§ October 15th, 2018 § Filed under General Comments Off on Organization

And then what is the inherent simplicity? Let’s look again at the B: System this system seems a bit complex, has many interdependencies, functions and resources that one must consider. Interdependence means that a change at any point has significant implications on other points. Observe again two systems: System B to system and ask yourself: what is the minimum number of points that we have to play to have an impact on the entire system? For the system to the minimum number of points is four, but for system B single point, IE has less degrees of freedom and therefore is less complex. This is based on the inherent simplicity. Examine the system interdependencies, reveals that there are a few points that one must hit to have an impact to the entire system. TOC recognizes the earlier as the inherent simplicity of the system. In conclusion, the inherent simplicity sets that very few factors govern the performance of the system. While more complex than the system, more profound will be its inherent simplicity.

While more complex system, more interdependencies you will have, and the higher the possibility of impact point on the system impact in other parts of the system. Do we measure the performance of the system? According to theory of constraints there are three local indicators that allow us to measure the performance of the system. Credit: David Delrahim-2011. First the Truput which is the speed at which the system generates units of the goal; the Truput is the speed at which the system generates money through sales to a non-profit organization. You can see it as money coming into the Organization through sales less money that we pay our suppliers. The second indicator are operating expenses and it is all the money that the organization spends in generating units of the goal. And finally the investment, It is the money tied to the organization. TOC has as a main indicator the Truput, being the highest hierarchy for decision-making.

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