Constraint – Your Best Friend

Why should we make an enormous effort to manage constraints? As Debra Smith wrote in The Measurement Nightmare “There really is no choice in the matter. Either you manage constraints or they manage you. The constraints will determine the throughput of the system whether they are acknowledged and managed or not . . .” (2000,p. 31). Her words helped convince me that, after discovering recognizing, and managing constraints, they can become our “best friends” for managing complex systems. Let´s see how.

In the real world, where the paradigm of the theory of constraint (TOC) is the rule of how things work, everything revolves around system constraints. As Lisa J. Scheinkopf wrote in Thinking for a Change: There are three major categories of constraints: physical, policy, and paradigm. All three exist in any given system . . . (1999, p. 16). I can´t agree more. I have plenty of evidence for the accuracy of this quotation from my own experiences with various constraints in actual companies, and I am convinced that you do too.  

To handle all these constraints, there are a number of tools available. On my website I focus on physical constraints and my tool for this purpose, using an SAP environment, is presented on this web page in another post (see JAP). This tool can serve for identifying physical constraints (machine/ manpower) in a plant using data available in the SAP database.

The next category of constraints is policy. Often, a constraint in a policy results in dysfunctional or incorrect decision-making processes. To identify such policy constraints, we can use the next tool from TOC called Thinking Process (TP). From my point of view, using TP rarely persuades someone without at least basic TOC – TP knowledge about incorrect or bad company policies. For this reason, I am going to take another route to convince various managers and supervisors to handle policy constraints in their companies.

This route is to use throughput accounting (TA) to demonstrate TOC power for better decision-making. For more effective results, the best method is to use real data, which managers are familiar with. For this purpose, I am going to build the next tool, in this case for throughput accounting (TA), using an SAP ABAP environment.

How TA works can be found in the book Throughput Accounting by Thomas Corbett(1998), a book that provided the foundation of my knowledge about TA. I will demonstrate the building blocks and logic behind TA step by step. At the same time, I will present ABAP code. In this way, everybody can implement it in his or her SAP environment. This can be tested on various scenarios.

I will program all needed ABAP classes for back-end systems, and those can be used as building block for your own applications.

Throughput Accounting uses three measures of income and expense: : throughput (T), investment (I), and operating expense (OE) The first step will be to program classes serving investment (I) values. We’ll see upcoming post…..