THEORY OF CONSTRAINTS (TOC)

Theory of Constraints (TOC)

Executive summary

Known as constraint analysis, theory of constraints (TOC) is a systematic and iterative approach to management that emphasizes adapting business practices in order to best cope with limitations, or constraints, that stand in the way of key objectives. The aim of TOC is to maximize the effectiveness of a method selectively at the most critical points and thereby maximize profitability, quality, or other business objectives. TOC is often mismatched with traditional cost accounting or margin assistance approaches to problem explaining, which, according to TOC proponents, may not really optimize earnings and the use of assets because they are inclined to have a unit focus rather than a system/process aim like TOC.

TOC is related to a broader set of management philosophies that focus on continuous improvement. W. Edwards Deming (1900-1993) was credited with revolutionizing business in Japan effectively introducing concepts of continuous improvement. Out of the teachings of Deming, management practices such as just-in-Time (JIT) manufacturing, total quality management (TQM), statistical process control (SPC) and the involvement of employees were created. While each of these philosophies have merit, its real benefits, measured over time, have generally been less than originally assumed. Introduction

The idea of Constraints (TOC) is a management beliefs developed by Dr. Eliyahu Moshe Goldratt. According to Goldratt the strength of any string of links, process, or scheme is reliant upon its weakest link. TOC is systemic and strives to recognise constraints to system success and to effect the changes essential to eliminate them. Dr. Goldratt and the TOC became widely known with the 1984 publication of Goldratt's novel The Goal (Bushong, 1999, 47).

History

In early 1979 Goldratt introduced manufacturing-based programming software known as optimized production schedules (OPT), as amended in 1982 for the optimized production technology. With the publication of the goal, Goldratt used his Socratic teaching style to educate the world about the management of bottlenecks (constraints) and new ideas on performance. The goal is a love story set in the manufacturing industry (three times revised) detailing the tribulations of a plant manager named Alex Rogo. Rogo is faced with closing its manufacturing plant hometown.

Goldratt uses Rogo situation to introduce their principles, which are not only in saving the plant Rogo, but also in saving the marriage of Rogo. Goldratt himself appears in the book as a character known as John, a professor at the University of Age Rogo.

Goldratt uses three additional novels to improve and develop the principles laid down in the goal. It's not luck, a sequel to The Goal, addresses the changing market and introduces a series of logical thinking methods are used to make decisions, solve problems and resolve conflicts. Critical Chain is a situation in which the principles of TOC are used effectively in project management. Necessary but not sufficient contains more holistic expression Goldratt's TOC and deals with the role of technology in organizations (Osten, 1996, 87).

Goldratt also produced a series of literary works do not defend their ...