Theory Of Constraints Approach Research Articles

Analysis of the Optimal Number of Workforce Using the Theory of Constraints Approach in UKM Weeka Wedang Uwuh

The increasing demand for wedang uwuh during the pandemic requires Weeka Wedang Uwuh as a producer to be quick and responsive in meeting demand. Competition for sales of wedang uwuh is currently quite tight because there are more and more wedang uwuh producers. One way to anticipate current business competition, especially in the herbal beverage industry, is to try to manage the resources owned by SMEs, including labor. The right number of workers will guarantee product availability and also provide minimum costs for labor costs. This research aims to provide suggestions for determining the optimal number of workers in order to minimize labor costs. ToC is a problem solving approach that focuses on eliminating constraints using available methodologies. Therefore, this approach is very suitable for eliminating obstacles at Weeka Wedang Uwuh in order to determine the optimal number of workers. To support the TOC approach, the Dynamic Program method will be applied to the obstacle removal step. The optimal number of workers in UKM Weeka Wedang Uwuh will be obtained by reducing 5 (five) workers in the Wedang Uwuh packing section. The savings that occurred during the research time period were Rp. 21,500,302.00 compared to expenses if it had the current number of workers.

Justice in time: A theory of constraints approach

AbstractIf there is some truth to the adage that justice must not only be done, but must be seen to be done, then surely it must be seen to be done in a timely manner. Yet court congestion and delays – which threaten to undermine the justice system – have become global phenomena with significant adverse implications for social welfare, economic development, and civil rights. This work describes an application of the Theory of Constraints (TOC) to the judicial system for the purpose of designing an intervention to alleviate court congestion – an intervention that won the 2012 Goldratt Foundation New Knowledge Award. In cooperation with the Jerusalem District Court in Israel, the judicial process was reviewed through the lens of TOC, and a set of operational changes was implemented to reduce case processing time. Data collected before and after this intervention indicate the potential of achieving lead‐time reduction by applying TOC to judicial environments.

Determining the optimal product mix in multiple constraints manufacturing environment: an application in the textile industry

Theory of constraints (TOC) is an approach to production planning and control by focusing on the constraints of an organization to increase throughput by effectively managing constraints. TOC approach has been applied in many sectors, and efficient results have been taken. One of the application areas of TOC is product mix decisions. Product mix decisions are important for multi-product manufacturing systems because they affect the performance measures of the companies. This study aims to present how TOC is applied to determine the optimum product mix in a multiple- constraint environment in the textile industry. To achieve this, we first select three basic products of a textile company and examine the production processes of these products from TOC perspective. Next, we perform a bottleneck process and identify three bottlenecks for the problem. Then, based on our bottleneck process results, we generate three scenarios. Upon assessing these scenarios, we determine the most appropriate product mix by implementing the TOC approach. Finally, we employ a goal programming approach to solve the product mix problem and compare its results with those obtained by the TOC.

Commercialization Inabilities of Rural Value Chain Activities in Emerging Markets: The Theory of Constraints Approach

Why value chain activities of rural economies in emerging markets are not commercial? Carpenters in rural Tanzania have been working hard to improve their lives, but they remained poor as they cannot create value for customers and capture a sizable value from the activity. This qualitative case study uses the Theory of Constraints to detect the limiting factors for the commercialization abilities of carpenters in rural Tanzania. Access to finance and basic amenities, technology, business management skills, business attitude, and commitment are the weakest links that limit the ability of carpenters to commercialize their activities. Enhancing technology adoption, building business attitude, culture and skills for rural carpenters is important to commercialize carpentry activities in emerging markets. Linking the Theory of Constraints and the Value Chain theory in management sciences sets an empirical suggestion to commercialize rural economies in emerging markets. Commercialization of rural value chain activities can be done by changing the firms’ abilities to create value to potential customers and capture value from the activity.

A lean view of lean

A lean view of lean

Integrating DMAIC approach of Lean Six Sigma and theory of constraints toward quality improvement in healthcare

Healthcare is a unique service industry and it deals with complex tasks. To overcome complex tasks, healthcare organizations need to implement DMAIC (Define, Measure, Analyze, Improve, Control) approach of Lean Six Sigma (LSS) to improve quality performance. Application of DMAIC in a healthcare organization provides guidelines on how to handle a quality service system toward patient satisfaction. This approach also helps healthcare service providers to reduce waste, variation and work imbalance in the service processes. This chapter discusses five phases of DMAIC approach and its integration with the theory of constraints (TOC) for continuous improvements in healthcare performance. The integration of TOC and DMAIC approach would enhance healthcare performance by reducing medical costs, medical errors, administration errors and defects. Moreover, this integration can improve performance in healthcare service processes where it is not possible to reduce bottlenecks.

