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Management Approach: The Theory Of Constraints By Eliyahu M Goldratt

2567 words - 11 pages


Executive Summary

In this research assignment, I will be discussing about the Theory of Constraints (TOC), the literature review about the TOC, that is, what the literature and other authors are saying about this topic. I will also discuss the evidence of the practice of the TOC. Finally, in conclusion I will sum up the findings of my research.


Table of Content

Executive Summary 2
Table of Content 3
1. Introduction 4
1.1. Theory of Constraints 4
1.2. Background 4
2. Literature Review 5
3. Case Study: US Army recruiting 6
4. Conclusion 7
5. Referencing 7


1. Introduction
1.1. Theory of Constraints

Theory of constraints (TOC) is a systematic management approach that focuses on ...view middle of the document...

Thirdly, subordinate everything else to the constraint(s). Fourthly, elevate the constraint(s). Finally, preventing inertia from becoming the constraint! (Theory of Constraint Institute, 2012; BPI Consulting, LLC, 2014).
Constraints limit output whether acknowledged or not, however, when properly identified and managed, it provide the fastest route to significant improvement for the system and outline the basis for long term, strategic improvement. If ignored, the constraint may lay idle, squandering large amounts of capacity. An out-of-control constraint may also create problems with delivery schedules and cause unpredictable production delays, therefore, it is important for any manager to make the most of constraint and manage the rest of the organization with it in mind. (Theory of Constraint Institute, 2012).
Theory of Constraints main purpose is to systematically focus energy, efforts and attention on the system constraint. Thus this constraints or bottleneck restricts the output of the entire system and represents the primary leverage point for improving it. (Theory of Constraint Institute, 2012).
Benefits
TOC is an organized way to approach a business operation and to try to improve it. It takes the analytical and diagnostic process and lays it out into a step-by-step procedure. However, it enables the managers involved in the process to focus on the constraints in the process. It is a way to stimulate efforts and energies and to focus attention on a single aspect of the process with the intention of correcting a clear problem to arrive at a clear solution. Furthermore, organization that adopts and implements the TOC will be continuously striving for process improvement. (Wilkinson, 2013).
1.2. Background

Theory of Constraints and its forerunner Synchronous Manufacturing have been around for close to 20 years. The first concept of TOC associated to manufacturing and shop-floor scheduling has developed in specific applications and generic problem solving techniques over the years (Newbold, 1998). During this period TOC has been used by many manufacturing companies around the world to improve bottom-line results. Companies that have extensively used TOC were Ford, AT&T and the US military. It is also being used by individuals and very small companies. The application of TOC has reduced factory inventory levels by 75% and throughput by 40%, however, the improvements is seen after many failures in the approaches. (Newbold, 1998). In 1970, the “revolutionary” occupants of TOC such as evils of cost accounting and the importance of constraints incorporated into mainstream of management theory.
The theory of constraints was developed by Eliyahu M Goldratt who was a well-known business systems analyst. He wrote the first book about TOC, The Goal in 1986. He used scientific methods to create concepts in management which have proven to be great value to the industry. The concept of TOC has been applied with great benefit to project...

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