There is a great danger in simply stating a strategy as a set of high-level objectives. For example, if the top executive team sets a strategy of becoming the most profitable company in their industry, there are many different directions the company could take to get there. They could focus on higher margin products, mass cost cutting and efficiency programs, expanding markets, or increasing market share. The possibilities of misalignment between functional areas and of making mistakes in implementing a strategy point to a need for much greater clarity and depth. TOC provides clarity through a hierarchy of linked strategies and tactics at multiple levels (see S&T example, Fig. 18-1) or through a detailed road map of cause and effect between "injections" (ideas to be implemented) and desired effects (see Future Reality Tree example, Fig. 18-2). In this chapter, I explain both approaches and the differences.

Three Goals or Necessary Conditions of Any Strategy

For any organization, a good strategy will achieve and sustain three essential effects: 1. Increase goal units (e.g., net profit, education units, health units) now and in the future.

2. Satisfy markets (customers, suppliers, community) now and in the future.

3. Provide employee security and satisfaction now and in the future.

FIGURE 18-1 The Strategy and Tactics Tree. (Used by permission of E. M. Goldratt, S&T E. M. Goldratt.) FIGURE 18-2 The Future Reality Tree Thinking Process to define strategy.

You could make any one of these your goal. As long as you consider the other two as necessary conditions, your overall strategy will be the same. This means that a strategy is incomplete if it does not encompass, explicitly, all three necessary conditions. For example, in high growth strategies, organizations often don't cover all the necessary processes to keep the organization stable in terms of customer satisfaction and employee skills and development.

The goal units typically appear at the top of a TOC strategy structure. While it's up to an organization's owners or key stakeholders to set their goal, TOC embeds a higher goal-a Process of Ongoing Improvement (commonly referred to as POOGI in TOC)-into its methodology. The assumption is that every organization has a constraint, always, and therefore can continually improve. With POOGI imbedded into a strategy, improvements are sustainable year after year.

However, even with a well-defined goal, organizations, using traditional processes, often don't achieve it.1 TOC would suggest either that such organizations focused on the wrong initiative (a non-constraint) or that management attention was constantly diverted away from the right leverage point. One current belief is that the biggest constraint to improving any organization is management attention. TOC is not perfect, but the literature and research shows a higher success rate. In my opinion, this is not by accident, but by the power of a TOC approach called the Five Focusing Steps (5FS), which holds management attention in the area needed to deliver quantum results.

The Five Focusing Steps

TOC strategy finds and capitalizes on inherent simplicity in any organization by using a process called 5FS (Goldratt, 1990, Chapter 1). These steps are: 1. Identify the system's constraint.

2. Decide how to exploit the system's constraint.

3. Subordinate everything else to those decisions.

4. Elevate the constraint.

5. Go back to Step 1. Warning: Don't let inertia become your system's constraint.

For organizations that fit an S&T template (see examples in the next section from several predefined, generic solutions to common problems), the 5FS have already been applied and are reflected in the S&T. Otherwise, the organization defines its strategy and tactics by answering the implicit questions in the 5FS. If the people defining the strategy are stuck in how to apply one of the 5FSs, one or more of the TOC Thinking Processes (TP) can be used to derive an answer.2 The following example illustrates the 5FS. You will find the description of generic S&T strategies later in this chapter and in Chapters 25 and 34.

Example-The Five Focusing Steps

A retailer wants to increase sales and profits. In applying the first step, identify, the retailer looks for a physical representation of the constraint. Within a distribution system, there are several physical attributes-for example, the physical display space (shelf space) in a retail store, the capacity of trucks that make deliveries, or the number of parking spaces available to customers. In most retail environments, TOC finds the biggest leverage point (physical constraint) represented by the customers who come to buy the products.

Since the word exploit, in English, can have a very negative connotation (i.e., one person taking advantage of another person in a very negative way), you can substitute the words "Get more out of." Often, when a constraint is identified, upon closer examination there is significant waste of the constraint. In distribution, one of the biggest wastes is attracting customers to a store and not having the product they desire in stock when they arrive. This is the opposite of exploit. Simultaneously, there is another huge waste-having too much inventory in some locations. The waste is not just in carrying costs of the inventory. More often, the bigger waste lies in the efforts that go into getting rid of such inventory, which in today's world can quickly become obsolete, and in the waste of prime retail space occupied by slow moving items. In order to exploit the constraint in the retail system, TOC advocates moving from a push system (where high quantities of goods are pushed from the manufacturer to a distributor and from the distributor to a retailer through policies rewarding buying high quantities in a single shipment) to a pull system (where you replenish more frequently exactly what was consumed, and modify inventory target levels dynamically and automatically according to significant changes in demand).