Chain substitution and successive approximation method: Throughput analysis at SMEs

The purpose of this research work is to illustrate that using the logic of theory of constraints (TOC) concerning the Throughput is adequate in management decisions to improve performance in the context of small and medium enterprises. The TOC approach assumes the use of Throughput as an indicator of performance, and in this paper the method of chain substitution and successive approximation is proposed to analyze this indicator. After the implementation of the Throughput per hour analysis, the owner-manager changed her perspective about what her priorities should be in the exercise of the administrative process. The identification of the restriction of what prevented him from obtaining more money allowed him to make the decisions or courses of action that maximized the Throughput per hour, thus improving his performance as owner-manager, the performance of his enterprise and the economic situation of his employees. The originality of this article consists in the application of TOC approach through the design of the indicator Throughput per hour to analyse the performance of an entrepreneur and the application of the chain substitution and successive approximation method for the study of the restrictions that inhibit it.

Can TOC be the catalyst for lean implementation? A case investigation

The objective of the paper is to investigate the potential of integrating lean philosophy with Goldratt's theory of constraints (TOC) to improve operational performance in an auto component manufacturing firm. This paper proposes an integrated lean philosophy-TOC framework and its case application to enhance operational performance in an auto component manufacturing firm. Case study results indicate that the company benefited from its emphasis on operational performance enhancement by the TOC concept. Managers were able to select a continuous improvement (CI) project that had a greater impact on the bottom line performance. On the other hand, lean philosophy provided seven wastes identification and reduction techniques, to enhance customer value as well as to optimise utilisation of available resources. Further empirical investigation and robust model development on TOC-based lean implementation will guide lean practitioners to leverage lean advantages which can further be improved by integrating with other CI techniques. Integration of lean manufacturing philosophy and TOC can provide managers with an effective platform for two CI techniques to work together and create great energies. The paper reveals a typical case of a journey of enhancing operational performance by adopting lean philosophy with initiations of TOC approach.

Can TOC be the catalyst for lean implementation? A case investigation

The objective of the paper is to investigate the potential of integrating lean philosophy with Goldratt's theory of constraints (TOC) to improve operational performance in an auto component manufacturing firm. This paper proposes an integrated lean philosophy-TOC framework and its case application to enhance operational performance in an auto component manufacturing firm. Case study results indicate that the company benefited from its emphasis on operational performance enhancement by the TOC concept. Managers were able to select a continuous improvement (CI) project that had a greater impact on the bottom line performance. On the other hand, lean philosophy provided seven wastes identification and reduction techniques, to enhance customer value as well as to optimise utilisation of available resources. Further empirical investigation and robust model development on TOC-based lean implementation will guide lean practitioners to leverage lean advantages which can further be improved by integrating with other CI techniques. Integration of lean manufacturing philosophy and TOC can provide managers with an effective platform for two CI techniques to work together and create great energies. The paper reveals a typical case of a journey of enhancing operational performance by adopting lean philosophy with initiations of TOC approach.

Application of the Theory of Constraints in Supply Chain

Good management is the process of finding permanent solutions to the dilemma of balance and achieving effectiveness and efficiency, differentiation and low costs, financial goals and long-term vision, consistency and flexibility. Modern approach corporate governance requires a new understanding of management in relation to one of its internal and external elements. The paper deals with the application of the Theory of Constraints in the environment of Supply Chain. The main goal is to present the Theory of Constraints approach with basic five steps focusing process in the area of the supply chain management. Specifically it shows how the TOC can be used in many others areas of application.

