Series C

TQM Training Module on

Theory of Constraints (TOC)
Doc. No. C-23.00.20180623
Revision 00; 23th June 2018
Authors: Pankaj Lochan and Ajay Kumar N

For further clarifications, write to ajay.kumar@jsw.in © Total Quality Management, JSW Group
 © Total Quality Management, JSW Group

TQM Training Series: 6 series with 68 training modules

This is a training module on TOC (C-23)
Series-A Series-C Series-D Series-F
Basic Problem Solving Tools Quality Management Basics Productivity & Efficiency Tools Advanced Statistical Tools
A-01 Flow Charts C-01 Quality Mgmt. Basics D-01 Value Stream Mapping (VSM) F-01 Sampling & Distribution
A-02 Cause & Effects Diagram C-02 Basic Statistics D-02 Time & Motion Study F-02 Hypothesis Testing
A-03 Stratification C-03 Statistical Process Control D-03 SMED F-03 Regression
A-04 Scatter Diagram C-04 KPI Drill Down D-04 Wrench Time Analysis F-04 Basics of DoE
A-05 Control Charts C-05 KPI Benchmarking D-05 Queuing Theory F-05 Factorial DoE
A-06 Check Sheets C-06 Strategic Analysis Tools D-06 Inventory Management F-06 Principal Component Analysis
A-07 Histogram C-07 Policy Management D-07 Linear Programming Problem F-07 Cluster Analysis
A-08 Pareto Charts C-08 Policy Diagnosis
D-08 Game Theory F-08 Conjoint Analysis
A-09 Graphs C-09 Daily Management
D-09 OEE F-09 Discriminant Analysis
C-10 Daily Mgmt. in Maintenance
D-10 PERT & CPM F-10 Factor Analysis
C-11 Cross Functional Mgmt.
Series-B F-11 Response Surface Method
C-12 Quality Assurance Basics
Basic Management Tools
C-13 MSA Series-E F-12 Taguchi DoE
B-01 Brainstorming C-14 PFD, FMEA, Control Plan Decision-making Tools F-13 Weibull Analysis
B-02 Affinity Diagram C-15 Cost of Poor Quality (COPQ) E-01 Quality Function Deployment
B-03 Arrow Diagram C-16 Improvement Fundamentals
E-02 Fault Tree Analysis
B-04 Tree Diagram C-17 4i Methodology
E-03 AHP & Paired Analysis
B-05 PDPC C-18 5S
E-04 Pugh Matrix
B-06 Matrix Diagram C-19 Quality Circles
C-20 QC Story Approach E-05 Time Motion Series
B-07 Matrix Data Analysis
B-08 Relation Diagram C-21 Kaizen, OPL, Poka Yoke
C-22 Autonomous Maintenance
C-23 Theory of Constraints (TOC)
Theory of Constraints
“A Chain is no stronger than its
weakest link ”
LEARNING OBJECTIVES

INTRUDUCTION

FIVE FOCUSING STEPS

DRUM BUFFER ROPE

EXAMPLE FROM PLANT

 “Theory of Constraints” developed by Eliyahu Goldratt
in the mid 1980’s with his business novel The Goal.
Goldratt’s Biography
➢ Born in Israel in the late 1940’s.
➢ Bachelor’s degree in Physics.
INTRUDUCTION ➢ Masters and Doctorate degrees in
Philosophy.
➢ Founder of a production scheduling
software company.
➢ Has helped many companies such as:
GM, RCA, Kodak, Westinghouse,
Philips, etc.
➢ Wrote several books:
The Goal.
The Race.
What is this thing called TOC?
Critical Chain.
 The objective of TOC is to increase
throughput contribution while decreasing
Theory of Constraints : investments and operating costs.
The first effort on this concept or ROLE OF CONSTRAINTS
philosophy called synchronous A Constraint is any element that prevents the system from
The “Goal” of
manufacturing started by Professor every business attaining its goal.
Eliyahu Goldratt who wrote this book organization is
called “The Goal”. The Goal was The limit to which the product can
to make money Marketing Constraints
first published in 1983 and The Goal (Profit), both
be sold.
was in the form of a novel which now and in Production (Capacity)
future
This limits the production quantities.
captured the essence of Constraints
manufacturing and its principles The limit to which the material is
called as Synchronous Manufacturing Material Constraints
available for production
or Theory of Constraints. CONSTRAINT
Logistical Constraints Time taken to carry out activities.
PRODUCTION CAPACITY BOTTLENECK
CONSTRAINTS Managerial Constraints Policy of Organization.
60 70 40 60
Units/Day Units/Day Units/Day
Behavioral Constraints Operating decision making rules.
Units/Day

