Welcome to this series on the Theory of Constraints (TOC) with Ashton Fourie. It’s a 9 part series that looks how the Theory of constraints can help you grow your business. This is the third installment where we chat about spending to much money on increasing capacity.
What? Spending Too Much Money? WTF!
The point Ashton makes is that even when business try be frugal, they end up saving money that they should have spent. And the opposite, they spend money that they should not have spent.
As Ashton says, Money is just like time. It works much more effectively when it is focused.
By understanding where your constraints are, you have a much more focused plan and a clearer idea of exactly where to focus your resources – like money and staff effort.
Money Management Is About Managing A Flow
The key point here is that money management is about managing a flow. We can see the importance of always directing that flow to where it will have the biggest impact right now.
If you spend money on your constraint today, it will increase your throughput rate tomorrow. That increased Throughput will release cash flow for you to spend money on the next constraint. And that is money that you didn’t have before dealing with your current constraint.
This is why we see such incredibly short payback periods on TOC projects.
Business Relearnt – Learn To Unlearn, Relearn.
Fast constant change demands that we keep looking at how we do things and to keep learning new ways to solve our customer’s problems. What business relearnt series provides you with approaches and methodologies to help you do that.
The Full Business Relearnt TOC Series – Broken Down?
TOC offers you many opportunities to look at doing things in a different way. Ashton breaks down how you can do this in this series. Here are the topics around the theory of constraints that we will cover:
- Why you cannot ignore TOC
- The surprising inverse relationship between the number of improvements and actual improvement
- Are you spending too much money for increased capacity
- The costly mistake of elevating your constraint first
- Design for Delegation – Three levels of work
- Planning too much is planning to fail
- You don’t want project management – You just want to get your projects done!
- Theory of Constraints and Employee Engagement
- Turning the layers of resistance into moments of agreement
Who Is Ashton Fourie:
Ashton is a proven growth strategist and looks at building sustained success in tough economic climates.
He is the CEO of 5-2-50 (pronounced Five To Fifty). This is a South African based company with a vision to eradicate poverty through ensuring that there is a good job available to every woman and man on earth who is able and willing to work.
5-2-50 help’s their clients formulate a clear vision and strategy to grow up to ten times in size in a period of no more than five years. Their toolset is a combination of Theory of Constraints, Lean and Agile interventions, combined with their strategic management methodology that has been tested in the local and international market.