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The theory of constraint focuses its attention on constraints and bottlenecks within the organisation which hinder speedy production. The main concept is to maximize the rate of manufacturing output i.e. the throughput of the organisation.
This requires to examine the bottlenecks and constraints which are defined was: A bottleneck is an activity within the organisation where the demand for that resource is more than its capacity to supply. A constraint is a situational factor which makes the achievement of objectives/throughput more difficult then it would otherwise be.
Constraints may take several forms such as lack of skilled employees, lack of customers orders or the need to achieve a high level of quality product output. Using above definition, therefore, a bottleneck is always a constraint but a constraints need not be a bottleneck. Let the customers due date performance i.e. meeting the delivery schedule for customers orders is the major constraint in the organisation.
The bottleneck in such a case may be certain machine in the factory. Throughput thus related directly to the ability to cope with the constraint and to manage the bottleneck. This focus on throughput forced management to examine both the constraints and the bottleneck in order to increase throughput.
The objective of TOC is to increase throughput contribution while decreasing investments and operating costs. TOC considers a short – run time and assumes that operating costs are fixed costs.
The important concept behind TOC is that the production rate of the entire factory is set at the pace of the bottleneck resource. Hence, in order to achieve the best result TOC emphasises the importance of removing bottlenecks or limiting factor.
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