Maximum TWO TYPES OF RESOURCES

Throughput =
* # $ & Any Resources whose demand on it
40 Units/Day Bottlenecks
is more than its capacity.
Capacity Constrained A resource can become a bottleneck
Machine A Machine B Machine C Machine D Resource (CCR) when not properly scheduled.
 1. Identify the Constraints
FIVE FOCUSING STEPS
2. Exploit the Constraints

3. Subordinate the Constraints

4. Elevate the Constraints

5. Repeat Process
Five Focusing steps of TOC : Knowing “What to Change”

Supply Produce
Machine Machine Demand

2 Unit/Hrs 1 Unit/Hrs
15 Units/Hrs (Inventory) 12 Units/Hrs Loss 13 Units/Hrs

Identify Exploit Subordinate Elevate Repeat

01 02 03 04 05
Technical Make quick improvements to Technical
Feasibility and increase the throughput Feasibility and
Risk Mitigation (Improvements with Available Risk Mitigation
Study resources) Study

Produce Machine is Quick Increase the

Repeat the Process
Constraint : Because it improvement YES Synchronize the throughput of
till the Demand is
produce only 12 units/Hrs increased the Process with Machine by
Equal to
where Demand is 13 throughput ? Supply Machine enhancing its
Production
Units/Hrs Capacity
NO
 Five Focusing steps of TOC : Simplified Road Map
Identify the Constraints
Item Description
Look for large accumulations of work-in-
WIP
process on the plant floor. Inventory often
(Work in
accumulates immediately before the
Progress)
constraint.
Look for areas where process expeditors
are frequently involved. Special attention
Expedite and handholding are often needed at the
constraint to ensure that critical orders are
completed on time.
Review equipment performance data to
determine which equipment has the
longest average cycle time. Adjust out
time where the equipment is not operating
due to external factors, such as being
Cycle
starved by an upstream process or
Time
blocked by a downstream process.
Although such time affects throughput,
the time loss is usually not caused or
controlled by the starved/blocked
equipment.
Ask operators where they think
equipment is not keeping up with
Demand demand. Pay close attention to these
areas, but also look for other supporting
indicators.
Exploit the Constraint
Item Description
Create a suitably sized inventory buffer immediately
Buffer in front of the constraint to ensure that it can keep
operating even if an upstream process stops.
Check quality immediately before the constraint so
Quality only known good parts are processed by the
constraint.
Ensure that the constraint is continuously scheduled
for operation (e.g. operate the constraint during
Continuous breaks, approve overtime, schedule fewer
Operation changeovers, cross-train employees to ensure there
are always skilled employees available for operating
the constraint).
Move routine maintenance activities outside of
Maintenance
constraint production time (e.g. during changeovers).
Offload some constraint work to other machines.
Offload
Even if they are less efficient, the improved system
(Internal)
throughput is likely to improve overall profitability.
Offload some work to other companies. This should
Offload
be a last resort if other techniques are not sufficient to
(External)
relieve the constraint.
Subordinate to the Constraint
Item Description
Upstream equipment has excess capacity
that ensures that the constraint buffer is
Upstream continuously filled (but not overfilled)
so that the constraint is never “starved”
by the upstream process.
Downstream equipment has excess
capacity that ensures that material from
Downstream the constraint is continually processed so
the constraint is never “blocked” by the
downstream process.
Item Description
Implement DBR (Drum-Buffer-Rope) on
the constraint as a way of synchronizing the
DBR
manufacturing process to the needs of the
constraint.
Subordinate maintenance to the constraint
Priority by ensuring that the constraint is always the
highest priority for maintenance calls.
Operate non-constraint equipment at a
steady pace to minimize stops. Frequent
Steady
inertial changes (i.e. stops and speed
Operation
changes) can increase wear and result in
breakdowns.
Five Focusing steps of TOC : Simplified Road Map
Elevate Performance of the Constraint
Item Description
Use performance data (e.g. Overall Equipment
Performance Effectiveness metrics plus downtime analytics) to
Data identify the largest sources of lost productive time
at the constraint.
Target the largest sources of lost productive time,
Top Losses
one-by-one, with cross-functional teams.
Implement ongoing plant floor reviews within
shifts (a technique called Short Interval Control)
Reviews
to identify tactical actions that will improve
constraint performance.
Setup Implement a setup reduction program to reduce
Reduction the amount of productive time lost to changeovers.
Repeat the Process
Item Description
If the constraint has been broken (the
normal case), recognize that there is a new
Constraint
constraint. Finding and eliminating the
Broken
new constraint is the new priority (restart
at Step One).
If the constraint has not been broken,
recognize that more work is required, and
Constraint Not
a fresh look needs to be taken, including
Broken
verifying that the constraint has been
correctly identified (restart at Step One).

