- “Science” is about ‘common sense’
- Make sure you are measuring the correct things
- “Productivity is accomplishing something in relations to a goal”
- The measurements are
- Net profile
- ROI
- Net cash flow
- ‘How do we link actual work to this money?’
- New measurements
- Throughput is the rate the system generates money through sales
- Inventory is the money invested in things purchased to sell
- Operational expense is the money the system spends to convert the inventory to throughput
- The pursuit of efficiency is often counter to the goal
- Dependent events limits the maximum fluctuations you can handle
- Balance flow, not capacity
- (All cars traveling at the same, slow speed, move fast than if left to their own choices)
- Bottlenecks are when market demand exceeds capacity
- Activating a resource is different from using it
- We seek to optimize the whole system, not for local optimizations
- Common practices can impede common sense
- Kanban is a mechanism to signal for a backfill
- This limits the available quantities, this also limits excess inventory
- Sophisticated algorithms that track all variables are really difficult to get correct and not particularly useful
- The effort to capitalize on improved service is markedly different than the effort needed to build the company
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