Dec 14, 2009

Goldratt’s Law of output from processes

Theory of Constraints” should be restated as “Goldratt’s law of output from processes”.

I believe people tend to pay more attention to a “Law” than a “Theory” simply because they understand the consequences of not following or flouting the laws.

We have had many experiences of flouting the universal law of gravitation while learning to walk and suffering the falls. We have gulped water while learning to swim as we could not properly act on Archimedes’ Principle.

Here is my attempt at drafting the law.

“Goldratt’s law of output from processes states that

  1. The process constituent with minimum capacity determines the maximum possible output from the process.
  2. The statistical fluctuations of performance of the process constituents result in the negatives being accumulated and the positives being wasted.
  3. Hence, unless proper mitigating actions are taken, the process output will always be significantly less than the maximum possible defined earlier.”

The five focusing steps would be the pragmatic corollary to the above law. These steps help us to minimize the influence of statistical fluctuations or the common and expected uncertainty that our collaborative work is always subjected to.

A project environment is a special case of process but the law still holds with careful translation.

I am sure there are better and wiser people who will be able to make it simple and more follow able.

The organizations have been routinely and willfully flouting this law with dire consequences. I am sure once the leaders and managers wake up to the universal and unmerciful applicability of this law, the rush to get things right would be bigger than the “Y2K” or the “Sarbanes Oxley” rush!!!

The term “Theory of Constraints” has been around for quite some time (since 1983 at least, more than a quarter of a century). It is yet to become mainstream and people still find it difficult to grasp the full impact and even more difficult to adopt, rather benefit from it in day to day running of organizations.

What is the difference between a scientific theory and a scientific law?

I looked up the Wikipedia to understand the difference between theory and law in science. This is what is mentioned there.

A theory, in the scientific sense of the word, is an analytic structure designed to explain a set of empirical observations. A scientific theory does two things:

1. it identifies this set of distinct observations as a class of phenomena, and

2. makes assertions about the underlying reality that brings about or affects this class.

Furthermore, it is written there…

Theories are abstract and conceptual, and to this end they are never considered right or wrong. Instead, they are supported or challenged by observations in the world. They are 'rigorously tentative', meaning that they are proposed as true but expected to satisfy careful examination to account for the possibility of faulty inference or incorrect observation. Sometimes theories are falsified, meaning that an explicit set of observations contradicts some fundamental assumption of the theory, but more often theories are revised to conform to new observations, by restricting the class of phenomena the theory applies to or changing the assertions made. Sometimes a theory is set aside by scholars because there is no way to examine its assertions analytically; these may continue on in the popular imagination until some means of examination is found which either refutes or lends credence to the theory.

At another place, the following is found…

To be a scientific theory, a theory must be tested a large number of times, by many different scientists in many different places, and must pass the test every time. It must be stated exactly, often using mathematics. And it must fit in with all of the other scientific theories. Science has many branches. Physics, chemistry, biology, geology, and astronomy are some of the major branches of science. A scientific theory in one branch of science must hold true in all of the other branches of science.

As regards, the scientific law following is mentioned:

A scientific law or scientific principle is a concise verbal or mathematical statement of a relation that expresses a fundamental principle of science, like Newton's law of universal gravitation. A scientific law must always apply under the same conditions, and implies a causal relationship between its elements. The law must be confirmed and broadly agreed upon through the process of inductive reasoning.

A law differs from a scientific theory in that it does not posit a mechanism or explanation of phenomena: it is merely a distillation of the results of repeated observation. As such, a law is limited in applicability to circumstances resembling those already observed, and is often found to be false when extrapolated.

Furthermore, under Physical Law it is written:

Several general properties of physical laws have been identified (see Davies (1992) and Feynman (1965) as noted, although each of the characterizations are not necessarily original to them. Physical laws are:

§ True, at least within their regime of validity. By definition, there have never been repeatable contradicting observations.

§ Universal. They appear to apply everywhere in the universe. (Davies, 1992:82)

§ Simple. They are typically expressed in terms of a single mathematical equation. (Davies)

§ Absolute. Nothing in the universe appears to affect them. (Davies, 1992:82)

§ Stable. Unchanged since first discovered (although they may have been shown to be approximations of more accurate laws—see "Laws as approximations" below),

§ Omnipotent. Everything in the universe apparently must comply with them (according to observations). (Davies, 1992:83)

§ Generally conservative of quantity. (Feynman, 1965:59)

§ Often expressions of existing homogeneities (symmetries) of space and time. (Feynman)

§ Typically theoretically reversible in time (if non-quantum), although time itself is irreversible. (Feynman)

§ Often those who understand the mathematics and concepts well enough to understand the essence of the

A "law" differs from hypotheses, theories, postulates, principles, etc., in that a law is an analytic statement, usually with an empirically determined constant. A theory may contain a set of laws, or a theory may be implied from an empirically determined law.

To my understanding, Goldratt’s law fits the bill and it should be declared to everyone who cares to run organizations.

1 comment:

  1. It is a good idea. I think the formulation needs some work. In particular, the definition of process may have to be inherent in the law. Something like, "In a system of linked process steps, the time averaged output of the overall process (throughput) can never exceed the lowest time averaged output of any step in the process".