“Be aware that no one will measure your performance. Performance is not the summation of individual performances, but this plus interaction. There is no way in a system to measure individual performance. We only measure four things: Throughput Dollar Day, Inventory dollar Day, Cash in and Cash out. Everything else is detail.”
Organizing a company around a constraint is a powerful way of managing the complexity of the system, ensuring that the system is capable of producing to its maximum with its given resources.
The constraint needs to be “fed”with the right amount of material so that it can work constantly. This is necessary because any minute that the constraint is idle, the entire system is losing throughout that can never be regained. This can translate into thousands of dollars lost, or whatever the appropriate measurement of throughout is. In healthcare it might be measured in increased waiting time for patients that could be avoided if the constraint is properly fed. This requires the entire system to be designed around the constraint and for processes to be designed for optimal flow.
Measurements, also, have to reflect what is going on in the entire system, not just in local areas. See the slides below regarding generation of value and systemic measurements.
