From the course: Lean Foundations
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The theory of constraints
From the course: Lean Foundations
The theory of constraints
- "For most business organizations, "the goal is to maximize throughput, "thereby maximizing cash flow." This is a quote from Eli Goldratt, and it's true in delivering physical products to your customer, as well as providing services. Every aspect of how businesses do business comes down to this one objective, maximize throughput. Let's look at a definition of throughput at three different levels. First, at the company level, throughput is the rate at which you are generating cash by selling your products. Second, at the factory level, throughput is the rate at which you are making those products that you sell. And third, at the equipment level, throughput is the rate at which the individual machine is producing output to help make those products that you're selling. In his now famous book "The Goal", Eli Goldratt took the principle of maximizing throughput down to the factory and equipment levels with his theory of…
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