This is from the blog at Crowdspring and is a GREAT summary of one of my favourite books about business “The Goal” by Ellyahu Goldratt.  Visit http://www.crowdspring.com

In his book “The Goal,” Eliyahu Goldratt tells the story of a Boy Scout troop out for a hike. The goal of the hike is to cover 10 miles in 5 hours, in other words to keep the troop moving at an average speed of 2 miles per hour. As the troop works its way up the trail, gaps begin to appear between the scouts, and the slower hikers find that periodically they must go double-time to shrink the gaps. The scout leader observes how the gaps between the kids are magnified the further down the line he looks, and it becomes clear that the fluctuations in each individual hiker’s pace are impacting those behind. As the hike proceeds, the process gets less efficient, because the hikers must expend more energy to close the gaps, and by the time the group reaches the half way mark, they have fallen behind by almost 2 hours.

One scout, Herbie, is the slowest of the hikers and so his speed governs that of the entire group. Putting Herbie at the end of the line does nothing to speed the group’s overall progress, but instead further limits the group’s speed by effectively reducing the pace for everyone. It is only after the scout leader comes to a key realization, that he finds the way to improve the overall speed of the troop. The insight? If the efficiency of an entire process is governed by it’s most inefficient operation (Herbie), then, to reduce the fluctuations (along with the extra “energy” expended), change the order of operations by putting that one before the others. Next, improve that least efficient operation (Herbie) to increase the overall speed of the entire process.

So what does the scout leader do with this new realization? First he moves Herbie to the front of the pack. This has the effect of removing much of the variation in each hiker’s speed (eliminating the gaps between the hikers) and with the fluctuation reduced, the hikers don’t have to struggle so much to “catch up” when they fall behind, nor must they expend as much energy as they perform their individual roles. Next, the troop leader decides that he needs to find a way to help Herbie speed up, and by doing that, speed up the entire hike. How? He asks Herbie for his backpack, empties it and divides all of the heavy equipment between the other (faster and stronger) hikers. By lightening his load the scout leader has given Herbie the ability to walk faster. The result? Herbie is still the slowest hiker, but he is faster than he was before and so then is the rest of the troop. Bingo!

Goldratt’s metaphor is applicable to small business of all kinds, whether a restaurant trying to serve more customers faster; a factory trying to improve productivity and reduce inventory; or a web design/development firm trying to improve overall efficiency and increase capacity. Here are some specific thoughts:

1. Find the bottleneck. I wrote about this a few months ago and suggested some simple ways a business could identify bottlenecks in their own process. In the case of a factory, this could be represented by the work station where inventory tends to back up and analyzing its capacity. In any case, identifying this problem is the first step in improving the process overall.

2. Determine throughput. This is the speed at which a process performs, and is effectively governed by the bottleneck or the slowest operation (as illustrated so nicely by Herbie). There are a number of simple formulas that can help to determine this; in the case of a restaurant could it be one of the kitchen positions, that keeps the others waiting? Perhaps the fry cook doesn’t have a large enough surface to work on and can not push the orders through fast enough to keep up.

3. Explore changing the order of operations. Where does the bottleneck occur in the process? Can changing this improve the overall speed or efficiency? What if the fry cook did her work before the others and limited the wait time each of the kitchen stations experienced? Answering this question can go a long way towards improving overall efficiency.

4. Lighten “Herbie’s” load. Can the bottleneck be relieved through simplification or (in the case of an individual) by reducing responsibilities? If the speed of this operation can be improved, the overall speed of the entire process can, too. In the case of the web development firm this could be represented by a tricky part of the process or by an individual employee with too large a workload. Look at different ways to divide the work among the team, or even consider increasing or adjusting capacity with new hires.

5. Bring the entire team into the process. The scout troop agreed to have Herbie take the lead, understanding that they would all benefit from the change. It is critical to have buy-in when making changes to a process and much can be learned by everyone involved.