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# Theory of Constraints Sim

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Systems dynamic model testing the Theory of Constraints

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### Theory of Constraints Sim

1. 1. A Dynamic Simulation of the Theory of Constraints by Dave Guggenheim
2. 2. Preface • Systems dynamic models originated at MIT • Jay Forrester developed the concept • Richard Bennett created the first software • John Sterman wrote the business text Stock Flow
3. 3. The Model Before ToC 16,800 once per week Randnorm(200, 5) per hour Randnorm(500, 50) per 8-hour shift 10 workers @ 50 units per shiftRandnorm(99, 5) per hour Randnorm(1, 5) per hour Randnorm(80, 10) per hour Randnorm(150, 5) per hour 2,400 once per day 50% of failures per 4 hours
4. 4. Inbound Logistics
5. 5. Pre-Production
6. 6. Production
7. 7. Production Testing
8. 8. Production Finishing
9. 9. Outbound Logistics Average Throughput = 11,000 units per week Shipping Capacity = 16,800 units per week
10. 10. The Model After ToC 16,800 once per week Randnorm(200, 5) per hour Randnorm(800, 80) per 8-hour shift 16 workers @ 50 units per shiftRandnorm(99, 5) per hour Randnorm(1, 5) per hour Randnorm(80, 10) per hour Randnorm(150, 5) per hour 2,400 once per day 50% of failures per 4 hours
11. 11. Inbound Logistics
12. 12. Pre-Production
13. 13. Production
14. 14. Production Testing
15. 15. Production Finishing
16. 16. Outbound Logistics Average Throughput = 13,500 units per week Shipping Capacity = 16,800 units per week
17. 17. In Conclusion • The Theory of Constraints is as real as 3.1415926535… • Bottlenecks constrain throughput like a stomach stapling. • Bottlenecks require a tradeoff. • Operating Expense for Inventory and Revenue • Bottlenecks migrate like a moose in rut. • Keeping tight control over production requires special tactics and people (Jet Li Six Sigma Black Belt Sensei).