From Management by Constraints (MBC) to Management By Criticalities (MBC II)

Abstract

The five-step “Theory of Constraints” as articulated and explained in Goldratt's books, is touted as “not only beneficial but mandatory”. However, although it is indeed a useful focusing heuristic methodology with an impressive track record, it is not really a theory and it is certainly not mandatory. Furthermore, it involves a serious internal inconsistency that must be “faced courageously”: To make drum-buffer-rope (DBR) work, Goldratt forbids balance, and yet Step 4 involves steps that tend to balance the system. I restrict the term Management by Constraints (MBC) to the correct aspects of the methodology and argue that successful MBC applications never follow the “official version” with complete faithfulness. MBC implicitly rejects DBR and allows balance. We should go further and plan the capacity (criticalities) taking into consideration the variability and the economic costs of the resources. This entails balancing the criticalities of resources based on their economic value relative to the value of the throughput they serve.