Implementing the Theory of Constraints (TOC) In Production
Sai Praveen – D 23
Sumit Nandal – D 27
Theory of Constraints was developed
and popularized by Eliyahu Goldratt.
TOC, as it is commonly called, recognizes
that organizations exist to achieve a
A factor that limits a company's ability to
achieve more of its goal is referred to as a
The demand for parts produced by a
computer-controlled piece of equipment
known as the NCX10 exceeded the
Since the factory could only assemble and
sell as many products as they had parts from
The capacity of the factory to make money
was tied directly to the output of the NCX10.
The NCX10, therefore, was the constraint.
Five step process
manage constraints ,Goldratt proposes
a five-step Process Of On Going
Improvement. The steps in this process
Go back to Step 1
In order to manage a constraint, it is first necessary
to identify it.
In the above example, the NCX10 was identified
as the constraint.
This knowledge helped the company determine
where an increase in "productivity" would lead to
Concentrating on a non-constraint resource
would not increase the throughput because there
would not be an increase in the number of
To increase throughput, flow through the
constraint must be increased.
the constraint is identified, the next step is to
focus on how to get more production within the
existing capacity limitations.
when the company and the labor union agreed to
stagger lunches, breaks, and shift changes so the
machine could produce during times it previously
This added significantly to the output of the NCX10,
and therefore to the output of the entire plant.
To manage the output of the plant, a schedule was
created for the constraint. The schedule showed
the sequence in which orders would be processed
and their approximate starting time.
Exploiting the constraint does not ensure that
the materials needed next by the constraint
will always show up on time.
subordination is to control the way material is
fed to the non-constraint resources.
TOC says that non-constraint resources should
only be allowed to process enough materials
to match the output of the constraint.
The release of materials is closely controlled
and synchronized to the constraint schedule
The next step is to determine if the output of the
constraint is enough to supply market demand. If
not, it is necessary to find more capacity by
"elevating" the constraint.
In the above example, schedulers were able to
remove some of the load from the constraint by
rerouting it across two other machines.
They also outsourced some work and brought in an
older machine that could process some of the parts
made by the NCX10.
These were all ways of adding capacity, or
elevating the constraint.
5. Go Back to Step 1
the output of the constraint is no
longer the factor that limits the rate of
fulfilling orders, it is no longer a constraint.
Step 5 is to go back to Step 1 and identify
a new constraint -because there always is
enterprise is the company producing
Production process was monitored without and
then with using Theory of Constraints for production
Current method of production
planning and control
company schedules individual job
orders generally according to delivery
In this example, scheduling problem was solved by
using TOC principles. It was proven that TOC can
help to solve major problems with capacity
planning in discrete batch production and reduce
number of delayed orders