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- 1. Introduction to Theory of Constraints Presented by Hasham Muhammed [email_address] 23rd September, 2008
- 2. Contents <ul><li>Introduction – The Philosophy </li></ul><ul><ul><li>Thinking Process </li></ul></ul><ul><ul><li>System’s Thinking </li></ul></ul><ul><ul><li>Goal </li></ul></ul><ul><ul><li>Concept of System Constraints </li></ul></ul><ul><ul><li>TOC intro </li></ul></ul><ul><ul><li>Steps in TOC </li></ul></ul><ul><ul><li>Example </li></ul></ul><ul><li>Conclusion </li></ul>23rd September, 2008
- 3. Do we really want or need another New Theory? 23rd September, 2008
- 4. Do we really want or need another New Theory? 23rd September, 2008 “ The significant problems we face today can not be resolved at the same level of thinking we were at when we created them.” - Albert Einstein
- 5. Thinking Process <ul><li>The process of how an entity learns to gain understanding of the environment or System </li></ul>23rd September, 2008
- 6. Thinking Processes 23rd September, 2008 <ul><li>The process of how an entity learns to gain understanding of the environment or System </li></ul><ul><li>The KEY focus being </li></ul><ul><ul><li>Thinking from a SYSTEM’s point of view </li></ul></ul>
- 7. <ul><li>A system is an entity which maintains its existence through the INTERACTION of its elements. </li></ul>System’s Thinking 23rd September, 2008
- 8. <ul><li>A system is an entity which maintains its existence through the INTERACTION of its elements. </li></ul>23rd September, 2008 The key point here is INTERACTION. System’s Thinking
- 9. <ul><li>A system is an entity which maintains its existence through the INTERACTION of its elements. </li></ul>23rd September, 2008 Cooking food is a good analogy – Final product is different from the individual ingredients The key point here is INTERACTION. System’s Thinking
- 10. The System’s Goal Why do Systems exist? 23rd September, 2008
- 11. The System’s Goal 23rd September, 2008 Why do Systems exist? <ul><ul><li>To achieve a “Goal” </li></ul></ul>
- 12. The System’s Goal 23rd September, 2008 Why do Systems exist? <ul><ul><li>To achieve a “Goal” </li></ul></ul><ul><ul><li>A result or achievement toward which effort is directed. </li></ul></ul>
- 13. Who gets to decide what the goal should be? The System’s Goal 23rd September, 2008
- 14. 23rd September, 2008 Who gets to decide what the goal should be? The System’s Goal <ul><ul><li>The Leader is responsible for the Goal </li></ul></ul>
- 15. 23rd September, 2008 Who gets to decide what the goal should be? <ul><ul><li>The Leader is responsible for the Goal </li></ul></ul>The System’s Goal <ul><ul><li>Everyone may be considered as a Leader of something (Whole Organization, Unit, Integrated Business, department, small team, life, career…) that is supported by a System </li></ul></ul>
- 16. Theory of Constraints is about Management 23rd September, 2008
- 17. <ul><li>The three important questions for a manager </li></ul><ul><ul><li>What is the Ultimate goal? </li></ul></ul><ul><ul><li>Where does he or she stand in relation to the goal? </li></ul></ul><ul><ul><li>The magnitude and direction of the change needed to move from the status quo to where he or she wants to be (the goal). </li></ul></ul>23rd September, 2008 Theory of Constraints is about Management
- 18. <ul><ul><li>“ Average managers are concerned with methods, opinions, and precedents. Good Managers are concerned with solving problems ” </li></ul></ul><ul><ul><li>- William Dettmer </li></ul></ul>23rd September, 2008
- 19. Concept of System Constraints 23rd September, 2008
- 20. Concept of System Constraints 23rd September, 2008 What keeps your system from doing better?
- 21. Concept of System Constraints 23rd September, 2008 What keeps your system from doing better? Is there something that is constraining your system from reaching its GOAL?
