Up to this point, we have discussed how Drum-Buffer-Rope scheduling has the potential to double your capacity with little or no investment or expense. And Throughput Accounting has provided you visibility on the rate at which you make money.
Both of these “technologies” are part of the Theory of Constraints (TOC), a holistic business process improvement body of knowledge developed by Dr. Goldratt, author of The Goal. TOC is especially effective in job shops. In fact, The Goal was about a turnaround of a job shop.
However, if you can’t sell more with your newly available capacity, there won’t be a bottom-line effect. And we find cutting the people—to save a little cost—who collaborated to increase the productivity of your organization unconscionable. It is management’s responsibility to have the marketing and sales processes in place to increase sales, utilize the capacity, and dramatically improve the bottom-line.
Unfortunately, the marketing and sales processes of most organizations are already getting the results they are designed to get. To get more, something has to change.
…to be continued.
Here’s to maximizing YOUR profits!
Dr Lisa Lang
Also check out our FREE Theory of Constraints videos. New videos added weekly! https://www.scienceofbusiness.com/free-stuff/free-videos-audios/
About the co-authors:
“Dr. Lisa” Lang is President of the Science of Business. Her TOC speech “Maximizing Profitability” is popular with Vistage/TEC groups and as a keynote speech. Recently Dr. Goldratt’s Global Marketing Director, she offers the “Mafia Offer Boot Camp” for companies wanting to develop and implement their own Mafia Offer.
Brad Stillahn is a business owner that has successfully implemented TOC methods in his own business and is now helping other business owners do the same. His consulting company, TOC Professionals, is a new NTMA member. TOC Professionals works with companies implementing all aspects of TOC.