The subordinate step defines the actions and policies required by everyone in the system in order to support the decisions made in the exploit step. The most successful implementation of TOC subordination in distribution that I witnessed required store managers to stop deciding on what to order and instead concentrate on training their retail staff in serving their customers (see Fig. 18-3 for actual results from this S&T tree). By subordinating everyone to the TOC pull system ordering decisions, sales doubled within 3 months with the same level of inventory and, at the same time, shortages were cut in half. Another way to decide to exploit is to replenish more frequently to drive down shortages, allowing the retailer to carry a greater variety of items-the more frequent the replenishment, the smaller the quantity of individual items needed to meet a given customer service level.

FIGURE 18-3 TOC Five Focusing Steps in retail-results in 3 months.

Elevate means increasing the capacity of a constraint. Most retailers must choose to carry a very small percentage of all the products available to them, due to physical space limitations. This implies that customers will come to buy a product and a specific retailer will often not have the product they want. For example, the distributor I worked with had 200,000 items available to sell across Europe, but their typical retail store only carried, at most, 2000 items (with variations of the same item by color and size). To elevate the constraint, you might carry out extensive advertising, expand the physical capacity of the store, or increase shelf space to increase the number of items carried in order to drive more sales.

It's important to note the sequence implied by using the strategy of the 5FS. Before the elevate step, which often involves investing money, the sequence of the steps makes sure that you first at least try to squeeze more out of what you already have.

When the constraint changes, the last of the 5FS asks you to go back to Step 1-identify the new constraint. Ideally, since there is so much work in progressing through the 5FS, a constraint should seldom change. At least, you should be able to anticipate a change and prepare for it so that your markets are not impacted. However, in my experience, the western world paradigm of the past 20 years of ordering items in large quantities from overseas has caused the retail constraint to move frequently and unexpectedly to other parts of the supply chain. The customers came to buy, but could not get the item they wanted because the retailer could not get replenishment from their supplier. This was not a temporary shortage until the next arrival of a truck to the store, but a more permanent out-of-stock situation in country distribution centers. Through ordering much more than was necessary to satisfy short-term demand, the western world put their overseas manufacturers into a situation of being weeks or months away from replenishing the western world supply chain. The TOC strategic solution is to order much smaller initial quantities and replenish more frequently. The increased shipping costs and potential increases in product costs are usually offset by a factor of several times by the value of increased sales and reduced obsolescence.

The Role of Throughput Accounting and Other Metrics in Strategy

One of the deficiencies I have observed in many strategies is the absence of a tight link to measurable results. Scorekeeping, combined with well thought out actions to impact the score in the short term, are frequently missing from the outset of launching the implementation of a strategy. The TOC method of holistic scorekeeping called Throughput Accounting (TA), described in Chapters 13 and 14 of the Handbook, can be used to address this deficiency.

It is vital for the executive team, managers, and employees of a company to be energized by results. While I don't discount the value of intangible results, such as feelings of satisfaction and trust, perceptions are often different in the intangibles, depending on where you sit in an organization. However, I find that most people view the TOC tangible scorekeeping as more believable because it removes the distortions and subjectivity of cost accounting allocations.

TOC TA recognizes improvement in terms of the impact on Throughput, Investment, and Operating Expense (OE), or derivatives of these (such as net profit). These impacts often lag the effort by weeks or sometimes months. Therefore, leading indicators are also used. Some examples of leading indicators relative to net profit, used effectively in TOC strategy, are: Manufacturing-DDP percentage, buffer penetration in red zone percentage Projects-number of late projects, priorities driven by red tasks, buffer recovery trend Distribution/Retail-shortages percentage, average inventory turns, sales per square meter or foot of shelf space Sales for any organization-average sales cycle duration, hit ratio on prospecting Health care hospital emergency room-patients discharged in 4 hours or less percentage Quality-rework daily or weekly OE percentage of sales

Overview of TOC Strategy Applications in Manufacturing, Projects, and Consumer Goods Distribution/Retail Organizations

Introduction to Strategy Applications

If you want to see the result of 25 years of TOC development in strategy and tactics in a single document, this information is now available in the public domain at no charge. Check out the viewer provided by Harmony software that comes with generic Strategy and Tactic Trees (S&T Trees) 3 for manufacturing, projects, and distribution/retail of consumer goods: http://goldrattresearchlabs.com/?q=node/2 Since the details of these S&Ts are provided in the above forum, this part of the chapter will serve as a roadmap to these strategies.

