We can not view the links that form an enterprise as isolated. To look upon the enterprise as a collection of isolated links promotes the concept of local optimization. Optimizing a component in isolation does not transfer that optimization completely as an additive contribution to the enterprise. In fact, if the local optimization is counter to the overall performance of the enterprise, then the contribution may be very negative. Local optimization promotes the individual performance of an isolated link, a department or function, without consideration of the cause and effect relationships that connect and govern the results of the enterprise as a whole.

Enterprises, which have spent large amounts of resources and time in optimizing isolated functions, are often disappointed at their overall lack of achievement of primary business objectives. A Company, which has developed "world class" warehousing and distribution capabilities and yet not seen significant or sustained growth in sales and market share, might well ask "Why". The answer may well be the fact that the real constraint to their achieving their goal lies outside the "four walls" of this function. A global perspective is required.

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