Four Principles of Flow

First of all, have you noticed that we named our company after this principle of TOC. So you can imagine what an effect it has on us. Plus how much knowledge we think these principles can teach us. When we started learning about TOC and the concepts of flow, the concepts appealed to us from an operations set up point of view. But as we delved in this body of knowledge, we felt that the concept of flow is so much more than just operations. The principles are so valid in all other environments too.

Flow in an operations environment, means that inventory is moving. When inventory is not moving, cash gets locked in the form of accumulated inventory, not to mention the carrying costs associated with it.

Using his understanding of Ford and Toyota, Dr Goldratt listed down the four principles of flow which are as follows:

1. Improving flow (or equivalently lead time) is a primary objective of operations.

2. This primary objective should be translated into a practical mechanism that guides the operation when not to produce (prevents overproduction).

3. Local efficiencies must be abolished.

4. A focusing process to balance flow must be in place.

Seems simple. Read it again.

Now think of applying these principles in any system. If done even partially correctly, we have seen breakthrough improvement. It’s the Wow factor.

Onwards and Upwards!