Theory of Constraints Handbook - James Cox Iii [688]
This approach de facto allows for building a unified scheduling algorithm for project management, production, and distribution requirements in an organization. It solves the longstanding dilemma of having to generate standalone schedules for individual parts of the organization vis-à-vis producing a synchronized schedule, thus providing the most benefit across the company or the entire supply chain.
First, one must have common metrics to measure how effectively each part of the enterprise is contributing to Throughput. Throughput is the rate at which each piece contributes to the output of value-added your organization generates and delivers to the market. In a for-profit organization, Throughput normally can be stated as the amount of money generated over a given period of time through sales, less the TVC. In a not-for-profit organization, Throughput could be the amount of an organization’s value-added units produced per money expended over a given period of time. This approach provides the means of scheduling the many diverse functional areas and their resources in order to maximize Throughput.
In the planning and scheduling phases, all of the constraints in the organization are identified and leveraged to optimize the work flowing through the system. This pipelining is crucial and the key to producing the greatest Throughput. Therefore, this scheduling engine coordinates the projects, production, and distribution schedules by leveraging the constraints and synchronizing their efforts.
It also provides powerful and extremely effective tools for managing the inevitable variation encountered while executing the schedules. No longer restricted to continuously reacting and fire fighting, managers are given ample warning and visibility to the potential impact the variation may have on delivery dates. In most cases, the disturbance is identified quickly through BM before jeopardizing the schedules’ control limits and corrective action is taken. The time buffers and BM allow management to know when they have to take action and, if so, precisely where they have to intervene. Of equal importance is now having real-time access to information, indicating when the system or schedule is in control and no action is required.
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