THEORY OF CONSTRAINTS.

BY: GAGANDEEP KOUR ROLL NO:41/06 C-101

BIBLIOGRAPHY: 

International Journal of management and Organizational behaviour,Vol.8(6),page 540-558. 540Goldratt, Eli, THE GOAL Some important internet sources: http://www.goldratt.com/ http://www.rogo.com/cac/ http://www.wikipedia.com/ http://www.goldatt.com/AGI offices.html 

    

WHAT IS A CONSTRAINT? 
A

constraint is anything that limits an organization from achieving its goal. 

Two

basic types of constraints:  Physical constraint.  Non-physical constraint. Non-

SOME CONSTRAINTS ARE: 
INACCURATE

FORECASTS.  CLIENTS CHANGED THEIR MINDS.  UNRELIABLE PROCESSES.  UNRELIABLE SUPPLIERS.  UNTRAINED WORKERS.  UNDISCIPLINED MANAGEMENT.  UNRELIABLE WORKERS.

GOAL OF A BUSINESS ORGN. 
I.

II.

Make money now as well as in the future. Provide a satisfying and secure environment for employees now as well in the future. Provide satisfaction to the market now as well as in the future.

WHAT IS THEORY OF CONSTRAINTS?

TOC MEASUREMENT PROCESS : 
OPERATIONAL  Throughput(T)  Inventory(I)  Operating

MEASURES

Expenses(O) 

FINANCIALMEASURES  Net

profit=Tprofit=T-O  Return on Investment=(T-O)/I Investment=(T-

MEASURES  Productivity = T/O  Turnover = T/I 

PERFORMANCE

FOCUSSING STEPS:
1. 2. 3. 4. 5.

IDENTIFY the system s constraint(s). Decide how to EXPLOIT the system s constraint(s). SUBORDINATE everything else to the above decision. ELEVATE the system s constraint(s). Go to step one, but DON T allow INERTIA to cause a system constraint.

THINKING PROCESS:
What to change?  Identify the core problem.
1)

To what to change to?  Constructing a solution.
2)

How to cause the change?  Devising the implementation plan.
3)

TOOLS OF THINKING PROCESS: PROCESS:
1)

CURRENT REALITY TREE . THE EVAPORATING CLOUD. THE FUTURE REALITY TREE. THE PREREQUISITE TREE. THE TRANSITION TREE.

2)

3)

CORPORATE EXAMPLE:

EURIPA LAB,
SILICON VALLEY , CALIFORNIA.

QUESTIONS??

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