Definition
The
Theory of Constraints is a management philosophy that focuses the
resources
of an organization on improving the performance of the constraint that
directly
affects the P&L. It is an approach to solve constraints and
problems
in a logical way by building a logic chart of the problem, finding its
roots
and developing steps to remove the root of the problem. TOC methods are
used
by managers and sales personal to improve the management and sales of
their
companies.
TOC contends that the output of any system consists of a series of
steps
where the output of one step depends on the output of one or more
previous
steps will be limited, or constrained, by the least productive steps.
The
system's constraint dictates its performance and if we want to increase
the
system's perfomance we have to identify and explore the system's
constraint.
TOC involves adoption of special thinking processes which, in most
cases,
are different then the current thinking, but are logically accepted and
used:
The constraint, is first identified. To increase throughput, flow
through
the constraint is increased. Throughput is defined as all the money
that
enters the company minus what it paid to its vendors.
Once the constraint is identified, the next step is to focus on how to
get
more production within the existing capacity limitations, known as
exploiting
the constraint.
The next step is to subordinate the non-constraint resources.
Subordination
is used to prevent materials from waiting in queue at a non-constraint
resource
that is running a job that the constraint doesn’t need.
After the non-constraint resources have been subordinated, the
next step is to determine if the output of the constraint is enough to
supply
market demand. If not, it is necessary to find more capacity by
"elevating"
the constraint. Following this sequence ensures the greatest movement
toward
the goal of making more money-now and in the future.
Once the output of the constraint is no longer the factor that
limits the rate of fulfilling orders, it is no longer the constraint.
Step
5 is to go back to Step 1 and identify the new constraint because there
always
is one. The five step process is then repeated.
The Issues
One
of the basic premises or principles of TOC is that a company cannot
allow
a constraint to move around or suffer a chaotic result. This is not the
case in a flexible manufacturing system. It depends on the cycle time
of
a part at a particular work station. A flexible manufacturing cell
allows
the constraint to move around from one piece of equipment to the next
depending
on the particular part that is being processed. In other words, it is
desirable.
Secondly, TOC treats simptoms and not root causes of problems. Shuffling inventory around from one work center to another is not the way to successfully manage a maufacturing plant.
Just as anything else, Theory of Constraints is no panacea, nor
should it be embraced as a religion, or a fad. It is an operational
strategy
that needs to be carefully reviewed for applicability. The best way to
approach
the situation is to first rationalize a facility and its processes,
identify
the opportunities, and then conceptualize a solution. If this fits, use
it.
Pragmatic Applications
One simple way of using constraint theory is to reduce throughput time
by
reviewing the processes in the factory and office from the time an
order
is received until it is produced and shipped. By identifying the
bottleneck
operations that are constraining fast throughput, and discovering where
the
problems are, several solutions may be found.
Sometimes, it may be desirable to arrange the factory around the main
constraint
and balance production around the Takt time of the constraint. In other
cases, it may be desirable to increase the capacity of the constraint,
and
then test for adequate output. If output is inadequate, then the same
process
can be repeated for the operation that has become the new bottleneck.
Our Approach: Tools from a Toolchest
Rockford
Consulting Group applies concepts and technologies as the situation
warrants,
that will result in the ultimate benefit to our clients. We treat
strategies,
technologies, and methodologies as tools in a toolchest, and use them
when
they offer practical solutions and achievable results. We believe that
each
client situation is unique, with its own unique set of solutions. (Please see our
lean manufacturing consulting services Lean Manufacturing Consulting Services
)
Why Us?
Rockford Consulting Group can provide long-term assistance to many companies in a variety of industries. The firm has a cadre of the best management consultants in the world today, providing high quality professionalism through the use of experience and innovation.
We subscribe to the Institute of Management Consultants Code of Professional Conduct. All consultants engaged on projects adhere to its principles. Whenever possible we will use consultants certified in their particular specialty area. Certification assures that consultants have substantial prior experience in their specialty, and their competencies have been tested by the IMC, and verified by a number of clients. This assures our clients that we are assigning the highest qualified consultants in the profession.
We provide technical expertise, team facilitation, leadership, and direction in deciding how you will meet the challenge. We refer you to our Qualification Statement for further details on our background, areas of specialization, concepts and technologies applied, staffing, operating policy, approach, companies and industries served, case studies and references. Equally as important, we train our clients to sustain new methods of manufacturing and the consequential benefits over time. Your company will benefit directly from this training.
We have achieved an efficiency in our approach to assignments that allows us to provide high quality technical and managerial advice in a much shorter amount of time than could be accomplished years ago. We are able to do this because of the extensive consulting experience that each of our specialists has.
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