Updates/ Evaluate the constraint for potential design

Upgrades updates and/or component upgrades.
Purchase additional equipment to supplement the
Equipment
constraint (a last resort).
DRUM BUFFER ROPE
 Drum Buffer Rope
DRUM BUFFER ROPE CONCEPT :
DRUM BOTTLENECK MACHINE In manufacturing, the drum is bottleneck.
The buffer is the material upstream of the bottleneck and has to make sure that the drum is never
BUFFER SCHEDULED INVENTORY BEFORE DRUM
starved.
ROPE INFORMATION/SIGNAL The rope is a signal or information from the buffer to the beginning of the line.
If the drum processes parts, the buffer moves forward. The rope is a signal when material is taken out, and gives an information to replenish another part at the
beginning of the line as shown in the Illustration below.
ROPE DRUM
BUFFER Batch Process
DRUM : Constraint A
Raw Material Demand P 25 Units
Release before
175 Min. of “P”
Machine A Machine B
Requirement Shipping
Buffer
Capacity 40 Units/Hr. B Capacity 20 Units/Hr. B
D Time-P 30 Min./20P D Time-P 60 Min./20P
Assembly
Time-1P 1.5 Min Time 30 Min. Time-1P 3 Min

E Capacity 35 Units/Hr. B
Raw Material D Time-P 35 Min./20P
Release before
105 Min. of “P”
Machine C Time 1.75 Min Time 20 Min. C
Requirement
Capacity 30 Units/Hr. B Assembly
Buffer
D Time-P 40 Min./20P
Refer Next Page for Scheduling Sequence
Time-1P 2 Min Time 10 Min. C
 Drum Buffer Rope Cont….

A Confirming the Demand

B Checking the System Constraints : Capacity Verification : Machine which does not meet demand, then it is Drum.
C Confirming the Practical buffer requirement (Past Data analysis and Technical expertise)
D Calculate the Time required to produce Demand Product.
E Decide the Drum Buffer inventory in terms of time such that drum is never starved.

Example from Plant: RMHS

1. For Feeding Corex Coal of 3 Types from Storage Yard, Option is available from 5 Nos. of Stacker cum Reclaimers (SR).
2. Stacker cum Reclaimer (Stack the raw material from Unloading Station (Wagon Tippler) to Yard and Reclaim the raw material from Yard
to Corex Screen House : Both Stacking and Reclaiming operation cannot be carried simultaneously).
3. Any one machine can feed the Coal to a common conveyor CSPC1.
4. Machine Number SR1 and SR2 is fixed for Feeding and Stacking the Corex Coal respectively (Out of 5Nos. Of SR’s, 2Nos. are fixed for
Corel Coal Feeding).
5. Problem is SR1 and SR2 are maximum operating (8 Hrs. Shift) compared to other three machines while feeding Corex Coal to Coal
Screening Plant.
6. Study carried based on Ideal Case of feeding from all 5Nos’s of SR’s and Practical Case of feeding to find out the Constraint.
 Corex STUDY OF COREX COAL FEEDING BASED ON EQUIPMENT CSPC1
5SR6 5SR1 5SR2 5SR5 7SR6
700 TPH 500 TPH 500 TPH 720 TPH 1250 TPH
Boundary Limits CAPACITY & SPECIFICATION 700 TPH
Type of Name of Reclaiming Qty. in 500 TPH 700 TPH
Material Material MT /Shift
200m3 200m3 200m3
Type1 Green Bank 1050
Ideal Case
Type2 Ensham 900 Effective Storage with 80%
Study
Type3 Namoi 1050 STORAGE Filling/Bunker : 128 MT
Total 3000 BUNKER Total : 384 MT

