The constraints of theory: What is the impact of the Theory of Constraints on Operations Strategy?

Abstract

Although previous studies have advanced understanding on about the effects of the Theory of Constraints (TOC) in different areas in Operations and Supply Chain Management (OSCM), a relevant knowledge gap still remains concerning how the TOC elements impact the main competitive dimensions of operations strategy, and how they can be applied to influence the strategic priorities of the firm. In order to fill this knowledge gap, in this paper, we extended the operations strategy to the TOC context to examine with more precision the influence of TOC elements upon the competitive priorities high speed, on-time delivery, high flexibility, low cost, and high quality. A multi-method approach was adopted, combining both qualitative and quantitative approaches. Findings suggest that the primary competitive dimensions leveraged by TOC elements are on-time delivery and high speed, followed by high flexibility. Also, primarily, Scheduling Process (DBR and S-DBR), Critical Chain Project Management, TOC Replenishment for Distribution and Dynamic Buffer Management influence the competitive dimensions with different intensity levels and overlaps. The first contribution of this paper is in offering a better comprehension of the significant overlaps existing between various TOC elements and their simultaneous influence on firm's operational performance. Second, we provide prescriptive strategies to firms for prioritising managerial efforts and resources while implementing TOC elements, in isolation or combined with other management philosophies. Third, the paper enhances understanding of how to improve decision-making and to manage conflicting strategic objectives affecting the firms’ competitiveness. The added value and originality of this paper is in (i) minimising the lack of knowledge regarding whether and how TOC elements affect the competitive priorities in operations strategy; (ii) enable decision-makers to evaluate their continuous improvement initiatives adopted as part of the operations strategy and, eventually, select other managerial philosophies to enhance the competitive dimensions and operational performance; (iii) enable a better organisational design, attenuating the trade-offs among conflicting strategic objectives in OSCM.