If we can compute the impact of any action using T, I, and OE, which are global measures (and part of Throughput Accounting), then we can compute the bottom line financial impact quite easily: · Throughput minus Operating Expense equals Net Profit (T-OE=NP). ·...
To make managing a complex organization easier, we break organizations into pieces. Many of the current measurements have the purpose of measuring local performance, under the erroneous assumption that the overall performance of the organization will be maximized if...
Reliability To increase our reliablity, we need things to NOT go wrong. Dr. Goldratt proposed that there are just two categories of things that can go wrong - unreliability and ineffectiveness. These two things account for everything, and have no overlap....
Measurements (Not Incentives) “Tell me how you measure me, and I will tell you how I will behave. If you measure me in an illogical way…do not complain about illogical behavior”. This quote by Dr. Eli Goldratt, the father of the Theory of Constraints (TOC), speaks...
How will we know if we have a good solution before we try to implement it? As business leaders, we’re smart people and fancy ourselves as problem-solvers. So, not only do we skip the step of developing a deep understanding of the problem, we jump to our favorite...
What is the problem? Answering that is extremely important. Without know the problem, how do you know where to focus or what to improve? Is it: Declining sales? Unrealistic expectations for increased productivity? No profit incentive payout? Low morale? The new...
The buy-in Process 1. Agree on the problem(s) 2. Agree on the direction of the solution 3. Agree that the solution solves the problem and brings the benefits 4. Agree on predicted negative side effects and prevent them 5. Agree on implementation obstacles and...
Whether you’re selling stuff or just trying to get the collaboration of other people, you need buy-in. Do you follow a buy-in process? As W. Edward Deming, father of the Quality Management revolution said, “If you can't describe what you are doing as a process, you...
There is probably at least one step in your sales funnel that is more expensive or uses more highly trained personnel. If so, that step can be managed just like a production constraint. It should not be wasted. In fact, it can become the control point for managing...
To describe sales as a process, we must define the steps of the process. Of course, these may vary somewhat between industries and companies, and may be described in more or less detail. One such list of steps for a sales process is: Often not considered are the...
