Tuesday, July 12, 2005

Common beliefs

There are many common beliefs in a traditional organization, like
Rogo's. One of them is to drive efficiency up, reduce costs and operating expense. What has turned out is that all the key measurements mentioned above must be looked at the same time. The absolute bottom on inventory and operating expense is zero while throughput can have no limits. Rogo demonstrated that traditional way of cost accounting for costs and inventory was wrong which has also stopped marketing people from getting more business.

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