What information should be contained in a strategy description?

1. There must be enough detail so that anyone, at any level and function in the company, can understand what they must do in order to meet the company goals. This has major implications for anyone tasked with creating a strategy for an organization. Simply listing objectives and actions or injections is only a start to providing the clarity of direction for all levels and functions.

2. There should be an answer to the question, "Why is this result necessary to achieve the goal or the next higher level strategy?" In this knowledge worker age, most people don't want to be told what to do. Their commitment requires them to understand why they need to do it.

3. The strategy should spell out what components will be sufficient to achieve the desired intermediate results and the overall goal. By forcing ourselves to try to understand the full context of what is required to achieve a major goal, we often discover missing pieces a priori. This alone can significantly speed up an improvement process and prevent painful mistakes. Consider an example where a manufacturer improves internal operations to a point of increasing capacity by 30 percent, and the lead time to increase sales to take advantage of the extra capacity is 6 months. A strategy that plans for the sales lead time will achieve results months earlier than one that is insufficient in the sales portion.

Generic Content of S&T Structures

Before a brief tour of three generic strategies for manufacturing, consumer goods distribution, and projects, it's helpful to understand the format of every S&T. An S&T consists of a structure (see Manufacturing S&T example in Fig. 18-4) and corresponding text containing strategy, tactics, and assumptions (see corresponding text for box 1 [upper left-hand corner of table provides table position in tree] of the Manufacturing S&T example in Table18-1). In the Harmony S&T viewer,4 double clicking on a box brings up the corresponding details. By double clicking on box 1 of the manufacturing S&T, labeled Viable Vision (VV), you would see the format shown in Table 18-1. Clicking on a "+" symbol in the Harmony software opens up the structure to lower levels.

FIGURE 18.4 Manufacturing S & T Structure to three levels. (Used by permission of E. M. Goldratt 2008. Manufacturing S&T E. M. Goldratt.) The structure is hierarchical. Each lower level in the diagram contains strategies and tactics necessary to achieve strategies represented in the higher level. Ideally, implementing the tactics at the lowest level is sufficient to achieve the strategy at the next level. For example, when the tactics in all boxes below level 2.1 (i.e., 3.1.1, 3.1.2, 3.1.3, 3.1.4, and 3.1.5; use Harmony S&T Viewer to view these tables) have been successfully implemented, the S&T in higher level 2.1 should be achieved.

In every S&T, the strategy is shown in the box labeled Strategy as illustrated in Table 18-1. The concept of the VV goal was originated by Dr. Eli Goldratt and first verbalized as turning top line (revenues) to bottom line (net profit) in 4 years or less. Currently, the VV goal is more often expressed as achieving a level of measurable performance beyond what the management team is targeting. For example, one VV company is a $400 million company targeting to reach more than $500 million in two years. That is a stretch for them because they have been on a path of declining revenues for a long time. Just to grow again requires a major change in their thinking and in strategy and tactics.

TABLE 18-1 Manufacturing S&T Strategy for 1- Reliability Competitive Edge In a VV S&T Tree, the strategy strives to keep the constraint usually in the market. Internal capacity is managed to be a step ahead of the market. This is accomplished through a combination of a TOC logistics solution and processes to manage capacity. For example, in the manufacturing S&T Tree, the scheduling and execution logistics called Simplified Drum-Buffer-Rope 5(S-DBR)6 (see Chapter 9) is used in combination with additional steps for controlling promises to the markets when internal constraints emerge. The S&T Tree also includes steps to elevate capacity proactively in a more timely way.

Parallel assumptions shown in Table 18-1 provide insight into why the tactics make sense as a means to achieve the strategy. The assumptions may indicate facts or warnings you must take into account in coming up with tactics or facts that will make it possible or easier to achieve the strategy. Since VV goals in this strategy imply fast growth in net profit, the parallel assumptions in box 1 contain two warnings: First Parallel Assumption warning-Don't try to achieve this vision by cost savings. It must be done by growing Throughput continuously.

