Necessary But Not Sufficient: A Theory of Constraints Business Novel

This book is a journey of about a year and a quarter into the ERP market through the eyes of a hypothetical company BGSoft and its implementation partner KPI Solutions. Scott the CEO of BGSoft is a visionary who delivers business results for his clients through his ERP software. Lenny the head of Development, Gail his marketing chief and Maggie of KPI are the other key players in this novel. Like any other technology company BGSoft faces the uphill task of growing 40 % every year if it has to keep the analysts happy and retain its stock price. It is a key player in the ERP market and its customers are primarily Fortune 1000 companies who can afford the investments and fuel the growth that BGSoft is aiming at. Suddenly Scott realizes that most of the big companies have already adopted ERP and their next best bet is to look for mid size companies. If there are no more deer left in the forest then one has to go after the rabbits. Hunting for rabbits needs the same effort and results in lesser meat per win. Can BGSoff continue to grow at the same rate?Now there is an unusual call from Craig, CEO of Pierco one of BGSoft's largest customers. Thanks to a new Director, his Board has asked him to justify the investment that he has made in ERP. Call it by whatever name or any flavor of the latest technology jargon, the Board wants to know the impact on two important measures - top line and bottom line. The story now takes a very interesting turn, turning away from the routine issues of features, schedules, budgets, bugs, staffing and project management that are characteristic of any ERP company. The primary issue then becomes delivering true business value that customers can get from IT solutions rather than implementing software from leading vendors on fancy technologies. Once again, it is worthwhile to mention - Top line and Bottom line - what comes in from the customers and what is retained for the shareholders. Get this right or get out of here is the message for all CEOs. BGSoft now sees a paradigm shift - they need to sell value and not just software.ERP implementations are typically seen as automating data flow across different functions in an organization. True, it enables to break walls within but sadly the rules of the game continue to remain unchanged, defeating the purpose of better information flow. Technology is necessary, but not sufficient is the core theme of this book. In the process of helping Craig to find justification for his investment in BGSoft' ERP, we get a deep inside view of Pierco's operations. Excess inventory, production bottlenecks and plenty of infighting between functions who are expected to work towards common goals. Performance measures continue to aim at locally optimal solutions ignoring the final impact on customer service. Scott is quick to introduce the concepts of TOC- Drum-Buffer Rope method and Buffer management in Pierco. This releases forty percent capacity but causes an unexpected problem- plenty of inventory

Technology is great, however in and of itself it does not solve anything, and often compounds the problems which it is deployed to fix. Goldratt discusses this issue extensively in "Necessary but Not Sufficient" BGSoft is a fictional ERP company that must face the reality of the aforementioned dilemma. BGSoft's clients desire a measurable ROI following the massive expenditure required for an ERP installation. This ERP vendor must dig deep to document the tangible bottom line (financial) benefits, which its clients reap from installation of the software. In his typical business novel format, Goldratt masterfully engages the reader, and eloquently presents the logic used to bring about bottom line results. The results achieved are impressive, and involve the application of the Theory of Constraints. The company must carefully craft its moves so as to appease Wall Street. Goldratt also delves into the reasoning behind the sometimes-astronomical valuations of technology companies, and the massive fluctuations associated with this speculative sector. "Necessary but Not Sufficient" provides rock solid logic that is fundamental for success in today's technology focused business environment. While the focus here was an ERP vendor and it's clients, the same fundamentals apply equally well to the dot-com world. Look at the big picture, find the constraint, elevate it, and repeat. Most of all remember that people solve problems and bring about change and improvement. Technology is merely a tool, often necessary, but not sufficient in and of itself.

A brilliantly written novel that does, for an entire supply chain, what The Goal did for production. It explains clearly the need for a holistic approach that embraces the I.T. function. The book has an excellent example of how addressing a constraint in one area (production) unavoidably leads to disaster in the distribution channel. This book gives I.T. professionals and anyone wondering about the value of their computer systems an incredible business education in a fast-paced 4 hour read. Not only does it do a brilliant job of explaining the problems, but it even gives tangible solutions.

We have been hearing about the technological provess of the ERP systems that the market leaders are offering. Still, there are many clients who have not got the promised/desired results from the ERP. Why ? Is it b'cos of the ERP package or the implementation team ? ERP/APS alone is no panacea... Goldratt & his co-authors have struck at this very right point in NBNS. It says Technology is Necessary, But not sufficient. We need something more. We need to relook at our business rules, measurement indices when we go for the techno-solutions. The transformation of ERP/APS and the implementation team itself from a mere business/techno-solution provider to a bottom-line improvement enabler is etched very well. The importance of revising measurement indices like "throughput-dollar-days" & "inventory-dollar-days" is explained in very simple and wonderful manner.Certainly, a recommended read !

yet another business novel explaining Theory of Constraints. perhaps the best yet. tracking a computer software company, goldratt spins another intriguing tale of uncommon common sense.this time there are no 'clouds' or diagrams of the thinking processes. each 'lesson' is given in plain english for the reader to discover on their own. at first, i missed the diagrams but then upon re-reading the book, i decided i liked it better this way. the title is about technology being "necessary but not sufficient" to solve any given problem. it was very well done. however, it took 95 pages to mention TOC.as always, there is tribute to dr. deming. as well as to the numerous TOC consultants now available to assist YOUR business adapt TOC. yes, the book seems to be about ERP systems, but not really... it is about technology in general.this is a very complete text for understanding TOC and it happens to be aimed [in my opinion] at the techies or "dot coms" of our present day times. and yet, it will stand the test of time. my thanks once again to eli for a most valuable resource.-ski