Theory of Constraints Handbook - James Cox Iii [567]
About the Authors
Boaz Ronen is a Professor of Technology Management and Value Creation at Tel Aviv University, Faculty of Management. He holds a BSc in Electronics Engineering, and an M.Sc and PhD in Business Administration. Prior to his academic career, he worked for over 10 years in the hi-tech industry. His main areas of interest are focused on firms’ value enhancement and TOC.
He has consulted with numerous corporations, healthcare organizations, and government agencies worldwide. During the last 20 years, Prof. Ronen has been leading a team that successfully implemented Focused Management, TOC, and advanced management practices of value creation in dozens of industrial, hi-tech, IT, healthcare, and service organizations.
He has been commended numerous times and received the Rectors’ award for outstanding teaching. He was also a visiting professor at the Schools of Business of New York University, Columbia University, Stevens Institute of Technology, several Kellogg programs around the globe, and at SDA-Bocconi (Milan, Italy). Prof. Ronen has published over 100 papers in leading academic and professional journals, and has coauthored four books on Value Creation, TOC, and Focused Management. In 2005, he was the editor of the special issue on TOC published by Human Systems Management. His book on healthcare management was recently published by Jossey-Bass/Wiley. His book, Focused Management: Doing More with Existing Resources, was published by John Wiley & Sons in November 2007. Shimeon Pass co-authored both books. His latest book, Approximately Right, Not Precisely Wrong, on decision-making, cost accounting, and pricing, was published in 2008.
Shimeon Pass is a noted expert in applying the philosophy and tools of TOC and the Focused Management methodology. He has consulted numerous corporations, organizations, and government agencies worldwide in industrial, service, retail, and nonprofit organizations.
He holds a BSc and an MSc in Chemistry from the Technion, Haifa, Israel and from the Weitzman Institute, Israel, and an MBA from Tel Aviv University, Faculty of Management.
Working in the past for IBM in the ERP group, Mr. Pass has also specialized in the implementation of advanced managerial methods to enterprise information systems.
Mr. Pass is now specializing in applying TOC in the management of R&D organizations and project management.
He has published numerous papers in leading academic and professional journals, and co-authored two books on TOC and Value Creation.
CHAPTER 29
Theory of Constraints in Professional, Scientific, and Technical Services
John Arthur Ricketts
Introduction
Theory of Constraints (TOC) is one of the most widely recognized management innovations of our time. That’s quite an achievement, considering TOC creates clear explanations of causes and effects. Although that might sound like TOC is nothing more than common sense, the overwhelming alternative to TOC is conventional wisdom—which is certainly common, but often doesn’t make much sense. What sets TOC apart is that it uses knowledge of cause and effect to solve otherwise intractable problems.
For instance, conventional wisdom says the best way to optimize a system is to optimize every element within that system. That’s why managers push every worker and every machine to produce as much as possible. Yet, many business and government systems are like chains, and a chain is only as strong as its weakest link: the constraint. Therefore, if the constraint actually limits what a system can produce, conventional wisdom mistakenly calls for lots of process improvement in areas that cannot optimize the enterprise. Indeed, conventional wisdom does not even acknowledge the system constraint, let alone target it for improvement, as TOC does.
TOC is best known in the manufacturing and distribution sectors where it originated, but services are the dominant sectors in mature economies and the fastest growing