Applying the TOC five‐step focusing process in the service sector: A banking subsystem

Abstract

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.

Citation

Reid, R.A. (2007), "Applying the TOC five‐step focusing process in the service sector: A banking subsystem", Managing Service Quality: An International Journal, Vol. 17 No. 2, pp. 209-234. https://doi.org/10.1108/09604520710735209