Implementing an integrated ABC and TOC approach to enhance decision making in a Lean context

Purpose – The purpose of this paper is to implement an integrated activity-based costing (ABC) and theory of constraints (TOC) approach to enhance decision making in a Lean company. Design/methodology/approach – Based on the literature, this paper proposes an integrated ABC and TOC approach and applies it to a Lean plastic manufacturing company to improve its product-mix decision. Findings – The results of the case study show that the current conventional product-mix decision used by the company and the proposed integrated approach can give significantly different results concerning the optimal product-mix and the associated bottlenecks. Moreover, the paper suggests that managers who implement Lean production without utilising a supportive management accounting system may experience disappointing financial results. Research limitations/implications – The validation of the suggested method is based on a single case study with an action research approach. For future research, the authors suggest the implementation of the approach in different industries. Practical implications – Overall, the integration of ABC and TOC provides managers with an accurate, timely and reliable tool that can help in making decisions about pricing, production line development, process improvements and product-mix. Originality/value – This paper contributes to Lean and management accounting literature by demonstrating the value of a method of integrating ABC and TOC. Also a case study is chosen for the empirical aspect of the study as there are no case studies available in the literature that illustrate a real life case of integrating ABC and TOC within Lean companies as an alternative to the current used cost accounting systems.

Application of the Theory of Constraints (TOC) to Batch Scheduling in Process Industry

This paper presents a practical daily batch scheduling problem at one leading global food company for multi-stage, multi-batch scheduling with no-wait. After investigated different approaches of both traditional optimization and simulation technique, the concept of the Theory of Constraint (TOC) was adopted to identify the bottleneck activity first, then the problem was converted from a multi-product batch scheduling to a multi-project critical chain based scheduling, and the scheduling technique of Drum-buffer-rope (DBR) in TOC was specifically adopted to solve the company’s routine scheduling problem. With the help of professional computer software and customized output, it is very efficient and effective for the daily scheduling personnel to operate due to no complicated algorithm or programming involved. This new TOC approach has been implemented in its several plants in headquarter and is expected to expand to other plants.

What's Constraining Your Innovation?

OVERVIEW:Leaders regularly need more from their innovation investment while technology and marketing groups are already stretched too far. Although the typical response to this dilemma is to add process (and the attendant bureaucracy) or to teach project and time management skills, these approaches often just end up with people running faster on the same treadmill. The answer lies in the more subtle direction of the Theory of Constraints (TOC)—a tool that has historically been used to help manufacturing operations identify and eliminate bottlenecks. This approach enables innovators to rapidly improve their growth results while gradually creating a culture of continuous innovation improvement. Whether in consumer or industrial markets, whether in products or services, a TOC approach works with the current process to find the innovation bottleneck—the constraint that is holding back all the other steps in the process. Then five focusing steps are used to rigorously eliminate that constraint and move on to the next with an increase in innovation throughput as each cycle of improvement is completed.

Exploring Problems and Undesired Effects in the Construction Development Process: The Case of a Small- to Medium-Sized Developer in Taiwan

This study explored the construction development process of an individual case to identify and summarize the problems small- to medium-sized developers could be having with such process in Taiwan. To identify the problems, the writers used a case-based approach and interviewed the chairman of one small- to medium-sized enterprise (SME). Findings derived from the interview were validated by further interviewing four members of the construction union in Taiwan, three government officials, and four managers of mortgage banks. The theory of constraints approach was used to examine the construction development process of the SME and indicate the undesirable effects that hindered it and needed immediate attention. The study results were systemized into a conceptual model for developers’ future reference to improve management of the development process and identify the root causes of problems.

Managing a community mental health agency: A Theory of Constraints based framework

The Theory of Constraints (TOC) is a powerful new management philosophy that recognizes system constraints limit the performance of a system and proposes a set of concepts to manage the constraints. TOC management philosophy (i) suggests the goal of an organization is to make money without violating certain necessary conditions such as customer satisfaction and employee satisfaction and security; (ii) proposes three performance measures: throughput, inventory, and operating expenses; and (iii) improves the process by focusing improvement efforts on its weakest link or constraint. Although originally developed for manufacturing operations, TOC appears to be equally applicable to service operations, including health delivery systems such as Community Mental Health Centres (CMHCs). In this article, we report on a TOC-based operations analysis of a Chemical Dependency (CD) unit within a Midwest community mental health system and implementation of recommended changes. TOC performance measures encourage finding innovative ways of increasing throughput and reducing inventory instead of simply cutting or containing costs for the CD Unit. The TOC-based improvement process, using the Five Focusing Steps, reveals multiple physical and policy constraints within both the CD Unit and the agency as a whole. Based upon this analysis, we offer specific recommendations that should significantly improve resource utilization, revenues, patient care, and employee satisfaction. Most of these recommendations require little or no net costs to implement. By using the TOC approach outlined in this article, other CMHCs and health delivery systems can realize similar benefits.

