by Dr Lisa | POOGI Series, Theory of Constraints Measures
“Incentives Work, Don’t They?” Dr. Lisa: “Brad, ever since I’ve known you, you have been interested in the effectiveness of incentives. You have a strong opinion on incentives. Tell me why.” Brad: “It started when I bought my label printing business back in 1991. I...
by Dr Lisa | POOGI Series, Theory of Constraints Finance, Accounting, and Cash Flow
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). ·...
by Dr Lisa | POOGI Series, Theory of Constraints Finance, Accounting, and Cash Flow, Theory of Constraints Measures
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...
by Dr Lisa | POOGI Series, Theory of Constraints Finance, Accounting, and Cash Flow, Theory of Constraints Measures
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....
by Dr Lisa | Theory of Constraints Sales
Q4 Dr Lisa: We find that incentives or bonus programs only useful in a small number of cases. Are management incentives or bonus compensations schemes ever appropriate in your opinion? Tom: I hear managers, especially in the sales arena decry that their best...
