Theory of Constraints in the Public Sector

After the Introduction of Theory of Constraints, some participants could not understand the application of this concept to the city government and the public sector in general, even with the examples presented by the Consultant of actual applications of Theory of Constraints.  Since Theory of Constraints has been talking about making money as the goal, how is it then applied to an organization such as the government when its main goal is public service -- delivery of services to the people.

It is actually simple. One just has to replace the concept of money with services. Just like this.

If for the manufacturing/business, the Goal is to make money now and in the future; for the government/ public sector, the Goal is to provide excellent services to its people now and in the future.

Theory of Constraints uses three measurements : Throughput, Inventory and Operating Expenses.

Throughput for business/manufacturing is the rate at which the system generates money through sales; Inventory is all the money that the system has invested in purchasing things which it intends to sell; and Operational Expense is all the money the system spends in order to turn inventory into throughput.

Now, Throughput of the government is the satisfaction of clients/customers to the delivery of services. Inventory is all the money that the government has invested in purchasing things to provide the excellent delivery of services. And, Operational Expense is all the money the government spends in order to turn inventory into throughput.

Attendees to the First Theory of Constraints Workshop

The two-day workshop entitled "Theory of Constraints/Constraint Management as an Innovative Way of Managing Public Services" on August 20-21, 2007 was attended by select government employees from different departments namely Iligan City Waterworks System Office (ICWS), Economic Enterprise Development and Management Office (EEDMO), City Planning and Development Office (CPDO), City Budget Office (CBO), City Treasurer's Office (CTO), City Engineer's Office (CEO), and Gregorio T. Lluch Memorial Hospital (GTLMH).

Many of the participants, 17 to be exact, are from ICWS because InWEnt chose ICWS as the pilot department with which to implement the concept of TOC since my project proposal in Germany was on water improvement. And Michael Funcke-Bartz, the Senior Project Manager, also saw the need to help improve the water system of Iligan.  To view  the complete list of participants during the workshop, click here.

The first day of the workshop started with a prayer given by Mr. Octavius Molo of the City Agriculture's Office, followed by the singing of the National Anthem lead by Ms. Rosa Edrozo of the City Human Resource Management Office.  And I gave an overview of the program.