Tom Foster of ManagementBlog.org interviewed me about Goldratt’s Theory of Constraints. Here is the fourth installment:
— Start interview
TF: If the idea is to strategically select your bottleneck (constraint), what are the characteristics you look for in a strategic constraint?
Dr. Lisa: A strategic constraint should be relatively hard to get more of, compared to a non-constraint. Hard to get more of, means that it’s expensive, hard to find, hard to train or something like that.
Non-constraints, on the other hand, are generally less expensive and easier to get. And a starting rule of thumb is to have 25% excess capacity at your non-constraints.
So we are leveraging our very expensive hard to get resource (constraint) and we have excess capacity at our easier to acquire (non-constraint) resources.
…to be continued.
Here’s to maximizing YOUR profits!
By Dr Lisa Lang
© Science of Business, Inc