Constraints Management
The “Theory of Constraints” enumerated by the noted author of The Goal has slowly been entering the consciousness of manufacturing executives. While clearly a controversial subject, it is providing a new perspective on operations management as well as on cost accounting.
All factories have constraints, bottlenecks, hold-ups, and restrictions. The Theory of Constraints focuses managers’ attention on successful management of constraints by determining these limitations and following through eradication. By successively going through the identification-to-elimination process, throughput is enhanced through lower inventories. Sales and profitability grow through decreased lead-time and better customer service.
A new financial analysis—Throughput Accounting—accompanies the implementation of constraints management with a focus on maximizing contribution margins through identification and exploitation of restrictions.
Constraints Management is controversial to be sure,
but we think certainly appropriate for companies with
the desire to push the envelope of manufacturing economics.
The Remington Group can help in constraints management by:
- Providing conceptual training in constraints management;
- Developing best practices;
- Setting up a throughput accounting analysis scheme;
- Assisting in actual walk-through implementation of the Theory of Constraints and throughput accounting processes.
Constraints management as a guiding philosophy of manufacturing is on the leading edge requiring an individualized approach. The Remington Group treats each company as a distinctive entity in the adoption of this new approach. Find out more—click
here to contact us or call 609.497.6400.
Related Services:
Manufacturing Organization
Flexibility & Time Compression
Accounting
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