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OPERATIONS & MATERIALS

MANAGEMENT
THEORY OF CONSTRAINTS &
SYNCHRONOUS MANUFACTURING
Submitted By: Chahat Malhotra (08)
Navneet Kaur (17)

Submitted to:
Dr. Neha Gulati
Assistant Professor
Computer Science &
Applications
University Business School
Panjab University
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CONTENTS
 Basic concept
 Brief History
 The process
 The Goal
 Goldratt’s Rules
 Capacity
 Example
 Synchronous Manufacturing System
 Drum Buffer Rope Approach
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The basis of the theory of

constraints is that every
organisation has
constraints that prevents it
from achieving a higher
level of performance. These
constraints should be
identified and managed to
improve performance.
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CONSTRAINTS
• Element, factor, or subsystem that works as a bottleneck.
• It restricts an entity, project, or system (such as
a manufacturing or decision making process) from
achieving its potential (or higher level of output) with
reference to its goal.

INTERNAL EXTERNAL
CONSTRAINTS CONSTRAINTS
• Badly deployed production • Demand for the product.
methods. • Shortage of power supply.
• Lack of competent • Shortage of raw materials.
employees.
• Poorly organized business
policies.
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In the late 1970s Eliyahu Goldratt, an Israeli Physicist,

began to present his ideas on production scheduling. He
developed a proprietary computer black-box software
program known as OPT ( Optimized production technique).
After more than 100 firms had successfully used the
scheduling system, he sold the rights of the software and
began marketing the theory behind it.
In 1980s Goldratt refined his ideas into what is now known
as THEORY OF CONSTRAINTS.
He published a novel “THE GOALS” in 1984 which
explained the concepts of OPT.
In 1990s Umble & Srikanth came up with detailed concepts.
General Motors claims for coining the term Synchronous
manufacturing.
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Increased profits.

Faster improvement.

Improved capacity.

Reduced lead times.

Reduced inventory.
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TQM & TOC

There is a strong parallel

relation with continuous
improvement processes in
TQM & TOC. i.e. small
incremental changes to be
made.
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HOW ARE THEY DIFFERENT?

Total Quality Theory of
Management Constraints
• Focus is on • Focus is on managing
continuous the constraints.
• Improve revenue by
improvement.
increasing
• Improve revenue throughputs.
by reducing • Entire process is
errors. reduced to identifying
• No specific the limiting factor.
approach is • A five step process is
followed. used to improve the
performance
•
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Identify the
system’s
constraints

Exploit the
Repeat the
system’s
process
constraints

THE
PROCESS Elevate the
Subordinate &
system’s
synchronise
constraints
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GOLDRATT’S GOAL OF
THE FIRM

TO MAKE A
PROFIT
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PERFORMANCE
MEASURES

FINANCIAL OPERATIONAL

Net Profit Throughput (T)

Return on Inventory (I)
Investment (ROI) Operating Expense
Cash Flow (OE)
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Throug Invent Operating

hput ory Expense
●
All the money the ●
All the money
Rate at which
●
system invests in system spends in
system purchasing things turning
that the system
generates intends to sell.
inventory into
money ●
Does not include throughput.
labour and ●
Includes labor
through sales. overhead. and overheads.

Net Profit= ROI= T-OE

T-OE I
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PRODUCTIVITY

• Does not guarantee profitability.

Has throughput increased?

Has inventory decreased?

Have operational expenses decreased?

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GOLDRATT’S RULES
Do not balance capacity, balance the flow.

The level of utilization of a non-bottleneck is determined by some

other constraint.

Utilization and activation of a resource are not the same.

An hour lost at a bottleneck is an hour lost for the entire system.

An hour saved at a non-bottleneck is a mirage.

Bottlenecks govern both throughput and inventory.

The transfer batch does not have to equal the process batch.

A process batch should be variable.

Priorities can be set only by examining the system’s constraints.

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CAPACITY PLANNING PROCESS

 Forecast demand for 1 to 5 years or more.

 Calculate capacity requirements to meet the

forecasts.

 Measuring the current capacity.

 Decide if and how the gap in capacity will be

bridged in the future.
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CAPACITY
• BOTTLENECK • NON-BOTTLENECK
RESOURCE : One whose RESOURCE : One whose
capacity is equal to or less capacity is greater than the
than the demand placed on demand placed on it.
it.

