Theory of constraints
That means that organizations and processes are vulnerable because the weakest person or part can always damage or break them, or at least adversely affect the outcome.The publications of Wolfgang Mewes are marketed through the FAZ Verlag, publishing house of the German newspaper Frankfurter Allgemeine Zeitung.Whether it is the goal or a necessary condition, understanding how to make sound financial decisions based on throughput, inventory, and operating expense is a critical requirement.The five focusing steps aim to ensure ongoing improvement efforts are centered on the organization's constraint(s).The constraint is the limiting factor that is preventing the organization from getting more throughput (typically, revenue through sales) even when nothing goes wrong.Creating this kind of visibility enables the system as a whole to align and thus subordinate to the need of the constraint in a holistic manner.The focusing steps, this process of ongoing improvement, have been applied to manufacturing, project management, supply chain/distribution generated specific solutions.Other tools (mainly the "thinking process") also led to TOC applications in the fields of marketing and sales, and finance.Depending on their design and construction, these machines operate at different speeds and capacities and therefore have varying efficiency levels.[citation needed] In general, the solution for supply chains is to create flow of inventory so as to ensure greater availability and to eliminate surpluses.The purpose of the TOC distribution solution is to establish a competitive advantage based on extraordinary availability by reducing the damages caused when the flow of goods is interrupted by shortages and surpluses.The TOC distribution link simply extends its buffer sizing and management techniques to its customers' inventories.Initially and only temporarily, the supply chain or a specific link may sell less as the surplus inventory in the system is sold.The primary measures for a TOC view of finance and accounting are: throughput, operating expense and investment.[citation needed] The thinking processes are a set of tools to help managers walk through the steps of initiating and implementing a project.When used in a logical flow, they help walk through a buy-in process: TOC practitioners sometimes refer to these in the negative as working through layers of resistance to a change.Since these thinking tools are designed to address successive "layers of resistance" and enable communication, it expedites securing "buy in" of groups.[22][23] Linhares, from the Getulio Vargas Foundation, has shown that the TOC approach to establishing an optimal product mix is unlikely to yield optimum results, as it would imply that P=NP.[24] Duncan (as cited by Steyn)[25] says that TOC borrows heavily from systems dynamics developed by Forrester in the 1950s and from statistical process control which dates back to World War II."[17]: 149 It is also claimed[citation needed] that Goldratt's books fail to acknowledge that TOC borrows from more than 40 years of previous management science research and practice, particularly from program evaluation and review technique/critical path method (PERT/CPM) and the just in time strategy.In these, Goldratt discusses the history of disciplinary sciences, compares the strengths and weaknesses of the various disciplines, and acknowledges the sources of information and inspiration for the thinking processes and critical chain methodologies.Goldratt published an article[26] and gave talks[27] with the title "Standing on the Shoulders of Giants" in which he gives credit for many of the core ideas of Theory of Constraints.Goldratt has been criticized on lack of openness in his theories, an example being him not releasing the algorithm he used for the Optimum Performance Training system.TOC needs more case studies that prove a connection between implementation and improved financial performance.[31] The Theory of Constraints International Certification Organization (TOCICO) is an independent not-for-profit incorporated society that sets exams to ensure a consistent standard of competence.