process is at the heart of TOC. It is a sequence of procedure which enables managers to plan and organize the overall…show more content…
The important question that managers should ask here is “are we working as efficiently as we could or is there any bottleneck”. For instance, bottleneck may be because of the lack of domain knowledge or skills or training or because of lack of capacity in a key area. To search for any one constraint out of many one can make use of various tools like flow charts, storyboarding, fish bone structures, failure modes and Effects analysis could be used to map out processes and identify what is the root cause of the issues. As explained earlier constraints may not just be physical. They can also include intangible factors such as ineffective communication, restrictive company policies, or even poor team morale. According to the theory, a system can only have one constraint at a time which might not be possible always. Therefore, manager needs to understand and then decide which factor is the weakest link and to focus on that. Some application tools like Pareto Analysis or Queuing Models could also be used to identify the constraint if it is difficult to decide which constraint to focus at one…show more content…
Create a plan and organize on that plan for the primary constraint that best supports the system’s goal. This calls for taking advantage of the existing capacity under the constraints, which is often wasted by making and selling the wrong products. Most of the time use of improper policies and procedures for scheduling and controlling give rise to bottlenecks. In this step, the aim is to make the most of what we have that is to maximize throughput of the constraint using resources that are available to us. The line between exploiting the constraint which is this step and elevating the constraint which is the fourth steps is interdependent. This step focuses on immediate wins and quick relief leaving out more complex and substantive changes for future

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