1. “Theory of Constraints”
Abhishek Kapoor
Ankita Podder
Chandrima Roy
Sutanu Palodhi
Suvadip Ghosal
Sudipayan Basu
Application of TOC in improving competitiveness of an
organization
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2. Theory of Constraints (TOC)
• Developed by Dr. Eliyahu Goldratt, a Israeli physicist in the mid
1980’s with his business novel The Goal.
• Determines an element which limits the system progress and
suggest remedy for eliminating that element(Constraint).
• Views System as Chain.
• Drives manager to attack these constraints in order to reach the
company's primary goal i.e. to make profit.
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3. Constraints
• Anything that prevents the system from achieving more of its goal.
• Can be internal or external to the system.
CONSTRAINTS
Behavioral Managerial Logistical Capacity Market
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4. Steps of TOC
1. Identify the Constraint
2. Exploit the Constraint
3. Subordinate everything
to the Constraint
4. Elevate the Constraint
5. Repeat for the new
Constraint
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5. DBR Diagram
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6. Why TOC..??
Advantages
• Potential for productivity
enhancement
• Cost effective
• Non complex
• Immediate results
• Avoids build up of inventory.
• Avoids local optimization.
• Aids in process understanding.
• Improves communication
between departments.
• Improves capacity decisions in
the short run.
Disadvantages
• Difficult to master
• Identification of bottleneck
takes time.
• May lead organization away
from strategy.
• Ignores long run
consideration.
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