TOC & Management

Today I went to Barns & Noble and dig up a book I read two years ago, The Goal. Three hours gone by and I re-read some of the most interesting chapters. Hats to Goldratt, Good books like this one is hard to come by. It is a great inspirational story with down-to-earth insights. Most importantly, it tackles on theoretical challenges of management with common sense techniques. Now let me write down some great ideas so I don’t forget:
1. All processes have bottlenecks that determines the throughput of the whole system. Regardless how efficient you can run the non-bottleneck segments, the system performance would not improve. Put it simply, 10% improvement in the efficiency of the bottleneck = 10% of improvement in the whole system. And 10% improvement in non-bottleneck = 0% improvement of the whole system.
2. A sign of problematic bottlenecks is a long queue in front of it and the idleness of non-bottlenecks. Therefore, do not blame the subordinates who are idle, their idleness is inevitable when they are not the bottleneck.
3. Always use critical thinking to challenge tradition. The goal of a business is to make money. From my own experience, managers often lose focus on this issue. For example, automating manual processes is great, but does it improve the bottom line if the manual labor savings do not translate to reductions in payroll? I can help tons of people do their job more efficiently, but that just gives them more time to be idle if they are not the bottleneck.
4. The continously improvement of efficiency can be achieved by:

  1. Identify the bottleneck.
  2. Utilize all resources possible from non-bottleneck processes to improve the throughput of the bottleneck process.
  3. Evaluate if the bottleneck problem is resolved.
  4. Go back to step 1.

Since I am writing about continuous improvements, here is the cycle for improving quality:

  1. Define the quality requirements demanded by the customer or market.
  2. Measure the performance of the core processes.
  3. Analyze the cause of quality issues and identify opportunities to improve.
  4. Improve the processes with innovative solutions.
  5. Control the change to it does not go back to the old way.

5. Managing life is not much different from managing a company.