From the course: Constraint and Bottleneck Management

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"The goal" of business operations

"The goal" of business operations

From the course: Constraint and Bottleneck Management

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"The goal" of business operations

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- It's not just manufacturing, far from it. Although the study of constraints and bottleneck management was perhaps developed there, it's acutely relevant to a huge range of industries, sectors and countless non-business situations too. Healthcare, hospitality, data and IT, agriculture, and so much more. So what's the point of all this constraint management? Improving system and operational performance is all well and nice, but doesn't actually say much. The goal of most for-profit businesses is succinctly described by management guru, Eliyahu Goldratt in his seminal book, "The Goal" where he introduces the Theory of Constraints. The goal of a business is to make money by increasing net profit while simultaneously increasing return on investment and simultaneously increasing cash flow. Translated into operations talk, that means to increase throughput whilst decreasing inventory, whilst decreasing operational expense. Good bottleneck management can have a profound impact on improving…

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