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Presented by-

Wagh Sandeep Baburao

MTech 2nd Sem
Industrial Management
The Theory of Constraints is based on
the premise that
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þEvery real system, such as a business, must have

within it at least one constraint. If this were not the

case then the system could produce unlimited amounts

of whatever it was striving for, profit in the case of a

business.««««««.´

Dr E Goldratt
 Constraints determine system
performance
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2 A business having no constraints would have infinite profit.

2 Constraints may be-

" Market
" Capacity
" Resources
" Suppliers
" Finance
" Knowledge Or Competence
" Policy
 Continue «.
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2 A constraint is anything that prevents a system from

achieving higher performance relative to its goal (which for

a business is to make more money).

2 A policy constraint is a policy, procedure, or even mindset

that prevents a company from making more money.

 Examples of Policy Constraints
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2 Salaries paid to workers are so low that the company can¶t keep

qualified workers.

2 Buying raw materials strictly on the basis of price prevent getting

consistent good quality materials

2 Repair of large portion of High Way Road, the actual constraint

is Government acquisition policy - contract goes to lowest

bidder.

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 Finding the Constraint


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 Finding the Resource Constraint
(Assume the market exceeds productive capacity).
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 Identifying the Drum
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the physical constraint or the weakest link, which

will set the timing for the rest of the system« may
called as a Capacity constraint resource (CCR).

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Drum

C should be used as a drum beating out a pace of

3 units per hour for the line to follow.
 6ocating the Buffers
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aterial release uration.

he uffer rotects the ru , y ensuring that the
or -in- rocess arrives at the ell efore it is
sche ule to e rocesse .
 Tying the Rope from the Constraint to
Material Release
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Rope is the term used for the communication feedback to

the resources before the Drum, so that each of them
produces only the amount of inventory that the Drum can
complete.

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Material
release

  

  
 

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 What if there is no Resource Constraint?
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(The market demand is less than capacity)



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Material
release
  
 TOC Process
Five Focusing Steps
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1. Identify the constraint to the system.

2. Decide how to exploit the constraint to the system.

3. Subordinate all other resources to the constraint.

4. Elevate the system constraint.

M. If in any step, the constraint is broken, go to step 1. Don't

let inertia set in.
 Identify the Constraint to the system.
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2 Consider what is limiting the performance of the system,

whether the restraint is inside or outside the system

(resource, policy, market)
 Decide how to exploit the constraint to the
system.
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2 Exploit means to get most from the constraining element

without additional investment

2 Find out the different possible ways to get maximum

benefit from constraint.
Subordinate all other resources to the constraint.
1M

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Material
release

  

  
 

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6ocal efficiency measures must be eliminated and

replaced by performance to schedule.
 Elevate the system constraint.
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Material
release 
  

  
 
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This might be a new worker or machine or it might be

offloading work to an existing machine.
If in any step, the constraint is broken, go to step
1. Don't let inertia set in.
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Material
release 
  

  
 
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2 For example, change in market demand for a product, after

elevating the constraint one must not become complacent with
their action as there is an environmental (surrounding) change.
 Conclusion
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2 TOC and DBR is helpful for identifying the core problem of

a complex system.

2 TOC addresses the entire system as a chain or grid of

interlinked chains.

2 Result in continual improvement of the performance of the

entire system.
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THANK YOU