Theory of Constraints http:www'managementsupport'com

1
Theory of Constraints http//www.managementsupp
ort.com
2
Outline

• Introduction to Constraints
• Five Steps Of Theory of Constraints
• Drum Buffer Rope
• Evaporating Cloud Method
• The Batch Size Problem
• Chain Analogy
• Issues with TOC
• Measurements Financial Issues

3
Constraints

• Any system can produce only as much as its
  critically constrained resource

Constraint
60 units Per day
70 units Per day
40 units Per day
60 units Per day
Maximum Throughput 40 units per day
4
Why Drum Buffer Rope?

• A proven method to
• Reduce Lead times an average of 70
• Reduce inventory an average of 49
• Reduce Operating Expenses
• Improve on time delivery performance an average
  of 44
• Increase Revenue an average of 63
• Better control
• DBR delivers ALL of these results AT THE SAME
  TIME.

The World of the Theory of Constraints by Mabin
Balderstone, St. Lucie Press 2000
5
Issues with TOC

• Advantages
• Improves capacity decisions in the short-run
• Avoids build up of inventory
• Aids in process understanding
• Avoids local optimization
• Improves communication between departments

6
TOC, TQM and JIT

• All 3 methods attempt to reduce variation and
  recognize the interdependencies.
• Statistical process control is emphasized in the
  quality area to help identify ways to reduce
  variations.
• Cells are used to reduce the dependencies, U cell
  configurations, where one worker is moving with
  the processed piece from one machine to another
• Predetermined schedules, in TOC, reduce both
  statistical fluctuation and dependent resources.