theory of constraints
DESCRIPTION
Report about " Theory of Constraints".TRANSCRIPT
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THEORY OF CONSTRAINTS
Prepared By:MONZALES, MARIBEL T.
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THEORY OF CONSTRAINTS• It was created by Dr Eli Goldratt and was
published in his 1984 book "The Goal."• A methodology for identifying the most
important limiting factor.• An organizational change method that is
focussed on profit improvement.•The theory says that every system, no
matter how well it performs, has at least one constraint that limits its performance – this is the system's "weakest link.
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THEORY OF CONSTRAINTS
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CONCEPT OF CONSTRAINTS
Big Question!Is there something that is constraining your project from reaching its GOALS?
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SYSTEMS AS CHAINS
Assume a system to be a chain with a goal of transmitting force from A to be.
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SYSTEMS AS CHAINS
WEAKEST LINK The link at which the system fails.
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STRENGTHENING THE CHAINWhere should we focus our efforts?
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THROUGHPUT, INVENTORY &OPERATING EXPENSE
Goldratt created a simple relationship chart between three system-level measurements: throughput, inventory & operating expense.
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Given Goldratt’s three dimensions, organizations have three different options for system improvement: increasing THROUGHPUT, reducing INVENTORY or reducing OPERATING EXPENSE.
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The potential for increasing THROUGHPUT tend to be much higher than the potential for decreasing INVENTORY AND OPERATING EXPENSE. Therefore, a basic model for system improvements focuses on increasing THROUGHPUT and making reduction of INVENTORY and OPERATING EXPENSE a secondary priority , as shown below.
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THEORY OF CONSTRAINTS
EXAMPLES:Machine/equipmentManpowerResourcesProcessNo overtimeInsufficient materialsInsufficient demand
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APPLYING THE THEORY
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APPLYING THE THEORYStep 1: Identify the ConstraintThe first step is to identify your weakest
link – this is the factor that's holding you back the most.
INTERNALProcess Constraints-Machine-Equipment
Policy Constraints-No overtime
EXTERNALMaterial Constraints-Insufficient Materials
Market Constraints-Insufficient Demand
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APPLYING THE THEORY
As a numerical example , consider the operation producing product in the figure.
QUESTION:
Which process has the constraints?
PROCESS 1Capacity= 5 per hour
PROCESS 3Capacity=4 per hour
PROCESS 4Capacity=9 per hour
PROCESS 2Capacity=7 per hour
CONSTRAINT
INPUTS
OUTPUTS
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APPLYING THE THEORYStep 2: Exploit the constraints Find methods to maximize the utilization
of the constraints towards productive throughput.
For example, in many operations all processes are shut down during lunchtime or during breaks.
If a process is a constraint, the operation should consider rotating lunch periods so that the constraint is never allowed to be idle.
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DECIDE HOW TO EXPLOIT THE CONSTRAINTS
QUESTION:WHAT CAN WE DO TO GET THE
MOST OUT OF THIS CONSTRAINTS WITHOUT COMMITTING TO POTENTIALLY EXPENSIVE
CHANGES?
INPUTS
OUTPUTS
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APPLYING THE THEORYStep 3: Subordinate and synchronize
to the constraints“SUBORDINATE EVERYTHING TO THE
CONSTRAINTS”
OUTPUTS
INPUTS
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APPLYING THE THEORY“SUBORDINATE EVERYTHING TO THE
CONSTRAINTS”
PROCESS3Capacity=6 per hour
Capacity Increased at Process
3
OUTPUTS
INPUTS
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APPLYING THE THEORY
Step 4: Elevate the performance of constraint
“ELEVATING” the constraint means we take whatever action is required to eliminate the constraint.
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APPLYING THE THEORY
Step 5: Repeat the process
PROCESS 1Capacity=5 per hour
PROCESS 2Capacity=7 per hour
PROCESS 3Capacity=6 per hour
PROCESS 4Capacity=9 per hour
THE CONSTRAINT
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APPLYING THE THEORY
Step 5: Repeat the process
Go back to step 1, but beware of inertia.
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THANK YOU!