Theory of constraints.....
I read an article the other day about the theory of constraints - and it has stuck in my head for a while now....mainly what are my constraints and how can i improve in the broader sense of the term.
quote from Wikipedia :
Theory of constraints (TOC) is an overall management
philosophy that aims to continually achieve more of the goal of a
system. If that system is a for-profit business, then the goal becomes
one of making more money, in the present as well as in the future.
According to TOC, every profit making organization has at least one
constraint which prevents the system from achieving a higher
performance relative to its goal (Liebig's Law of the Minimum). These constraints can be broadly classified as internal resource constraint, market constraint and policy constraint. In order to manage the performance of the system, these constraints must be identified and treated carefully.
Implementing TOC
Theory of Constraints is based on the premise that the rate of
revenue generation is limited by at least one constraining process
(i.e. a bottleneck). Only by increasing throughput (production rate) at
the bottleneck process can overall throughput be increased.
The key steps in implementing an effective TOC approach are:
- Identify the constraint (bottlenecks are identified by inventory pooling before the process)
- Exploit the constraint (increase its utilisation and efficiency)
- Subordinate all other processes to the constraint process (other processes serve the bottleneck)
- Elevate the constraint (if required, permanently increase bottleneck capacity)
- Rinse and repeat (after taking action, the bottleneck may have shifted or require further attention)
The Six Necessary and Sufficient Questions relating to Technology
- What is the real power of the technology?
- What limitation does it diminish?
- What old rules helped accommodate the limitation?
- What are the new rules that should be used now?
- In light of the change in rules, what changes are required to the technology?
- How to cause the change (the new win/win business model)?
for the full dirt here is the link....
http://en.wikipedia.org/wiki/Theory_of_constraints
