Theory of Constraints
A small number of constraints prevents any management system from achieving more of its goals
- Have a focusing process to identify constraint; then restructure to address.
- Fundamental assumption: Throughput accounting can measure success for organization
- Throughput: Rate at which goals are achieved
- Operational Expense: Money spent achieving goals
- Investment/Inventory: Money invested in system
- Focus Process Loop
- Identify constraint
- Decide how to exploit it
- Seeing constraints as opportunity not a problem.
- Subordinate everything to the above decision
- Make sure all parts of the system are tuned to support the constraint
- (Most important yet hardest step)
- Alleviate the constraint
- Thinking process
- What needs changing?
- How should it change?
- What action will change it?