A SEMINAR ON

THEORY OF CONSTRAINTS AND

ITS APPLICATION IN PRODUCTION
FIRM
Presented bySARANG SANJAY DESHMUKH

Guided byProf. K.S. PATIL

Department of Production Engineering

K. K. Wagh Institute of Engineering Education & Research
Nashik-42003
(2013 2014)

HISTORY

TOC was developed by Dr. Eliyahu Goldratt, a Israeli physicist in the

mid 1980s with his business novel The Goal.
Initially Dr. Eliyahu invented a software named OPT This software
package quickly and effectively scheduled production in even
complex environments by separating bottleneck and non-bottleneck
operations.
But as this was introduced under license hence many of its topics
were not clearly understood and couldnt fetch the attention of
scientists.
Hence Dr. Goldratt published his book named as The Goal
in 1987, in which he suggested and explained TOC
after which TOC was widely implemented in various
fields.

UNDERSTANDING TOC

The
Theory
of
Constraints
is
a
management policy which provides the determination of the factors
which limits a company reaching its objectives and the application of
necessary changes to remove these factors generally known as
constraints.
TOC drives manager to attack these constraints in order to reach the
company's primary goal-i.e. to make Money
TOC views System as Chain
Number of links together form a chain in similar manner as number
of elements are responsible for Systems formation.
TOC determines an element which limits the system progress and
suggest remedy for eliminating that element(Constraint).

CONSTRAINTS???

A Constraint is anything that prevents the system from achieving

more of its goal. There are many ways that constraints can show up,
but a core principle within TOC is that there are not tens or hundreds
of constraints. There is at least one and at most a few constraint in
any given system.
Constraints can be internal or external to the system.
There is no choice in the matter of constraints; either you manage the
constraints or they manage you.
The constraint will determine the output of the system whether they
are acknowledged and managed, or not.
The system is as strong as its constraint's

TYPES OF CONSTRAINTS

TYPES OF
CONSTRAINTS

BEHAVIORAL
CONSTRAINT

Eg. Workers attitude,

mental state, mood,
etc.

MANAGERIAL
CONSTRAINT

Eg. Management
Policies.

CAPACITY
CONSTRAINT

Eg. When Demand >

Actual capacity.

MARKET
CONSTRAINT

Eg. When Demand <

Actual capacity.

LOGISTICAL
CONSTRAINT

Eg. Problems due to

Planning and control
system.

FOCUSING STEPS OF TOC

The TOC process seeks to identify the constraint and restructure the
rest of the organization around it, through the use of the
Five Focusing Steps:
1. Identify the Constraint
2. Exploit the Constraint
3. Sub ordinate everything
to the Constraint
4. Elevate the Constraint
5. Repeat for the new
Constraint

METHODOLOGY OF TOC

Drum-Buffer-rope scheduling method- The DBR process was designed as a means of implementing the
five-step process of continuous profit improvement. It is used to represent how a factory should be scheduled based on
TOC. The DBR methodology consists of three elements:

Drum
The drum

is the schedule for the systems constraint(s) and represents a portion of the exploitation phase of
the five-step improvement process. It is used to maximize the available time of the constraint and to create
the master production schedule (MPS). Like the bass drum in a marching band, it is the drumbeat of the
manufacturing facility. All other resources produce in synchronization to the constraints schedule.

Buffer
The buffer

is a time mechanism used to allow for those things that will go wrong, and it determines the lead
time for products from the gating operations. The buffer is equal to the processing time plus the setup time
plus an estimate of the aggregated amount of protective time required to ensure that the product will get to
the buffer origin when needed.

Rope
The rope

is the synchronization mechanism for the other resources and consists of the release schedule for all
gating operations. Technically the rope is equal to the constraint schedule date minus the buffer time. The
release of material determines the timing for parts being processed on the nonconstraint resources.

THINKING PROCESSES OF TOC

The thinking processes are a set of tools to help managers walk

through the steps of initiating and implementing TOC.

