An overview of TOC – scope and limitation مقالة

The Theory of Constraints (TOC) is a systems approach based on the assumption thatevery organization has at least one factor that inhibits the organization’s ability to meet itsobjectives. The normal objective is to maximize profit. Hence, TOC emphasizes the maximization of profit by assuring that the factor that limits production is used mostefficiently. This theory was first described by E. M. Goldratt, and it has been used at three different levels: Production Management (To solve problems of bottlenecks), Scheduling, and Inventory Reduction.

"An overview of TOC – scope and limitation Farhad Farzad* Abstract The Theory of Constraints (TOC) is a systems approach based on the assumption thatevery organization has at least one factor that inhibits the organization’s ability to meet itsobjectives. The following example is based on an actual small business to describe and illustrate how applying the TOC can lead to decisions that improve company profitability [1; 13]. Determination of throughput per hour به تصویر صفحه مراجعه شود)) In Table 2, a comparison is made between the apparent profitability of the various equipments based on traditional contribution margin analysis, as well as, the constraint analysis. به تصویر صفحه مراجعه شود)) To perform the constraint analysis, the manufacturing department had to monitor their own time spent working on each type of equipment. Type 4 which had the highest contribution margin, ranked next to last based on throughput per labor hour, because it required the second highest amount of manufacturing time. Revised throughput per hour به تصویر صفحه مراجعه شود)) Sales and production records of the enterprise prior to performing the constraint analysis were not detailed enough to allow an accurate determination of the expected profit increase as a result of the proposed changes. These include: product (quality and engineering), price (higher margins and lower investment per unit), responsiveness (due- date performance and shorter quoted lead-time), maintaining the right amount of inventory, etc. Thinking for a Change: Putting the TOC Process to Use, The CRC Press Series on Constraints Management, 15."