Corex Coal Feeding Permutations Combinations Results of Permutations & Combinations Results of Permutations & Combinations Results of Permutations & Combinations Results of Permutations & Combinations
A:Applicable
(Equipments Machines Machines Machines Machines
Equipment 5SR1 5SR2 5SR5 5SR6 7SR6 NA:Not
should not Total Time Total Time Total Time Total Time
Applicable 5SR1 5SR2 5SR5 5SR6 7SR6 5SR1 5SR2 5SR5 5SR6 7SR6 5SR1 5SR2 5SR5 5SR6 7SR6 5SR1 5SR2 5SR5 5SR6 7SR6
R-Capacity 500 TPH 500 TPH 700TPH 700 TPH 700 TPH repeat) in Hr:Min in Hr:Min in Hr:Min in Hr:Min
Combinations Combinations Combinations Combinations
1 0 0 0 0 0 NA NA
Com1 6:36 6:36 Com15-1 2:46 4:20 7:06 Com25-1 2:46 5:14 8:00 Com31-1 2:46 2:03 2:16 7:06
2 0 0 0 0 1 A 1
Com2 6:36 6:36 Com15-2 5:32 2:03 7:35 Com25-2 5:32 2:28 8:00 Com31-2 2:46 2:16 2:03 7:06
3 0 0 0 1 0 A 1 Com3 6:36 6:36 Com15-3 5:14 2:16 7:30 Com25-3 5:14 2:46 8:00 Com31-3 2:28 2:16 2:16 7:01
4 0 0 0 1 1 A 4 Com4 8:00 8:00 Com16-1 5:14 2:16 7:30 Com26-1 2:16 2:03 2:16 6:36 Com31-4 2:28 2:16 2:03 6:48
5 0 0 1 0 0 A 1 Com5 8:00 8:00 Com16-2 2:28 4:33 7:01 Com26-2 2:03 2:16 2:16 6:36 Com31-5 2:28 2:16 2:16 7:01
6 0 0 1 0 1 A 4 Com6-1 4:20 2:16 6:36 Com16-3 2:46 4:20 7:06 Com26-3 2:16 2:16 2:03 6:36 Com31-6 2:28 2:03 2:16 6:48
7 0 0 1 1 0 A 4 Com6-2 2:03 4:33 6:36 Com17-1 2:46 4:20 7:06 Com26-4 2:03 2:16 2:16 6:36 Com32-1 2:46 2:03 2:16 7:06

8 0 0 1 1 1 A 6 Com6-3 2:16 4:20 6:36 Com17-2 5:32 2:03 7:35 Com26-5 2:16 2:16 2:03 6:36 Com32-2 2:46 2:16 2:03 7:06

9 0 1 0 0 0 A 1 Com7-1 2:16 4:20 6:36 Com17-3 5:14 2:16 7:30 Com26-6 2:16 2:03 2:16 6:36 Com32-3 2:28 2:16 2:16 7:01

10 0 1 0 0 1 A 4 Com7-2 4:33 2:03 6:36 Com18-1 5:14 2:16 7:30 Com27-1 2:46 2:03 2:16 7:06 Com32-4 2:28 2:16 2:03 6:48

11 0 1 0 1 0 A 4 Com7-3 4:20 2:16 6:36 Com18-2 2:28 4:33 7:01 Com27-2 2:28 2:16 2:16 7:01 Com32-5 2:28 2:16 2:16 7:01

