You have defined what you want as an outcome of the change program; you have looked at how to understand your financial statements and how to use them to assess options. You have looked at the obstacles that lay in your path. Now we are going to start to look at your business, specifically.

Why your business is like a chain

Within the theory of constraints body of work that was developed originating with Eli Goldratt, there is a commonly used metaphor for a business that is referred to as the “chain analogy.” We are going to use that metaphor to help get started.

Think of your business as a series of operations and activities that each form one link in a chain. The work flows from one link into the next where it is processed, and then ultimately, once the work has progressed through all of the links, it is delivered to the customer and the cash flows back to your company. In a simple form the work may start out with marketing activities that generate an inquiry, that leads to a quote, a sale, then an order, moves into production, dispatch, invoicing, and finally to receivables.

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