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September 26 , 2009

33 - Theory of Constraints in Complex Organizations


The purpose of this chapter is to suggest ways that TOC can be used to address problems of complex organizations. We start by providing a definition of complexity and then describe the core conflict of complex organizations, which we believe results from the need for both continual growth and organizational stability. The problem complex organizations face is coordination of many independent units that are all trying to maximize local measures. We propose a key injection - "Everyone in the organization who has a significant impact on Throughput is measured by Throughput Dollar Days (TDD) - and show how TDD and other TOC Supply Chain measures can be used in complex organizations to create an effective method of coordination between independent units and give senior management new insight and greater ability to manage such organizations.

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