Week 11 Discussion- Improving Business Performance

Improving Business Performance

Week 8 Learning Resources

The Theory of Constraints

Through these resources, you will explore the subject of the Theory of Constraints. TOC was developed by Eliyahu Goldratt and first presented in his book,  The Goal (originally published in 1984). The objective of TOC is to prevent “constraints,” referred to as bottlenecks, from limiting the throughput (i.e., production rate) of an organization. This is accomplished through managing constraints as opposed to attempting to eliminate them.

· Cox,  J. F. III. (2015, August).  Unlocking the service sectorLinks to an external site. .  Industrial Engineer,  47(8), 30–35.

· Cox,  J. F. III., Robinson, T. M., & Maxwell, W. (2016, February).  Unconstraining a doctor’s officeLinks to an external site..  Industrial Engineer,  48(2), 28–33.

· CorrectionLinks to an external site. . (2016, March).  Industrial Engineer,  48(3), 11. Note: This article simply contains a brief correction to the Unconstraining a Doctor’s Office article.

· Dalton, M. A. (2009).  What’s constraining your innovation?Links to an external site.   Research Technology Management,  52(5), 52–64

· Fox, K. (2012).  Seeing the forest for the trees: Theory of constraints reduces cost of governmentLinks to an external site. .  The Public Manager,  41(3), 10–13.

· Hsu, P.-F., & Sun, M.-H. (2005).  Using the theory of constraints to improve the identification and solution of managerial problemsLinks to an external site. .  International Journal of Management, 22(3), 415–425.

· Monteiro, V. (2018).  TOC in the emergency roomLinks to an external site. .  Industrial and Systems Engineering at Work,  50(7), 38–42.

· Weiss,  E. N. (2004, February 20).  A brief note on the theory of constraints . Darden School Foundation, University of Virginia. https://hbsp.harvard.edu/

Throughput Accounting

Using these resources, you will explore the concept of throughput accounting, which is a method of increasing productivity and generating more income and profit. When people in traditional accounting and finance roles lead the budgeting process, there can be more opportunities for wrong decisions to be made, especially when there is an overemphasis on costs. By applying throughput accounting principles, you can gain a more comprehensive and enlightened perspective on decisions that need to be made within an organization by increasing the focus on throughput.

· Albright, T., Lam, M. (2006).  Managerial accounting and continuous improvement initiatives: A retrospective and frameworkLinks to an external site. .  Journal of Managerial Issues,  18(2), 157–174.

· Corbett, T. (2006).  Three-questions accountingLinks to an external site. .  Strategic Finance,  87(10), 48–55.

· Kadhim, H. K., Najm, K. J., & Kadhim, H. N. (2020).  Using throughput accounting for cost management and performance assessment: Constraint theory approachLinks to an external site. .  TEM Journal,  9(2), 763–769. https://doi.org/10.18421/TEM92-45

· Kirli, M. (2016).  Throughput accounting in strategic cost management: An applicationLinks to an external site. .  Annals of Dunarea de Jos University. Fascicle I: Economics and Applied Informatics,  22(2), 78–87.

Combining the Three Systems: Leaning, Six Sigma, & Theory of Constraints

Through these resources, you will explore the benefits of combining the best of the three main continuous performance disciplines: Lean, Six Sigma, and the Theory of Constraints. This combination is referred to as the velocity approach. Each of these systems has strengths and weaknesses but, when used together, they can efficiently improve business performance.

· Aghili, S. (2011).  Throughput metrics meet Six SigmaLinks to an external site. .  Management Accounting Quarterly,  12(3), 12–17.

· Hudson, J. D. Jr. (2017, October).  CL6 allows three shots at better improvement: Instead of bickering over methodologies, find synergies between theory of constraints, lean and six sigmaLinks to an external site. .  Industrial and Systems Engineering at Work,  49(10), 43–47.

· Ioana, B. R. (2018).  TOC, lean, six sigma are complementary?Links to an external site.   Ovidius University Annals, Economic  Sciences Series,  18(2), 389–394.

· Piraseth, R.M., Kannappan, S. (2013).  The synergy of continuous process improvementLinks to an external site. .  Industrial Engineer,  45(6), 41–45.

Important Documents

· Goldratt, E. & Cox, J. (2014).  The goal: A process of ongoing improvement (4th ed., pp. 1–123). North River Press. Note: This resource will be used for this week’s Discussion.

· Document:  Module 3 Assignment Template (Word document)