12 0 1 0 1 1 A 6 Com8-1 4:20 2:16 6:36 Com18-3 2:46 4:20 7:06 Com27-3 2:46 2:16 2:03 7:06 Com32-6 2:28 2:03 2:16 6:48
Com8-2 2:03 4:33 6:36 Com19-1 2:46 4:20 7:06 Com27-4 2:28 2:16 2:16 7:01 Com33-1 2:46 2:28 2:16 7:30
13 0 1 1 0 0 A 4
Com8-3 2:16 4:20 6:36 Com19-2 5:32 2:03 7:35 Com27-5 2:46 2:16 2:03 7:06 Com33-2 2:46 2:46 2:03 7:35
14 0 1 1 0 1 A 6
Com9-1 2:16 4:20 6:36 Com19-3 5:14 2:16 7:30 Com27-6 2:46 2:03 2:16 7:06 Com33-3 2:28 2:46 2:16 7:30
15 0 1 1 1 0 A 6
Com9-2 4:33 2:03 6:36 Com20-1 0.22 2:16 7:30 Com28-1 2:46 2:16 2:03 7:06 Com33-4 2:28 2:46 2:03 7:17
16 0 1 1 1 1 NA NA
Com9-3 4:20 2:16 6:36 Com20-2 2:28 4:33 7:01 Com28-2 2:46 2:03 2:16 7:06 Com33-5 2:28 2:46 2:16 7:30
17 1 0 0 0 0 A 1
Com10-1 4:20 2:16 6:36 Com20-3 2:46 4:20 7:06 Com28-3 2:28 2:16 2:16 7:01 Com33-6 2:28 2:28 2:16 7:12
18 1 0 0 0 1 A 4
Com10-2 2:03 4:33 6:36 Com21-1 2:46 4:20 7:06 Com28-4 2:46 2:03 2:16 7:06 Com34-1 2:46 2:28 2:16 7:30
19 1 0 0 1 0 A 4
Com10-3 2:16 4:20 6:36 Com21-2 0.23 2:03 7:35 Com28-5 2:28 2:16 2:16 7:01 Com34-2 2:46 2:46 2:03 7:35
20 1 0 0 1 1 A 6
Com11-1 2:16 4:20 6:36 Com21-3 5:14 2:16 7:30 Com28-6 2:46 2:16 2:03 7:06 Com34-3 2:28 2:46 2:16 7:30
21 1 0 1 0 0 A 4
Com11-2 4:33 2:03 6:36 Com22-1 5:14 2:16 7:30 Com29-1 2:46 2:16 2:03 7:06 Com34-4 2:28 2:46 2:03 7:17
22 1 0 1 0 1 A 6
Com11-3 4:20 2:16 6:36 Com22-2 2:28 4:33 7:01 Com29-2 2:46 2:03 2:16 7:06 Com34-5 2:28 2:46 2:16 7:30
23 1 0 1 1 0 A 6
Com12-1 5:14 2:16 7:30 Com22-3 2:46 4:20 7:06 Com29-3 2:28 2:16 2:16 7:01 Com34-6 2:28 2:28 2:16 7:12
24 1 0 1 1 1 NA NA Com12-2 2:28 4:33 7:01 Com23-1 2:46 4:20 7:06 Com29-4 2:46 2:03 2:16 7:06 Com35-1 2:46 2:46 2:16 7:48
25 1 1 0 0 0 A 4 Com12-3 2:46 4:20 7:06 Com23-2 5:32 2:03 7:35 Com29-5 2:28 2:16 2:16 7:01 Com35-2 2:46 2:28 2:03 7:17
26 1 1 0 0 1 A 6 Com13-1 2:46 4:20 7:06 Com23-3 5:14 2:16 7:30 Com29-6 2:46 2:16 2:03 7:06 Com35-3 2:28 2:46 2:16 7:30
27 1 1 0 1 0 A 6 Com13-2 5:32 2:03 7:35 Com24-1 5:14 2:46 8:00 Com30-1 2:46 2:03 2:16 7:06 Com35-4 2:28 2:46 2:03 7:17
28 1 1 0 1 1 NA NA Com13-3 5:14 2:16 7:30 Com24-2 2:28 5:32 8:00 Com30-2 2:46 2:16 2:03 7:06 Com35-5 2:28 2:46 2:16 7:30
29 1 1 1 0 0 A 6 Com14-1 5:14 2:16 7:30 Com24-3 2:46 5:14 8:00 Com30-3 2:28 2:16 2:16 7:01 Com35-6 2:28 2:28 2:16 7:12