- 22. Systems as Chains <ul><ul><li>Assume the SYSTEM to be a chain with ‘n’ links and with a goal of transmitting force from end A to B . </li></ul></ul>23rd September, 2008 A B 1 2 3 6 5 7 4
- 23. Systems as Chains (cont..) <ul><li>Weakest link </li></ul><ul><ul><li>The link at which the system fails to achieve the goal is the weakest link. </li></ul></ul>23rd September, 2008 A B 4
- 24. Constraints and Non-Constraints 23rd September, 2008
- 25. Constraints and Non-Constraints 23rd September, 2008 <ul><li>There is only one CONSTRAINT in a system </li></ul><ul><li>at a given point of time </li></ul>
- 26. Constraints and Non-Constraints 23rd September, 2008 <ul><li>There is only one CONSTRAINT in a system </li></ul><ul><li>at a given point of time </li></ul>
- 27. Constraints and Non-Constraints <ul><ul><li>Nonconstraints are all the other links; ‘n-1’ </li></ul></ul>23rd September, 2008 <ul><li>There is only one CONSTRAINT in a system </li></ul><ul><li>at a given point of time </li></ul>
- 28. Strengthening the Chain 23rd September, 2008
- 29. Strengthening the Chain <ul><li>Where Should we focus our efforts? </li></ul>23rd September, 2008
- 30. Strengthening the Chain <ul><li>Where Should we focus our efforts? </li></ul>23rd September, 2008 Strengthen the weakest link
- 31. Core of TOC 23rd September, 2008
- 32. Core of TOC 23rd September, 2008 If you don’t impact the Constraint, you have no effect
- 33. Basic Questions for Managers <ul><li>What’s the desired standard of performance (System’s Goal ) </li></ul><ul><li>What to change? (Where is the constraint?) </li></ul><ul><li>What to change to? (What should we do with the constraint?) </li></ul><ul><li>How to cause the change? ( How do we implement the change?) </li></ul>23rd September, 2008 Note: These are system-level questions, not process-level
- 34. 23rd September, 2008 TOC- FIVE FOCUSING STEPS ( Which will Strengthen the Chain )
- 35. 23rd September, 2008 1 . Identify the Constraint 2 . Exploit the Constraint 3 . Subordinate everything to the Constraint 4. Elevate the Constraint 5 . Repeat for the new Constraint ‘ Beware’ of Inertia TOC- FIVE FOCUSING STEPS ( Which will Strengthen the Chain )
- 36. A Production Example 23rd September, 2008 A simple production System
- 37. TOC – Step 1 23rd September, 2008
- 38. <ul><li>Identify the Constraint </li></ul>TOC – Step 1 23rd September, 2008
- 39. TOC – Step 1 <ul><li>Identify the Constraint </li></ul>23rd September, 2008 Step C is the Constraint
- 40. TOC – Step 2 23rd September, 2008
- 41. <ul><li>Decide how to exploit the Constraint </li></ul>TOC – Step 2 23rd September, 2008
- 42. <ul><li>“ What can we do to get the most out of this constraint without committing to potentially expensive changes ?” </li></ul>TOC – Step 2 23rd September, 2008 <ul><li>Decide how to exploit the Constraint </li></ul>
- 43. TOC – Step 3 23rd September, 2008
- 44. TOC – Step 3 23rd September, 2008 <ul><li>Subordinate Everything to the constraint </li></ul>
- 45. TOC – Step 3 23rd September, 2008 <ul><li>Subordinate Everything to the constraint </li></ul>
- 46. TOC – Step 3 23rd September, 2008 <ul><li>Subordinate Everything to the constraint </li></ul>Capacity Increased at Step C
- 47. 23rd September, 2008 TOC – Step 4
- 48. 23rd September, 2008 TOC – Step 4 <ul><li>Elevate the Constraint </li></ul>
- 49. 23rd September, 2008 <ul><li>Elevate the Constraint </li></ul><ul><li>If we are doing Step 4, it means that Steps 2 & 3 weren’t sufficient to eliminate the constraint. </li></ul>TOC – Step 4
- 50. 23rd September, 2008 <ul><li>Elevate the Constraint </li></ul><ul><li>If we are doing Step 4, it means that Steps 2 & 3 weren’t sufficient to eliminate the constraint. </li></ul><ul><li>‘ Elevating’ the constraint means we take whatever action is required to eliminate the constraint. </li></ul>TOC – Step 4
- 51. 23rd September, 2008 TOC – Step 5
- 52. <ul><li>Go back to Step 1, But Beware of ‘ Inertia’ </li></ul>23rd September, 2008 TOC – Step 5
- 53. <ul><li>Go back to Step 1, But Beware of ‘ Inertia’ </li></ul><ul><li>Constraint shifted to a different place - Market </li></ul>23rd September, 2008 TOC – Step 5
- 54. Types of Constraints Internal External <ul><ul><li>Process constraints </li></ul></ul><ul><ul><ul><li>Machine time, etc. </li></ul></ul></ul><ul><ul><li>Policy constraints </li></ul></ul><ul><ul><ul><li>No overtime, etc. </li></ul></ul></ul><ul><ul><li>Material constraints </li></ul></ul><ul><ul><ul><li>Insufficient materials </li></ul></ul></ul><ul><ul><li>Market constraints </li></ul></ul><ul><ul><ul><li>Insufficient demand </li></ul></ul></ul>23rd September, 2008
- 55. 23rd September, 2008 1 . Identify the Constraint 2 . Exploit the Constraint 3 . Subordinate everything to the Constraint 4. Elevate the Constraint 5 . Repeat for the new Constraint ‘ Beware’ of Inertia TOC- FIVE FOCUSING STEPS ( Which will Strengthen the Chain )
- 56. Theory of Constraints ……a summary <ul><li>Understanding of the system is mandatory to improving it </li></ul><ul><li>Any system has a Goal </li></ul><ul><li>The Leader is responsible for the Goal </li></ul><ul><li>Theory of Constraints is about Leadership and Management </li></ul><ul><li>Every System has one and only one constraint at any instance of time </li></ul><ul><li>If you don’t impact the constraint then there is no effect on the system’s improvement </li></ul><ul><li>Improvement is a long term and continuous process </li></ul>…… Goldratt has used business novels to get his concepts across which can be grasped by people like us and practiced… 23rd September, 2008
- 57. Goldratt – TOC Bestsellers 23rd September, 2008
- 58. 23rd September, 2008 There is no such thing as staying the same. You are either striving to make yourself better or allowing yourself to get worse. - Source Unknown
- 59. 23rd September, 2008 The Logical Thinking Process – A systems approach to complex problem solving - H. William Dettmer References Thank You!

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