This Focused Performance Weblog is a "business management blog" containing links and commentary related primarily to organizational effectiveness with a "Theory of Constraints" perspective. TOC is noted for its applications in Project Management and Multi-Project Management (Critical Chain) and Operations Management (Drum-Buffer-Rope), as well as in Marketing, Strategic Planning and Change Management (TOC Thinking Processes). If you are on an archive page, current postings are found here.
Monday, August 18, 2003
Ah, But What to Measure? -- Keep in mind that every process has one or very few (less than 2?) active constraints that limit its performance at any point in time, and that performance is a matter of maximizing throughput -- the rate of attainment of "goal stuff" -- of the system/process. Therefore, while it is true that every link of the process chain is necessary to deliver more "goal stuff," if working at nominal performance -- if there are no out-of-the-ordinary issues in some part of the chain -- the performance of the entire chain is limited by very few key aspects. It's the good old "weakest link of the chain" analogy.
The purpose of measures should be to encourage all the links to do what will help the constraint (or other near constraints) maximize it's (their) throughput and to discourage links from doing things that sub-optimize system performance by hindering the constraint. So measurements of non-constraint sub-processes need to be focused on their support of the constraint's ability to deliver what it delivers.
Measurements of constraints, on the other hand, need to focus first on maximization of throughput (to the extent it is demanded by the processes customer/market), since the throughput of the system is directly related to the throughput of the constraint.
(In project terms, if the goal of the system/process that is the project is to deliver beneficial value, then the time until that valuable ring of the cash register is the constraint, limiting the ability to accrue project benefit. This is usually defined by the longest set of dependent tasks and their anticipated durations to get from today to the cash register, so it's no wonder that much of project management focuses on the critical path or critical chain of the project.)
That said, since the initial question was about measuring processes, be careful to remember that processes generally live in the context of a larger system as well -- the business unit or company. One needs to be careful not to push for measures at the lower level -- the process -- that will get in the way of the ability of the parent system's constraint to do what it needs to do, or for that matter, get in the way of other sub-systems' ability to contribute effectively.
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