Theory of constraints

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Theory of constraints

  1. 1. Theory of Constraints By: Eka Darmadi L – 3094802 May Eka S – 3094814 Steven Auryn H - 3105812
  2. 2. Introduction What is TOC ?
  3. 3. Introduction • What is TOC ??
  4. 4. Introduction • TOC Focus on 3 Activities – Throughput – Inventory – Operating Expense
  5. 5. Introduction • In TOC we Increase – Throughput
  6. 6. Introduction • In TOC we Minimizing – Inventory
  7. 7. Introduction • In TOC we Decreasing – Operating Expense
  8. 8. Introduction • After we … Throughput Inventory Operating Expense
  9. 9. Introduction • After we … The Result … 1. Financial Performance Profit 2. Return on Investment 3. Cash Flow
  10. 10. Introduction • Traditional View point – Pressing in Increasing Throughput – Decreasing Operating Expense – Minimize inventory are not important
  11. 11. Introduction • TOC Recognize lowering Inventory Help: – Better Product – Lower Price – Responsiveness to Customer needs
  12. 12. TOC Steps (Preview Only)
  13. 13. TOC Step by Step • TOC Step: 1) Identify the organization Constraint(s) 2) Exploit the binding Constraint(s) 3) Subordinate everything (step 2) 4) Elevate the binding Constraint(s) 5) Repeat the process
  14. 14. TOC Step by Step 1. Identify the organization Constraint(s) – External Constraints – Internal Constraints – Loose Constraints – Binding Constraints
  15. 15. TOC Step by Step 2. Exploit the binding Constraint(s)
  16. 16. TOC Step by Step 3. Subordinate everything (step 2) “We are no longer think about efficiency” “Assume that the grinding process by the maximum of it’s capacity” it will add number of work in process to the drilling process, since the capacity of processing in the drilling process is lower than the grinding process.
  17. 17. TOC Step by Step 4. Elevate the binding Constraint(s) “We Try to continue to improve” “Adding more production can be solved by adding more shift in the drilling process.”
  18. 18. TOC Step by Step 5. Repeat the process “Try to evaluate the whole process” “Because the TOC objective is to continually improve the performance by manage the constraint”
  19. 19. TOC Illustration of Constraints (Video)
  20. 20. Illustration of “Constraints”
  21. 21. Theory of Constraints Case Study
  22. 22. Background
  23. 23. Background • Founded in :1970 • Company Type : Manufacturing • Product : Semiconductor, Fiber Optic, Fiber Cable.
  24. 24. The Problem 1. How Lucent become more productive ? 2. How Lucent improve their performance ? 3. How Lucent can Increase their profit ?
  25. 25. Case Study Problem Simulation
  26. 26. TOC Implementation Source: Tocca.com
  27. 27. TOC Implementation
  28. 28. TOC Implementation
  29. 29. TOC Implementation
  30. 30. TOC Implementation
  31. 31. TOC Implementation
  32. 32. TOC Implementation
  33. 33. TOC Implementation
  34. 34. TOC Implementation
  35. 35. TOC Implementation
  36. 36. TOC Implementation
  37. 37. TOC Implementation
  38. 38. TOC Implementation
  39. 39. TOC Implementation
  40. 40. TOC Implementation Step 1: Identify Constraints
  41. 41. TOC Implementation Step 2: Squeeze or exploit the constraint
  42. 42. TOC Implementation Step 3: Subordinate to the constraint “Remove all excessive WIP”
  43. 43. TOC Implementation Step 3: Subordinate to the constraint
  44. 44. TOC Implementation Step 4: Elevate the constraint
  45. 45. TOC Implementation Step 5: Repeat the process
  46. 46. TOC Implementation After Implementing TOC Throughput from : 10 / Day Become : 14 / Day
  47. 47. TOC Result “Lucent” 1. The Product can developed twice Fast 2. The Project can be completed on time 3. Increase in profit
  48. 48. TOC Summary
  49. 49. TOC Summary –“Theory of Constraints” (TOC) is good theory for factory . –TOC main idea is buffer and rope
  50. 50. Question and Answer
  51. 51. Thank You For Your Attention

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