 Measurements for Effective Decision-Making
M.L. Srikanth and S.A. Robertson, Spectrum Publishing Co., 1062 Barnes Road, Wallingford, CT 06492 (203) 284-8998, 175 p.
Reviewed by: Doreen Remmen, NYF CORP.
NYF Corp. has established a relationship with the Spectrum Management Group, Inc., experts in Synchronous Manufacturing, a propriety approach to realigning manufacturing resources in accordance with the Theory of Constraints. Our Leadership Team has read and recommends this book, written by two of the principals of Spectrum in 1995. The publisher has provided the following review.
This 12-ounce volume is literally going to be worth is weight in gold to many readers of this magazine.
With gold at $400 per ounce can the contents be worth more than $5,007 in this reviewer's opinion, yes.
While a lot has been written about the Theory of Constraints (TOC), Messrs. Srikanth and Robertson have managed to pull together the benefits without getting bogged down in the details. Every IMA member in a manufacturing or distribution operation should read this book because it undoubtedly will challenge some long-held assumptions.
The emphasis is, as the title suggests, on the measurements that a firm needs to undertake in order to make the right decisions. By focusing on what to look at, and how to measure it, almost everyone will start to see his or her own operations from a totally different focus.
In 20 pages the authors prove the following:
"While every facet of labor costs and other cost elements have been measured to minute levels of detail, even rudimentary information regarding shipments, lead times, etc., are generally not available. Performance to budget has been the holy grail of operations managers, while performance to customer expectations has only appeared on the 'radar screen' lately.
In Chapter 8, on Capital Investment Decisions, the authors really turn the traditional capital budgeting approach on its head, arguing persuasively that investing in cost-reducing capital equipment may not accomplish very much. If the are of proposed cost reduction is not a bottleneck operation, then reducing its costs really accomplishes little in terms of total firm profits. Only capital expenditures at bottleneck operations should be undertaken.
Only one fault can be found. The authors did not put in a real-life case study regarding implementation of their ideas. – Alfred M. King, CMA, Valuation Research Corp., Princeton, NJ.
See excerpt
Buy Now
|
