theory of constraints
TRANSCRIPT
M. S. Ramaiah School of Advanced Studies 1
Theory of Constraints
Module Leader :Asst Prof K.N.GanapathiAsst. Professor, MSRSAS, Bangalore
G.Prabu K.Sathish BabuBUB0910004 BUB0910006 M. Sc. (Engg.) in EMM
Production Planning and Control
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Theory of Constraints
Aim : To get an idea of the term “Theory of constraints” which
commonly used in Manufacturing industries now a days
Objectives :• Introduction to the topic “Theory of constraints”.
• Analysis of the topic with a relevant data.
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TOC Introduction
Theory of constraints is an overall management philosophy
developed by the Eli-Gold ratt in his book titled “The goal”
it is geared to help organizations to achieve their goal
Continuously
This is also called Optimized Production Technology, which
revolves around the concept of bottlenecks
Bottleneck is a resource whose cap greater than demand
downstream
Non-bottleneck is a resource whose cap less than demand
downstream
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Theory of Constraints
Any system can produce only as much as its critically
constrained resource
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DrumBufferRope
Five Focusing Steps
TOC Production Approaches
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Theory of ConstraintsFive Focusing Steps Identify the bottleneck or constraint
Exploit the bottle neck
Subordinate everything else to the bottle neck
Elevate the bottle neck
Evaluate whether solving the current bottle neck
Drum-Buffer-Rope – 3 elements of the solution The drum or constraint or weakest link, the buffer or material
release duration, and the rope or release timing.
To protect the weakest link in the whole system, by
eliminating by process dependency and variations.
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TOC is about identifying the most significant constraint
in a system and removing this constraint.
A constraint in terms of TOC is a bottleneck. Think of
TOC in terms of a car which is going to be used for a race.
We buy a regular road car and want to get it on the track to
race.
The objective of the race is to complete 20 laps of the track in
as short a time as possible.
TOC Illustration
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The constraints are listed:
Constraint 1. The car is reliable and works fine. However, engine
parts are expensive when required.
Constraint 2. The car needs to be registered to race. Without
registration, it can’t even go on the track.
Constraint 3. The car needs to be repainted. The sponsors require
red paint within a year or they will withdraw
the sponsorship.
TOC Illustration
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Constraints 1 and 3 don’t prevent the car from racing.
However, constraint 2 means the car can’t race at all.
According to TOC, the ‘most severe’ constraint should be
eliminated
Therefore, address Constraint 2 first (i.e. get the car registered)
Once, Constraint 2 has been eliminated, there will be a new
‘most severe’ constraint.
Repeat the process of identifying & eliminating the constraint
Every time we eliminate the most severe constraint we improve
the quality and performance of the system.
TOC Illustration
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Recognize the bottleneck operation and determine the
throughput contribution in the whole system.
Find the bottleneck operation by identifying operations with
large quantities of inventory operations.
Keep the bottleneck busy and subordinate all non -
bottleneck operations to the bottleneck operations.
Take actions to increase bottleneck efficiency and capacity
4 Steps to Managing TOC
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TOC 7 key Principles
Balance /optimise the FLOW, not maximise capacity.
Utilisation & activation of a resource are not synonymous.
Bottlenecks govern both throughput & inventories.
The size of transfer batch need not be equal to process batch.
An hour lost at the bottleneck is an hour lost for the entire
system.
The bottleneck & Processes lying downstream are forward
scheduled, from the present to finite cap.
Lot sizes should be varied depending on components so as to
achieve a smooth and timely flow of material to customer.
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TOC - Advantages
Improves capacity decisions in the short-run
Aids in process understanding
Avoids local optimization
Improves communication between departments
Reduction in inventory
More productive machine and more flexible
Ability to meet shorter lead time
Better customer service and relationship
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Negative impact on non-constrained areas
Ignores long-run considerations
May lead organization away from strategy
Not a substitute for other accounting methods
Temptation to reduce the capacity
TOC - Disadvantages
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Conclusions
TOC was originally designed for improving manufacturing
processes. However, it has been adapted and successfully used
in many industries including; Marketing, Service Industries and
Information Technology.
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1. Author unknown, Theory of Constraints , http://en.wikipedia.org/wiki/Theory_of_Constraints, retrieved on 29 th March 2011
2. Author unknown, Theory of Constraints, http://www.wepapers.com/Papers/113031/Theory_of_Constraints.ppt, retrieved on 29th March 2011
3. Author unknown., Theory of Constraints, www.linkedin.com/answers/business-operations/project-management/OPS_PRJ/680734-5146643,retrieved on 29th March 2011
4. Asst prof K.N.Ganapathi, Production Planning and Control , Course Notes, M.S. Ramaiah School of Advanced Studies, Bangalore, March 2010.
5. Author unknown., Theory of Constraints, http://www.12manage.com/methods_goldratt_theory_of_constraints.html , retrieved on 01st April 2011
References
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