The Measurement Nightmare: How the Theory of Constraints Can Resolve Conflicting Strategies, Policies, and Measures

by Debra Smith

Book Overview

Today's competitive environment requires that companies distinguish themselves in the marketplace using factors other than prices. Companies that excel at on-time delivery, short cycle/leadtime, quality, and fast response to the market gain a competitive edge - and have the ability to market based on these features.
A proven approach to achieve this is the Theory of Constraints (TOC) production solution known, as drum-buffer-rope scheduling...

• Format: Hardcover
• Language: English
• ISBN: 1574442465
• ISBN13: 9781574442465
• Release Date: December 1999
• Publisher: CRC Press
• Length: 208 Pages
• Weight: 0.90 lbs.
• Dimensions: 0.7" x 6.2" x 9.3"

Customer Reviews

Getting to the core of the problem

The book focusses on the root problem behind all those dysfunctional metrics around us. It explains very clearly (also for people not trained in financial jargon) how the wrong focus on the wrong metrics in the top of the organization can have impact on the complete organization and may impact negatively the quality of decisions throughout the company.Very much recommended!

Seamless blend of traditional (GAAP) and TOC

This remarkable book manages to cover a wide array of topics (TOC, metrics, accounting and GAAP compliance and implementation and strategy issues)in approximately 200 pages and still impart a deep message. The message is not subtle - don't be a lemming just because 'you've always done it this way'. Actually, the message is much deeper and also encompasses how to measure the right things.What I like most is the fact that the author can write clearly and hold your attention while at the same time providing you with enough information to cause you to rethink the way you're currently doing business - and giving you a clear path to doing it better. The book starts out with eye-opening stories from the author's past experience of companies what were measuring the wrong things based on myopia. She then introduces TOC, discusses how traditional accounting metrics and indicators can be aligned to TOC, and goes deeper into TOC with a direct emphasis on how it relates to accounting methods. From there the book goes into TOC metrics and how to align them to GAAP financial statements. This short book wraps up with excellent implementation advice that is based on a strategic approach. Overall, this book is easy to read, but is rich with information beyond what one would expect is such a short book. The author backs up her proposed approach with real life experience and compelling facts that are logically presented and based on hard numbers, and is an obvious expert in both accounting and TOC.

Measurement or Comedy of Errors

This is far and away the most entertaining managerial accounting text ever written. Smith illuminates the flaws in traditional accounting measures with humorous (unless they happen to you), real disaster stories. Each story includes explanations of the classical accounting analysis (or misguided blind pursuit of efficiency) which caused the disaster and a discussion of more appropriate metrics.That people often let the way employers measure them influence their on the job behavior is a double edged sword. People measured stupidly just may behave stupidly (because the stupid measures will punish them if they behave wisely). Any CFO or managerial accountant who does not thoroughly understand this book may, with all the best intentions, put her/his entire organization at risk. The disaster stories lose some humor in the first person.Read it because its fun. Apply it because it works.

Very Good Book

Debra Smith has done an excellent job explaining TOC. The many examples bring to life TOC in a refreshing way.

Best of the Best

As the CEO of a company who has invested much time and resources to the (TOC) Theory of Constraints Management Philosophy, one thing kept coming back around to frustrate our implementation efforts. It was that of making the bridge from our current methods of measuring our performance and GAAP accounting system to that of TOC measures and TOC accounting. By this book, Debra Smith has given us the tools to do just that. I was sufficiently impressed with the contents, that I made it mandatory reading for all managers, from the CFO down to the shop foreman. This single book has managed to succulently illustrate what it took volumes in other publications to do. In short I highly recommend, and consider it must reading for both beginning and seasoned proponents of the Theory of Constraints Management Philosophy.