Things moved on since Eli Goldratt’s revealed Theory of Constraints through his business novel and bestseller “the Goal”. Most of today’s processes are more complex than 30 years ago: supply chains are stretched over the globe, new products are launched more frequently and batches are changed more often, among others. Thus identifying the bottleneck or capacity constraint is more difficult and must also be redone more often.
In this video, Philip Marris shares some “lessons from the road”, real case lessons learned from more than 30 cases in the last 10 years. Surprisingly, if companies were rather good identifying their bottleneck, it turned out that now, in 80% of cases companies are wrong about where their capacity constraint is.
Main learnings are:
- companies are often confusing where the constraint should be with where it really is
- ERP data is not a reliable way to identify constraints
- companies tend to have an outdated / obsolete analysis of the situation
- new quality requirements often create new capacity constraints
- (bad) cost cutting decisions create new bad constraints
As a conclusion, he points out that being wrong about where a company’s constraints are is good news since it implies that there are significant opportunities remaining to improve performance drastically and rapidly.
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