A Theory of Constraints approach to interorganizational systems implementation

Interorganizational systems (IOS) may provide substantial benefits, however many organizations are reluctant to implement them. This empirical research takes a novel approach and develops a model of IOS feasibility, which is based on the Theory of Constraints (TOC). It introduces the notion of maximal infeasibility, which is the highest among the values of five factors: economic infeasibility, organizational infeasibility, technological infeasibility, risks, and lack of financial resources. The highest value was selected because implementation is hindered even if only one of the feasibility requirements is not fulfilled. Data collected from 139 medium and large Israeli business organizations validated the model, and indicated that strategic motivation is the main driving force for an organization to initiate or to join an IOS, while the main barriers are organizational infeasibility issues such as lack of management support or uninterested potential partners. Adopting a TOC approach to IOS implementation may assist organizations to overcome these obstacles and increase the chance of a successful implementation.

Who Wins in a Dynamic World: Theory of Constraints Vs. Activity-Based Costing?

Two system-based views exist regarding managerial value chain analysis: Theory of Constraints (TOC) and Activity-Based Costing (ABC). There has been considerable debate whether TOC or ABC is the more optimal approach for strategic planning. This study seeks to compare TOC and ABC, while keeping constant the level of environmental turbulence each of the approaches encounter. With regard to organizational systems, literature regarding complex adaptive systems supports the idea that bottom-up approaches are more resilient to volatility. Consequently, this study hypothesizes that the bottom-up ABC approach will prove more agile and less limiting than the top-down TOC approach. This study then performs two computational experiments. The first experiment reveals that the ABC approach generated more PROFIT than the TOC approach, while the TOC produced a larger amount of REVENUE, for all instances of the simulation. The second experiment reveals that a hybrid TOC+ABC approach is the most optimal in the midst of environmental turbulence out of four possibilities. This hybrid TOC+ABC selects a first cut of orders that will generate the highest REVENUES per the TOC approach, and then selects a second cut of orders that will have the lowest COSTS and thus the highest PROFIT per the ABC approach. These results challenge the established literature espousing the TOC approach alone.

Project management applications of the theory of constraints beyond critical chain scheduling

The application of the Theory of Constraints (TOC) is an approach that can be used to develop a variety of management techniques. As a result of the multi-disciplinary nature of project management a variety of different applications within project management are possible. The application of the TOC approach to project scheduling led to the development of the “critical chain” technique that has been the subject of discussions in literature. This paper explains why TOC was initially applied only to project scheduling. A second application of TOC is to manage resources shared by a number of concurrent projects. The basic principles of this second application are discussed in this paper. In addition to the above-mentioned two applications the TOC approach can also be applied to other areas of project management such as project cost management and project risk management.

Synergies from spreadsheet LP used with the theory of constraints—a case study

This paper describes a case study relating to a food-processing plant. The methods used to address the case include spreadsheets combined with Goldratt's Theory of Constraints (TOC), both of which are accessible to practising managers. The paper demonstrates how standard spreadsheet optimisation tools can be used in combination with a TOC framework to provide effective decision aids. The results from the case study indicate real productivity improvements are possible from even small models of a situation. The paper explores the interrelationships and complementaries between Linear Programming and Theory of Constraints frameworks, and details the steps involved in using them in combination. We argue that traditional LP practice should be modified in light of the ease with which LPs can be solved, and suggest that the Theory of Constraints approach provides a useful framework to guide LP use. We share some of the insights gained both by the analysts and by the company.

A comparative study of line design approaches for serial production systems

Over the past decade two approaches, just‐in‐time (JIT) and theory of constraints (TOC), for designing and operating production lines have developed, each claiming to be the “correct” way. In addition there are still those who maintain that line balanced (whenever possible) is the optimal method. This study uses simulation to compare each of these approaches for designing and operating production lines under various levels of processing time variability, station downtime, and total system inventory. Not surprisingly, the JIT approach appears to work best when system variability is low. The TOC approach works best when system variability is high. This shows that lines designed using TOC principles perform significantly better than JIT lines when inventory is low, and JIT lines perform significantly better than TOC lines as inventory is added to the system. The traditionally balanced line did not perform best under any of the conditions used in this study.