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Constraint Theory and Technology

A critical aspect of running a successful business is the identification of constraints and the development of strategies and tactics to handle these constraints.

Standing on a garden hose creates a flow constraint, and limits the amount of water that reaches your garden. Similarly every business has numerous constraints that limit sales and profits. For example, if we take the happy but unrealistic case where the sales department starts delivering five times the usual volume of sales, does that mean that sales and profits will be five times larger? We know that this is not the case.

We understand that receiving an order still requires us to process the order, procure the raw materials for the order, manufacture the order, deliver it and collect for it. Each step is made up of multiple steps and processes that “constrain” the flow of sales and profits.

Consider the following common constraint example where the customer accepts a quotation produced in a sales front-end system. It is then often rekeyed into the production system and also into an accounting system. The work is done and recorded in another system and billing information is then fed back into the accounting system. Invoices are sent out and a collection system of some sort is used to collect the money. The multiple steps, multiple documents, multiple data entry points all introduce delays and errors. This is one of the scores of constraints in your corporate system.

Technology can help.

Imagine changing the above scenario where the approved order is electronically sent to the “accounting” system. The accounting system generates the suggested purchase order with the relevant data already captured. The “production” system receives the order information electronically. The final billing data is then added in to complete the transaction and the accounting system sends out the invoice electronically.

If elapsed days of clerical activity (i.e. the constraint), could be reduced to hours, what would that mean for your business?


Evron can help you identify and deal with constraints. Call us for a free consultation.

Larry Noble, P.Eng, MBA

President, Evron Computer Systems Corp.

Lnoble@evron.com


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About EVRON:
EVRON is a leading provider of financial systems and network infrastructure solutions for small to mid-sized businesses. We have a history of success with thousands of implementations since 1983


Larry Noble P.Eng, MBA

President,

Evron Computer Systems Corp.


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