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.
Sunday, March 14, 2004
One More On Unit Costs (sort of) -- While on the subject, from a project management perspective, when one is working in a multi-project organization in which most resources are already part of the organization, "project cost" probably falls into the same questionable category as "unit cost." If people are not going to be hired or fired in substantial numbers because a project is taken on or declined, then the real "cost" of doing most such projects is the "opportunity cost" of not doing some other project. Truly incremental costs (cash outlays for that project alone) should be considered when comparing projects, as well as the use of constraining resources, but "total cost" of a project can be a mere distraction in many cases, and should be a consideration secondary to focus on the benefits of a project. I suspect that a lot of very beneficial projects have been killed due to undue focus on costs. (Before you ask, that's conjecture on my part.)
View Frank Patrick's profile
