Is radical improvement possible?

Categories: | Author: Administrator | Posted: 2015/07/27 | Views: 932

One of the basic assumptions of the Theory of Constraints is that every system can be substantially improved.

If substantial improvement means twice or three times the bottom line, in the short term, then it can be labelled radical.  Established businesses typically believe that this order of magnitude improvement is impossible.  It has only been achieved when they grew from small to medium sized, when times were good, but now they are stuck with, if they are lucky, a small percentage improvement or decay year on year.

The key to radical improvement is to focus on the top line, not the bottom line.  Radical improvement cannot be achieved by spending less money, reducing expenses.  Most often, spending less money leads to the decay of the bottom line as protective capacities are cut and the system becomes more and more exposed to the effects of variability and dependencies.

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