Second Parallel Assumption warning-If you don't get results quickly, you will exhaust one of your most precious resources-the top management team. Do that and you have a high likelihood of killing the entire strategic effort.

Tactics explain how to achieve the strategy. At this high level in the S&T tree, the statements are very general conditions that must be implemented, much as you might find expressed in "Injections" in a Future Reality Tree (FRT; part of the TOC TP). At lower levels in the tree, the tactics represent actions that individuals or small teams will take, much as you might find in a TOC Transition Tree (TRT). In the one tactics statement shown in Table 18-1, which is generic for many S&Ts, the organization is told to implement five components: 1. Build a decisive competitive edge-How? The answer is detailed at lower levels. What is a decisive competitive edge? It's a capability that the market needs to get a significant result. It's so powerful that the company will be able to choose its customers instead of its customers choosing them. The company will be able to grow its business at will. In the Manufacturing S&T strategy, for example, the decisive competitive edge is reliability, as represented by sustained, consistent DDP that is much higher than the industry average. In 3.1.1 (not shown here, use Harmony S&T Viewer), the S&T calls for using S-DBR to achieve the reliability strategy.

The tree goes on to explain in level 2.1 (see Table 18-2) that such an edge only applies to markets where suppliers are very unreliable combined with the condition that the customers experience significant damage from the unreliability. This is a new type of assumption, called a "necessary assumption," found in every box below the first level, which explains why the strategy is necessary or why the strategy takes a given direction.

2. And the capabilities to capitalize on it-These are the sales and marketing capabilities. Some of the greatest advances in TOC thinking over the past five years have been in implementing sales practices, lead generation, and processes to increase sales success. The processes define target marketing, selecting "business deal" salespeople, understanding the real benefits of reliability to a customer, creating the offer material, preparing sales people, test launching the offer, defining the sales process steps, fully rolling out the offer with all sales people, monitoring the sales process to continually improve and prevent prospects from being lost, and generating leads so that salespeople can focus on selling. You can use the S&T viewer referenced above to view marketing and sales slides and levels below to understand these components of the sales and marketing capabilities better.

TABLE 18-2 Manufacturing S & T for 2.1 Reliability Competitive Edge 3. On big enough markets-When a company's market share is high (e.g., 50 percent or greater) or the target market is too small (e.g., only a handful of prospects exist that meet the market criteria), the chance of reaching an aggressive strategic goal is greatly diminished. The entire S&T is designed to work with much higher odds than those found in Las Vegas.

4. Without exhausting the company's resources-Especially without exhausting the top management team. If management attention is truly the constraint of achieving an aggressive strategy, the way to protect it is with quick results. The lowest level boxes of an S&T should get significant results within the first 2 to 3 months of effort. Significant means measurable increases in Throughput or net profit or in the parameters, such as DDP, which are needed to affect the bottom line.

5. And without taking real risks-In this S&T Tree, the lower levels recognize that one of the biggest risks is the risk of success-huge success. Imagine what would happen if you acquire many new clients based on reliability and cannot cope, operationally, with the success. Instead of DDP being sustained to meet customer promises, suddenly the entire system is stretched beyond its limits, reliability collapses or lead times are extended indefinitely, and damaged customers are lost permanently. Such consequences are avoided through processes outlined in lower levels where risks such as internal capacity constraints are identified and monitored. In addition, the S&T Tree includes a capacity elevation proactive process (see S&T section 3.1.5 [use the Harmony S&T Viewer] and below this level for details) to increase capacity more quickly when needed. The tree also contains sales processes to control development and release of prospects to avoid the risk of losing prospects due to lack of attention.

Each of the specific applications below is summarized from S&T designed to achieve a decisive competitive edge.

Manufacturing

Figure 18-4 shows the first three levels of the Manufacturing S&T Tree. Table 18-1 shows the words behind box 1. In this S&T tree for make-to-order (MTO) manufacturers, called Reliable Rapid Response or triple R, the strategy is first to achieve a level of reliability unmatched in the industry, as expressed in DDP. In the 1990s, with ample evidence of the ability to improve manufacturing flow quickly through the application of TOC's logistics solution called Drum-Buffer-Rope (DBR; see Chapters 8 and 9), the constraint often moved to the market-the manufacturing company was challenged to find enough customers to take advantage of the added capacity quickly enough to avoid pressure to lay off shop floor people. Dr. Goldratt introduced the concept of a "Mafia Offer"-an offer to the market that was too good to refuse.

