Theory of Constraints Articles

In my review of the book

Accounting For Throughput

by David Dugdale and T Jones posted on Amazon.co.uk, I gave it Three Stars. This means Worthwhile.

Here is my review.

An early look at Accounting for Throughput consistent with the Theory of Constraints

This book is now 20 years old.

It was written at a time when there was plenty of criticism of traditional absorption based costing from

• Theory Of Constraints (TOC) advocates,
• from those who believed in Activity Based Costing and
• those who believed that there was too much focus on financial performance when non-financial performance indicators would chart progress better.

This presents the TOC side of the argument where it is believed that the main purpose is to support actions that will increase throughput (at that time sales revenue minus direct material costs) rather than the old “cost world” which aimed to reduce costs and improve (false) efficiencies.

The fact that fixed and variable cost production overheads need to be included in stock and work in progress valuations for statutory accounts for Companies House and HMRC because that’s what the accounting standards say means that Throughput Accounts and Absorption Cost Accounts need to be reconciled. The first is used to guide internal decision making whilst the second is used to report progress to the outside world.

It does a good job of summarising the situation at that time including a detailed look at one company in the UK that had implemented Eli Goldratt’s product planning software, taken up his ToC ideas and found their traditional costing system a barrier to progress.

It presents a balanced case highlighting the void around department measures when the old costing reports were removed and works supervisors were no longer judged on efficiencies compared to standard costs.

Back when it first came out, I would have probably rated this as at least a 4 star book. However 20 years have past and ToC has developed as it has been implemented in more businesses. Accounting for ToC will have also moved forward so this book only tells the first half of the story, even if it has the main plot lines. That’s cost it a star when I rate it in but I still think it’s worth reading if you’re interested in introducing a style of Throughput Accounting.

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The full title of this book by Matías Birrell and Javier Arévalo is

“Forget the Urgent!: Rather focus on the important: A business dialogue based on the best seller ‘The Goal’ by Eliyahu M Goldratt“.

In my review at Amazon.co.uk, I gave the book a rating of FIVE Stars. That means I think it is excellent.

Who Should Read This Book?

• Anyone interested in the Theory of Constraints.
• Small business owners who want to improve.

The Big Idea

Every business faces constraints unless it is able to generate an infinite amount of money. [continue reading…]

In my review of

Pinocchio Becoming Human with the Theory of Constraints

by Seong Am Moon, Dong Jin Kim and Aaron Rae Stephens posted at Amazon.co.uk, I gave it 1 Star.

Here is my review.

Sorry but I don’t think this concept works

I’m mystified why the authors thought this book would be a good idea. [continue reading…]

In my review of the book

5 Steps to Continuous Improvement by Allen Pratt

posted on Amazon.co.uk, I gave it 2 Stars.

Here is my review.

This should be free

Many business consultants and coaches offer a free report to sample their advice.

This book about the Theory of Constraints Five Steps Process is that kind of report. It is only 11 pages long and the author shares some of his experiences tackling constraints but instead of giving it to you for free, the author is asking you to pay for it unless you have Kindle Unlimited.

I can’t argue much with what’s here but I’m struggling to see the benefits of reading it. If you’ve already read The Goal: A Process of Ongoing Improvement then you won’t learn much other than about the author. If you haven’t read “The Goal” and you want to know about the Theory of Constraints, then there’s no better place to start.

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The full title of this book by John Arthur Ricketts is

Reaching The Goal: How Managers Improve a Services Business Using Goldratt’s Theory of Constraints

In my review posted on Amazon.co.uk, I gave it 3 Stars.

Here is my review.

A complicated book suitable for very big companies

To understand my review, you will need to understand my interest. I work with business owners to help them get unstuck and one of the methodologies I use is the Theory of Constraints. [continue reading…]

The full title of this book by Yann Ginon is

Continuous Improvement to Company Financial Performance The Human Factor: Understand and deploy Value Stream Mapping, Theory of Constraint and Lean6Sigma to transform your company into a cash machine

In my review posted on Amazon.co.uk, I gave the book One Star.

Here is my review.

The author should start again

About 25 years ago I read The Goal by Eliyahu Goldratt and thought the way novel business ideas were woven into a compelling story was brilliant.

Since then, I’ve read a few more of these business novels but none have matched the lasting impression of “The Goal” but never before have I seen the concept reduced to gibberish. [continue reading…]

The full title of this book by Uwe Techt is

“Goldratt and the Theory of Constraints: The Quantum Leap in Management“.

In my review at Amazon.co.uk, I gave this book a FIVE Stars rating. This means I think it is excellent.

Here is my book review.

A very helpful summary

Goldratt’s business novels like “The Goal“, “It’s Not Luck“, “Critical Chain” etc are an excellent way to get a general appreciation of the Theory Of Constraints. Their weakness comes apparent when you want to go back and remind yourself of the critical concepts because they are too buried into the story.

The author, Uwe Techt has written an excellent summary of the fundamental ideas within the Theory Of Constraints which serves as both a refresher and a reference for when you’re trying to implement the concepts. As an initial introduction, I still recommend starting with “The Goal“. [continue reading…]

The full title of this book by Henry Harel is

“Where Is The Constraint? A Theory of Constraints DIY Toolkit Book 1“.

In my review at Amazon.co.uk, I gave the book a rating of Four Stars. This means I think it is good.

Here is my book review.

A different perspective on finding the constraint

In this short book, the author shares his experience as a TOC practitioner helping businesses around the world.

It doesn’t attempt to summarise the logical construction of the Theory of Constraints in the way that a book like Goldratt and the Theory of Constraints.: The Quantum Leap in Management does. [continue reading…]

The full title of this book by John Haylock is

“Absolute Certainty: How to give your clients exactly what they want“.

In my review at Amazon.co.uk, I gave the book a rating of Four Stars. This means I think it is good.

Here is my book review.

Ideas for improving service businesses contained within a novel

This is a book about improving service businesses with the ideas dressed up in a novel.

The main character in the story is an accounting partner from a local three partner firm. It’s doing OK but everybody is very busy. He meets with a client who has a design business that has made some fundamental changes in the way it works after getting feedback from customers that they were not happy but the firm was getting the work because the other designers were just as bad. [continue reading…]