The subtitle of The Goal is “A process of ongoing improvement”. Over the last 25 years, Dr. Goldratt has further developed the Theory of Constraints (TOC) as a holistic process to quickly and substantially improve business results. It is very compatible with Lean and Six Sigma, the two other widely known business improvement processes, where TOC is used to determine where to focus Lean (reduce waste) and Six Sigma (reduce variation) tools.
So why is TOC not more well-known and practiced if The Goal is so well read and results from implementing its methods are so effective? And why are Lean and Six Sigma much more popular business improvement processes? This is a hot topic amongst TOC experts, and probably has to do with the fact that TOC challenges most conventional practices.
For example, TOC contends that Cost Accounting is invalid. Are you prepared to consider for even a moment that the concepts of Economic Order Quantity (EOQ) and set-up cost are incorrect? And if you are, are you prepared to learn the concepts of the alternative, Throughput Accounting? For the few people that are willing to, the rewards are enormous, but most people will resist that change.
…to be continued.
Here’s to maximizing YOUR profits!
Dr Lisa Lang