Archive for November 2011

Rules that can be broken

November 29, 2011

So, in the Theory of Constraints, we often use the terminology of Throughput, Operating Expenses and Inventory. When wondering which of these management should focus on, it seems as if the latter two are the easiest, since these are hard numbers sitting in font of management. What’s more, steps to be taken are crystal clear – cut work hours, cut maintenance costs, cut inventory held in stock, etc.
And of course, anyone who has read any of the TOC books should well know that both of these have limits. You can only cut costs to their maximum amount. Bringing down inventory levels can only save the company the amount of money that is currently in inventory. Operating Expenses can only be brought down to zero. And so, the rule should seem to be that if you want to improve your company as much as possible, focus on throughput.
And this is the rule that prevails in the TOC world.

But is this always the case?
In the standard solutions offered currently by many consultants (such as those which appear in the standard S&T trees proposed by the Goldratt Group), there is an assumption that focus is on Throughput.
So, what cases would prevent this from being relevant?
In my opinion, there are two cases. The first is when Operating Expenses is not really under control at all, and the other is when no one knows how much Inventory there is. In other words, without the knowledge that both Operating Expenses and Inventory are NOT highly variable, and constantly in fluctuation for unknown reasons, you cannot focus on Throughput, because they will create so much noise, that any activity focused on Throughput could have little to no real effect.

And the reason I brought this up is that AMR filed for bankruptcy today. In battling the low-cost airlines for passengers, this conglomerate was losing. And instead of cutting costs in a smart way, as far as I can tell, they spent money on advertising, on adding amenities that they could not prove the passengers desired, and never entered talks with the unions to allow a smarter package for both parties.
In short, their Operating Expenses were all over the place, without a clear line between them and profits.

I only hope that not many people lose their jobs in the process.

Good morning. Sunshine.

November 25, 2011

I think that one of the things I will miss the most, physically, is the sun in the morning. Sun-up is earlier in Israel, just a bit, I think.
In any case, working in a window-less office will be a bit of a bummerrrrrrr.

From earlier today

November 25, 2011

The flight from Florence to Charlotte was on an airplane so small, a passenger was asked to move from aisle 1 to aisle 10 For reasons of balance. The passenger who shifted seats weighed maybe 75 kilos (165lbs). 
At least the flight itself was sans bumpiness. The in-cabin noise, however, was annoying and aggravating. The landing was one of the smoothest I have ever experienced.
This iPad is a cool toy – and I haven’t d/l’d games to it yet!

האשה שיושבת לידי, בטיסה משרלוט לבוסטון, עלתה למטוס משתעלת. לדעתי היא מפחדת שיעשו לה עוול אם היא תראה לדיילות שהיא משתעלת, מכיוון שכאשר הצעתי לה שנבקש בעבורה מים, היא סירבה. לא נעים, לא נורא, יעבור תוך שעה וחצי.

Three P’s of Inherent Simplicity

November 24, 2011

The notion of ‘Inherent Simplicity’ bears much power, potential and peril.
Power, for it enables the discovery of the deepest of causes, of allowing the party seeking this cause to look above the everyday-dealings of the UDEs we face every moment, to get to that Archimedal point, which allows a real boosting of the entire system.

Potential, for many people will buy in to the Socratic Method because of this conceptualizer ion of the world, and because utilizing this attitude can lead to significantly improved situations. The buy-in is SIGNIFICANT.

Peril, for it does not provide a robust solution in and of itself. IS means an attitude towards the direction of the solution, towards the focus of the search. It says nothing regarding the way the solution will come about and/or implemented. And therefore, it can lead to people losing faith with the power of the Cause-and-Effect thinking processes. In other words, this is just one pilar of four. It is significant, important, crucial, but not the whole picture.

moving too fast

November 23, 2011

I do that often
but the thing is…I expect my conversation partners to say “hold up” or “wait a second”.
It didn’t happen in two crucial conversations today.
Going to have to review.

To note, this does not mean that understanding was not there, but it means there was something that could have gotten in the way – completely my fault if so.

a thought from today: ease

November 22, 2011

inherent simplicity does not imply ease
but using its tools allow easier access

they have to do something

November 20, 2011

about the train through Florence.

Also, the US/SC/Florence government is not focused on the real constraint.