Put simply, Throughput is the difference between sales and direct costs (raw materials, for example). must be linked, somehow, to an increase of revenues, or a reduction of costs and inventories.ģ Key Measurements: Throughput, Operational Costs and Inventories Any improvement in quality, service, productivity, etc. Other performance or productivity objectives, while important, are of no real contribution if focusing on them does not allow the company to reach its main goal. Here I make a short overview of the concepts that are at the core of TOC.Īt the most basic level, a company’s GOAL is to make money. The GOAL introduces the Theory of Constraints (TOC), which is arguably Goldratt´s major contribution to the field. Goldratt wrote this book to propose his methodology in an easy-to-understand way and he successfully explores not only the issues that the company is going through, but the main character´s personal struggles.
The GOAL is a novel about a troubled manager that struggles to improve the finances and operations of a factory, and finally comes through by changing the organization’s priorities and adopting new management ideas.
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