Strategy is the Ongoing Alignment of Two Basic Meta-Processes
The objective of any organization is to implement an effective and lasting process of ongoing improvement. Unfortunately, after the initial thrust most improvement efforts stagnate. An effective long term strategy ensures that the rate of improvement continues to grow over time. Application of constraints thinking can also be applied to strategy through the two basic meta-process common to most organizations:
Demand Fulfillment
Success in this arena is reflected in internal performance that drives high levels of customer service through reliable product (or service) availability. This requires secure logistical capability and operational excellence, with links of the supply chain, such as operations, distribution, and engineering managed in a way that satisfies the needs of the market.
Demand Creation
If you are going to maintain a logistical infrastucture, you need smoewhere to send its outputs. Demand creation focuses on what is required to grow markets and attract customers. Development of and effective customer acquisition process results in the ability of the orgainization to transform itself from order taker to order maker. This is done by leveraging logistical/operational capabilities through identifying desirable markets and structuring “unrefusable offerings” to those markets.
A strategy for sustainable success involves managing the interactions between these two processes. The idea of the constraint provides a way of aligning today's actions that must be taken at a local level with the long term goals of the (global) organization. Managing the location and nature of the constraint in these processes and our responses to them is key to effective strategy.
The animated gif presentation found below describes how such a constraint-based long-term strategy would be expected to work. By efectively executing the actions described in the yellow boxes, the desired effects in the white boxes reflect the expected results.
(If you are viewing this page on a laptop or on a small monitor, you may wish to set your browser view to "full screen" mode in order to appreciate the animation found below. The long view that it illustrates is further discussed here.)
