About this Presentation
In many texts, Economics is defined as: the science of allocating scarce resources amongst competing or alternative ends. One of the basic laws of economics (which exploit the leverage from better utilizing the scarcest resource or system constraint) is defined as: To maximize the profit of the company we must produce & sell those products/services with the highest contribution per unit of scarce resource. Dr. Eli Goldratt proved the power of this law through the now famous P&Q example showing how by moving the focus to making and selling products with the highest throughput per constraint time unit (T/cu) rather than products with the highest price or highest margin, can dramatically improve a company's profitability. But will this simple rule (focusing on products with the highest T/cu) always deliver the highest profitability for the company. Alan's presentation explores the potentially devastating consequences of applying this simple rule to a more complex situation (than what was covered by the traditional P&Q example); a case where there is more than one overloaded resource (interactive constraints). The presentation also includes an analysis of the possible erroneous assumptions in the traditional management accounting and TOC texts as well as proposes a direction of solution (a new rule) to apply in such complex situations. Considering the fact that many plants have been balanced in design or through ongoing rightsizing efforts (i.e. if one resource is overloaded due to increased demand, it is likely that one or more other resources will also be overloaded), the above scenario might be more common than previously assumed. Management accountants, TOC practitioners, academics and implementers that apply the maximum T/cu rule to such complex environments could jeopardize a company's profitability in both the short- and long- term.
What Will You Learn
To help you get the most value from this session, we’ve highlighted a few key points. These takeaways capture the main ideas and practical insights from the presentation, making it easier for you to review, reflect, and apply what you’ve learned.
The speaker is conducting research on identifying and unlocking potential within organizations, drawing insights from TOC and complexity theory.
The speaker discusses the importance of correctly allocating scarce resources in an organization to maximize profitability.
The speaker highlights the importance of questioning established rules and theories, using an example of a question raised during a workshop that led to a deeper exploration of the principles of TOC.
Instructor(s)
Alan Barnard
Dr. Alan Barnard is a leading decision scientist and Theory of Constraints (TOC) expert with almost 20 years of experience working directly with Dr. Eli Goldratt, the creator of TOC. As the CEO of Goldratt Research Labs (USA), Alan focuses on using advanced technologies and decision sciences to develop Apps and Decision Support methods, enabling organizations to achieve more with less time. Under his leadership, Goldratt Research Labs has collaborated on innovation and research projects with renowned Fortune 500 companies like Microsoft, Cargill, BHP, Tata Steel, Amazon, and others, along with public sector organizations like Utah Governor's Office and UN WFP. Alan has held prominent roles in various organizations, including past-President of the South African Supply Chain Society SAPICS and past-President of TOCICO. His significant contributions have been recognized through prestigious awards, including inclusion in the 2020 Marquis Who's Who Global Listing, membership in the Forbes Technology Council, and the TOCICO Lifetime Achievement Award. He is an accomplished author and frequent presenter on Decision Making in a Complex World and Theory of Constraints at international conferences. Alan's latest book, "The Bottleneck - How to resolve our attention crisis," is currently in progress. As the chief architect of the award-winning HARMONY Decision Maker, Change Simulator, and Change Maker series of Decision Support Apps, Alan continues to shape the landscape of decision science and TOC. Please let me know if you need any further information or details.
Ms Alka Wadhwa
Alka Wadhwa is an experienced consultant and process improvement expert with over 24 years of expertise in the Theory of Constraints (TOC), Lean Six Sigma, and organizational performance optimization. She has successfully led projects in healthcare, financial services, and manufacturing, driving significant improvements such as a 67% boost in hospital operations and a 140% increase in outpatient visits.
Previously, Alka Wadhwa spent 17+ years at GE Global Research Center, where she led initiatives to enhance various GE businesses through advanced technologies, process redesign, and system optimization. Founder of Better Solutions Consulting, LLC, she specializes in using TOC, Six Sigma, and data analytics to streamline operations and build high-performance teams.
Her work has earned her multiple accolades, including the Empire State Award of Excellence in healthcare.
Dr Gary Wadhwa
Dr. Gary Wadhwa is a Board Certified Oral & Maxillofacial Surgeon with extensive experience in the field. He completed his Oral & Maxillofacial Surgery training at Montefiore Hospital, Albert Einstein College of Medicine in Bronx, NY, and has served as an Attending at prestigious institutions like St. Peters Hospitals, Ellis Hospital, and Beth Israel Hospital in NY. With a career spanning over two decades, he was the former CEO and President of a group specialty practice in NY from 1994 to 2015. Dr. Wadhwa holds an MBA from UT at Knoxville, TN, and has undergone additional training in System Dynamics at MIT, Health System Management at Harvard Business School, and Entrepreneurship and healthcare innovations at Columbia Business School. Committed to expanding access to Oral & Maxillofacial Surgery care, he is currently engaged in a meaningful project to provide healthcare services to underserved populations in inner city and rural areas through non-profit Community Health Centers.