“How good a system is performing is determined by how quickly and at what cost it can turn input into output. Actors within a system should never be measured in isolation. What matters is their contribution to system’s performance as a whole.”
Andrey Salomatin has started a nice series on Theory of Constraints in software startups: Systems thinking in management and Work hard enough and you won’t finish anything and I bet you look good on the plant floor. I'm wondering if there will be more in the series.
He's got a nice way of talking about how to think about your business, your organization, etc. I like how he's translated some of the TOC language into his own world - defining Throughput, Inventory and Operating Expense, for example:
- How much useful work does the system perform over a fixed period of time is called throughput of that system;
- How much work is stuck in the system but will be released at some point is inventory or work in progress;
- What are the resources spent to turn inputs into outputs is operating expenses.
The second article talks about the very familiar problem of our having too much to do - we overload ourselves and our work systems with so much work-in-process that the system falls over. The general direction of the solution is to look for more and more opportunities to improve flow (or "flow to value"), rather than making sure "everyone is busy." He provides a familiar simulation that shows what happens if we keep starting more than we can finish.
The way he worded some of the conversation made it even more obvious how the Toyota Production System and Theory of Constraints are strongly connected. Amongst other things, the idea of "waste" that is a strong concept in TPS is also important in TOC, but in a different way. TOC aims to guide people to do more of the right things and less of the wrong things, and TPS (on the surface) emphasizes doing less of the wrong thing. But both emphasize that the way you know what is the right/wrong thing: the things that make the company money! (Or the things that create more value - ideally from the perspective of the whole system.)
The third article goes into this in more detail and discusses the idea of just-in-time and kanban cards to help change to a pull or flow-based system. It sounds like future articles may add more of Theory of Constraints on top of that.