Tools of Thinking processes of TOC

TOOLS OF THINKING
PROCESS

Current
Reality
Tree(CRT)

What to
Change?

Evaporating
cloud(EC)

Future
Reality
Tree(FRT)

What to
Change to?

Transition
Tree

Prerequisite
Tree(PT)

How to
Change?

TOC Performance Measurement

parameters
FINANCIAL
MEASUREMENT

Net

Profit-

An absolute
measurement in rupees

Return on Investment-

A
relative measurement based on
investment.

Cash Flow-

Money coming
in VS money coming out

Rate at which a system generates

money
through
sales

Inventory- Money inside company

Throughput- Money flowing In

OPERATIONAL
MEASUREMENT

Inventory refers to all the money

that the system has invested in
things that are expected to be sold.

Operating
flowing Out

Expenses-

Money

All the money a system spends in

turning inventory into throughput

ADVANTAGES OF TOC

Potential for tremendous increases in productivity with minimal

changes to operations.
Most powerful and cost effective tool for increasing production
capacity.
Very simple to communicate and apply, making it ideal for shop floor
teams.
Great for fostering teamwork as different areas become aware of the
constraint and the need to work together to assist the constraint process.
It provides immediate and very tangible benefits.
Allows growth of turnover/productivity without the need for additional
space or staff.
Provides a means to evaluate the true value of changes (using T, O, I),
and utilize this to select the best options, and drive the right
behavior/decisions.

DRAWBACKS OF TOC

The considerable length of training time required to achieve mastery

of the theory.
The considerable length of time required to complete the problem
identification and solving process.
The need for the cooperation and enthusiasm of all the people
involved with the problem, and
Its over reliance on group work.

APPLICATION OF TOC IN A
PRODUCTION FIRM
BackgroundCase study was carried out in a Electromechanic factory located
in Istanbul.
This factory is a supplier of keys.
The problem face by the factory was that it was lacking in
manufacture of the required quantity of keys as demanded by
the company. i.e. The company's demand was 500quantity of
keys whereas this firms capacity was 450 quantity of keys in
given time.
Then so as to increase productivity TOC was implemented and
results were as discussed below

IMPLEMENTING FIVE STEPS OF TOC

Step1. Identify the Constrainto
o
o

This steps focuses on finding the constraints that limits the firms capacity.
Hence , the table indicating firms current capacity was prepared.(refer table 1)
From table the column current indicates current processing time of firm and the column Total
indicates the processing time required to produce 500 keys.
o It clearly shows that all other operation have required processing time less than the current
processing time, except the plastic injection machine.
o This indicates that the constraint is the Plastic injection machine

 Step2 - Exploiting the Constraint

o The machine is continuously working even during meal breaks and other breaks.
o An operator works on machine every time so there is nothing to do on this phase, its
time to examine the next phase.

Step3- Subordinating everything else-

o In this step other resources are managed to get maximum efficiency at constraint point.
o But here it seems that plastic injection is the initial operation so late supply of raw
material was examined but there seemed no fault in it.

Step4 Elevating the systems Constraints.

o The process of plastic injection was examined. From table it was observed that setup
time of plastic injection could be controlled.
o
Hence a PLC(Programmable Logic control) system was used to reduce the setup time
of injection machine.

o The use of PLC system reduced the setup

time from 20mins to 1 min. And eventually
reduced the processing time of Plastic
Injection Machine to1hr. 26 mins.
The adjacent table shows the same.

Step5 Back to Step 1

o As observed in table below the factory now

has its increased productivity and company's
demand is fulfilled.
o Now another constraint arises i.e. Market
constraint and hence back to step 1 to
eliminate it.

CONCLUSION

Hence with help of above case study we can conclude

that TOC, with its Five focusing steps and all of its
related philosophy including Thinking process and
drum buffer-rope scheduling method, provides an
approaches for identifying and exploiting bottlenecks in
the organization.
These steps of TOC leads to improvements in
operations, decrease in lead time, decrease in cycle
time, improves the due date performance, throughput
increases and eventually contributes in improvement of
the whole system.

THANK YOU