30 1 1 1 0 1 NA NA Com14-2 2:28 4:33 7:01 Com30-4 2:28 2:16 2:03 6:48

31 1 1 1 1 0 NA NA Com14-3 2:46 4:20 7:06 Com30-5 2:28 2:16 2:16 7:01 Minimum time combinations 6:36
32 1 1 1 1 1 NA NA Com30-6 2:28 2:03 2:16 6:48 Maximum time combinations 8:00
Corex STUDY OF COREX COAL FEEDING BASED ON
PRESENT OPERATING CONDITIONS
Connectivity Flow Chart for Corex Coal Feeding
Boundary Limits
Type of Name of Reclaiming Qty. in
5SR6 5SR1 5SR2 5SR5 7SR6 Material Material MT /Shift
Type1 Green Bank 1050
700 TPH 500 TPH 500 TPH 720 TPH 1500 TPH Type2 Ensham 900
Type3 Namoi 1050 SHIPPING
Total 3000 ASSEMBLY
CSPC1
CONSTRAINT
550 TPH 700 TPH STORAGE
BUNKER
5SR1
200m3 200m3 200m3 500 TPH
Present Feeding Rate : 8:00 Hrs:Min
Mean of 5SR6, 5SR1, Effective Storage with 80%
Present 5SR2, 5SR5 Filling/Bunker : 128 MT
5SR2 Effective Storage with 80%
Operation Time Total : 384 MT Filling/Bunker : 128 MT
Motion Study Time Motion Study for feeding three types of material/shift 500 TPH Total : 384 MT
8:00 Hrs:Min
STORAGE BUNKER
750 MT 750 MT 750 MT 5SR5
05 Min 15 Min 80 Min 15 Min 05 Min 80 Min 15 Min 05 Min 80 Min 15 Min 05 Min 720 TPH 200m3 200m3 200m3
1 2 3 4 6 7 8 10 11 12 14 6:30 Hrs:Min

“Reclaiming “Belt/Bunker “Bunker

5SR6
“Conveyor “Positioning “Reclaiming “Belt/Bunker “Bunker “Reclaiming “Belt/Bunker “Bunker
Route Start of Stacker Operation of Empty of Change Operation of Empty of Change Operation of Empty of Change 700 TPH
Up” cum Type1 Material Reclaimed Over” Type2 Material Reclaimed Over” Type3 Material Reclaimed Over” 6:30 Hrs:Min
Reclaimer" Ist instant" materials Ist instant" materials Ist instant" materials 3000 MT/SHIFT
7SR6
Change of Stacker cum
“Positioning of 15 Min “Positioning of 15 Min “Positioning of 15 Min 1500 TPH
Reclaimer
Stacker cum Stacker cum Stacker cum 6:30 Hrs:Min
Reclaimer : Next Reclaimer : Next Reclaimer : Next ASSEMBLY
Material" Material" Material" 750 TPH
5 9 13

300 MT 150 MT 300 MT

3000 MT/SHIFT
30 Min 15 Min 05 Min 20 Min 15 Min 05 Min 30 Min
15 16 18 19 20 22 23 24
7:20
“Reclaiming “Belt/Bunker “Bunker “Reclaiming “Belt/Bunker “Bunker “Reclaiming Hr:Min
Operation of Empty of Change Operation of Empty of Change Operation of
Type1 Material Reclaimed Over” Type2 Material Reclaimed Over” Type3 Material
IInd instant" materials IInd instant" materials IInd instant"

“Positioning of 15 Min “Positioning of 15 Min

Stacker cum Stacker cum
Reclaimer : Next Reclaimer : Next
Material" Material"
17 21
Corex