One of the great examples of a manufacturer-constructed "Mafia Offer" presented at two TOC conferences was California's Orman Grubb furniture company. Jeff Grubb dramatically increased sales of home office and entertainment furniture by making his "Mafia Offer" to his retail customers. His offer was to replenish, bi-weekly, any items of furniture bought in individual stores without penalties for freight or penalties for ordering small quantities. In the 1990s, where other manufacturers were forcing retailers to order large quantities per shipment, the offer was well received. The retailers saw that their most popular items would be replenished quickly and that they would not be stuck for months with less popular items. However, by April 2004, overseas manufacturers offered such a huge difference in price that Grubb's offer was no longer sufficient to compete. The company filed Chapter 11 bankruptcy.7 Scientists embrace failure as an opportunity to learn, and Orman Grubb teaches a valuable lesson in strategy. The current versions of the S&Ts recognize that an offer to the market is only valid as long as all other factors (price, quality, etc.) remain the same (see Table 18-2, strategy statement). Either an offer must create sufficient value to overcome price differences or the company must diligently ensure that their strategy contains pieces to keep other factors the same. Every word in an S&T counts-the words come from vast worldwide experience in implementing solutions.

The Manufacturing S&T has two major branches-2.1 (see Table 18-2), representing the reliability competitive edge and 2.2 (see Fig. 18-4), representing the rapid response competitive edge. The S&T are generally implemented in a left-to-right sequence. In Branch 3.1.1, all of the basic processes are implemented to achieve an unheard of level of DDP, which is the assumed reliability needed to surpass competitors. Of course, this necessary assumption is not true for every manufacturer in the world. It's true if the manufacturer has large enough target markets of customers suffering from unreliability of significant competitors of the manufacturer. When this has been implemented, we proceed to Reliability Selling as indicated in 3.1.2. (not shown here, use the Harmony S&T Viewer) When constructing such a strategy, it's hoped that the manufacturer can fully achieve their strategic goals using only the left branch of the tree-2.1 and those entities underneath. The right side beginning with the elements in 2.2 (not shown here, use Harmony S&T Viewer) can be called the bonus or the gravy for achieving or surpassing the strategy. In this tree, the left side proves that the company has the discipline and execution skills to achieve a target that few, if any, in their industry have achieved. The processes, including capacity elevation, marketing, and sales, are stable and provide a base to execute on the right side.

On the right side, using the TOC POOGI process for S-DBR (see Chapter 9) and Buffer Management (BM), production lead time is further reduced so that without taking special actions in manufacturing, the company is capable of filling custom orders in much shorter quoted lead times to customers. However, the shorter lead times are provided at a high premium to customers where they don't have ready reliable alternatives and where the potential damage to them from regular lead times is so high, the premium for the rapid response pales in comparison.

One example is a high precision machine shop that was asked to provide a part for a multi-million dollar aircraft in one quarter of the typical lead time. The customer was happy to pay $800 for the part that was regularly $200 because it meant they could ship the aircraft to their customer in 2 weeks instead of 8 weeks. Note that there is no significant change in the manufacturer's operating expense, typically. The manufacturer is doing exactly the same work, for a lot more money.

The implication of rapid response to the manufacturer's bottom line is momentous. In Table 18-3, the example shows the difference between having regular sales at regular price, and having a rapid response offer that is taken up on 10 percent of the sales value, at a 50 percent premium of the regular price (on average). While total sales only grew 5 percent or $50,000 increase on $1,000,000 ($100,000 worth of regular sales were billed at a premium of $150,000), Throughput grew by 10 percent and net profit grew by 50 percent.

TABLE 18-3 Effect of Rapid Response on Bottom Line From experience, the greatest challenge with rapid response offers to the market is not in operations. With the processes already established in implementing the left-hand side of the S&T, my experience is that operations needs little time to do the additional improvements required to accelerate production lead time. The real challenge is in sales and sometimes in management, where the common belief is that no customer would ever pay more for the same product or service. Some inside the company believe that such charges are gouging a customer. Therefore, it's important to understand why this is not gouging and how to present it to the customer in a way that the customer perceives it positively, not negatively.

