Theory of Constraints (TOC) with Microsoft Dynamics AX

This post is in process ...

As it follows from the previous post, a constraint is a kind of 'philosophic' category in a sense of its proliferation, as it can be found anywhere throughout an organization, not only on the shopfloor. So that, the management framework should be comprehensive enough to cover the whole business with the tools for integrated problem solving. And it actually has its beginning in the business strategy.

Basically, the TOC can be supported by the business solutions at two levels:

1. Decision-making
2. Operations

For efficient decision-making in terms of figuring out constraints and the ways to deal with them there is a performance management system (PMS) that can help. Again, proper selection of PMS measurements is of great importance here. And The Goal showed quite well how the old system based on irrelevant measurements failed in helping identify problems and foster appropriate solutions.
The performance management system should cover all critical functional areas and be compehensive enough to involve the staff throughout the organization. The balanced scorecard (BSC) approach can be examined for to provide linkage with business strategy. Also, the continious improvement approach at operational level - when the processes are assigned with their specific measurements that are subject to constant imrovement.

At the same time, the overall performance management system shouldn't be overcomplicated - it rather should be simple and logical to be a driver to proper changes in the organization.

Draft notes:

• Business strategy management framework, functional strategies
• Key success factors: measurements, alerts, and correct data entry
• Performance management system
• Management accounting and corporate reporting framework
• Operational business intelligence
• Production functionality and Master Planning
• Lean horizontal solution for manufacturing, extending lean to cover other business areas (e.g. accounting)

© Andrey Maslov