The correct strategy to roll out a rapid response program with positive customer perception is to test it in advance, qualify customer needs in terms of the potential quantifiable benefits of rapid response, and notify customers in advance of their potential needs. The customer must feel as if they have a choice and are not being blackmailed into paying more than necessary when they get into a bind. If a long-term customer of a manufacturer calls at the last minute and says, "Our forecast was wrong and I need another 100 parts in a hurry," and the manufacturer, without pre-notification, says, "I'll be happy to provide those parts in a quarter of the lead time for four times the price," they should expect a violently negative customer response.

If the customer is given the choice at the time original prices are quoted, customers are typically receptive to paying a premium if they have an emergency and they need the product. I would not believe this myself unless I had personally witnessed its success with a variety of companies. We have now taken several pages to discuss partially just a few of the slides in the S&T. This should convey a perspective of the depth of thinking contained within the tree. For further details, download the free S&T viewer and review the slides in detail, level by level, at least 10 times. From experience, each time you review, you will recognize new statements that you will swear were not in the S&T tree the last time!8

Projects

Once again, the S&T viewer described previously provides a full view of the entire project S&T and the TOC project paradigm called Critical Chain Project Management (CCPM). This S&T tree is intended for project companies (companies that earn the bulk of their revenues from executing projects for customers). In addition, every organization can use the majority of S&T outlined in 3.1.1 (view with S&T viewer) and below to improve their ability to execute change through projects more quickly.

The underlying TOC strategic thinking about projects is that almost all projects are conceived to bring some benefit to an organization.9 Every organization must execute multiple projects every year to survive and, we hope, improve. In most cases, the faster the projects are completed, the sooner the organization realizes the benefits. The faster the execution (flow of a project), the sooner the resources can be released and therefore the greater the number of projects an organization can complete with the same resources.

As we begin a journey to improve strategically how we execute projects, we first do Step 1 of the 5FS-Identify the System's Constraint. As hinted at previously, the biggest leverage point must be related to increasing project flow-the velocity at which projects are completed. The physical representation of a project is in the tasks needed to complete it. However, not all tasks equally determine the duration of a project. In defining which tasks are most likely to determine duration, TOC defines the tasks that are dependent on each other to complete. TOC recognizes two types of dependencies-logical dependencies (e.g., the carpet installer will not install the carpets until the drywall is up and the rooms are painted) and resource dependencies (the carpet installer will not install the downstairs carpets until they're finished installing the upstairs carpet-the same resource is doing both tasks).

To summarize, the longest chain of dependent events in a project, considering both task and resource dependencies, is the Critical Chain. There is a huge problem with this definition of the physical constraint of a project. Some of the resources that are needed by a project in order for the project to progress are not modeled in project plans. In fact, projects always seem to progress at a rate that is much slower than the "touch time" or addition of the estimated task times for the critical chain. This revelation leads to two possible strategic assumptions we can use to exploit and subordinate: 1. The constraint is really management/support group attention. That is, the biggest gaps in project execution times are reflected in non-modeled resources, whose time and attention are not visible in any project plan. In this case, the fewer the number of active projects (to a point), the more attention that management and support groups can give to the active projects. This will result in fewer gaps in project progress, and gaps will be of shorter durations, thus accelerating the project completion. The POOGI process focuses on a Pareto analysis of what project tasks are waiting for, and focuses on constantly improving the project planning and execution processes in a way that reduces project durations.

2. A different strategic assumption is that the biggest constraint is still caused by behaviors and capacity of one project resource group or skill set. Still, if we reduce the number of active projects so that this resource group can concentrate on a smaller number of projects, their work will progress faster, they will receive better support from other groups, and everything completes faster. The potential danger in this direction for a solution is that the organization assumes that by elevating this resource pool by adding more resources, this will increase the capacity of the organization to do more projects. If the real constraint is caused by lacking management or support group attention, then increasing the number of active projects without increasing management or support capacity will actually decrease project flow of all projects.

FIGURE 18.5 Projects S&T partial structure to four levels. (Used by permission of E. M. Goldratt 2008. Projects S&T E. M. Goldratt.) No matter which direction for a solution is chosen, the correct first step in deciding to exploit the constraint is to reduce the amount of active project work in progress (WIP). Therefore, you can see in Fig. 18-5, in order to achieve "Meeting Promises" shown in box 3.1.1, the first step shown below this box, 4.11.1, is "Reducing Bad Multitasking." This slide is shown in Table 18-4.