X Y
A Capacity Constraint resource (CCR) is a resource, if
not properly scheduled and managed, is likely to prevent the
product flow to deviate from the planned flow.
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CAPACITY EXAMPLE SITUATION
1
• There is some idle production in this set up. How
much?

X MARKE
CASE A Y
T

X Y

Bottleneck Non-bottleneck 25%

Demand/Month 200 units 200 units IN Y
Process time/unit 1 hour 45 mins

Avail. 200 hours 200 hours

Time/Month
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CAPACITY EXAMPLE SITUATION 2
• Is there going to be a build up of unnecessary
production in Y?

Y MARKE
CASE B X
T

X Y

Bottleneck Non-bottleneck YES,

Demand/Month 200 units 200 units 25%
Process time/unit 1 hour 45 mins IN Y
Avail. 200 hours 200 hours
Time/Month
CAPACITY EXAMPLE SITUATION 23

3
• Is there going to be a build up in unnecessary
production in Y?

X
ASSEMBL
MARKET
Y CASE C
Y

X Y

Bottleneck Non-bottleneck YES,

Demand/Month 200 units 200 units 25%
Process time/unit 1 hour 45 mins IN Y
Avail. 200 hours 200 hours
Time/Month
SYNCHRONOUS
MANFACTURING SYSTEM…
Synchronous manufacturing is an all encompassing
manufacturing management philosophy that includes
a consistent set of principles,procedures and
techniques where every action is evaluated in terms
of common goal of organization.
Synchronous manufacturing can produce rapid
improvements in most manufacturing environments
because it provides the means to identify anf focus on
the common goal of the organization.
Every program, every decision and every activity is
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evaluated in terms of whether it contributes to the

SYNCHRONOUS
MANFACTURING SYSTEM…
• SYNCHRONOUS MANFACTURING refers to the
entire manufacturing process working together
in harmony to achieve the goals of the firm.
• This logic attempts to coordinate all resources
so that they work together and are in harmony
or are “synchronized”. In such a synchronous
state, emphasis is on the total system
performance.
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CONCEPT OF SMS

• The flow of material through a system, not the

capacity of the system, should be balanced. This
results in materials moving smoothly and continuously from
one operation to the next; and thus lead times and Work-In-
Process (WIP) inventory waiting in queues can be reduced. 
• Improvement on the use of equipment and reduced
inventories can reduce total cost and can speed up
the customer delivery, allowing an organization to
compete more effectively. Shorter lead times improve
customer service.

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ASSUMPTIONS ….

• Work centre - It can accommodate only one job at a time 

• Continuous Operation - After every operation, job is
loaded onto the machine 
• Machine breakdown - Scheduled maintenance is carried
out in the shop 
• Labour constraints - labour force is available all the time
in the shop 
• Processing Time - the sum of setup time and machining
time

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OBJECTIVES OF SMS…
• To balance the flow through the system
• To determine the level of utilization of a non
bottleneck and other related constraint.
• To monitor the utilization and activation of a
resource.
• To evaluate the time lost at a bottleneck because
the time lost at it is the time lost for the entire system.
• To sum up the time saved at a non bottleneck
• To identify the bottlenecks governing both
throughput and inventory, 
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• To set the priorities through the system’s

constraints.
DRUM BUFFER ROPE
APPROACH

• DBR is a theory of constraints

scheduling process focused on
increasing flow by identifying and
leveraging the system constraint.
• DBR is developed by Eliyahu
M.Goldratt
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DBR APPROACH

• This troop analogy was first applied to a production line

by Ford Motor Co., Ltd. who connected production
processes of an automobile assembly line by conveyer
belts. Then, Mr. Taiichi Ohno of Toyota Motor Corporation
introduced a rope called "KANBAN". Both of the concepts
brought an innovation in company management and had
a great impact on economic growth.

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 DBR APPROACH
• As in an example of boy scouts hiking, those who are
bottlenecks are positioned at the beginning and a rope
is used for subordinating (synchronizing) the speed of
followers with that of the bottleneck persons. This
enables preventing the march (work-in-process
inventory) from expanding. In other words, to
eliminate work-in-process inventory is to reduce costs.
Also, in preventing the front ones of the bottleneck
group who determine the marching speed of the entire
team from slowing down, a rope plays an important
role as a buffer to absorb the changes in the marching
speed of the front ones of the bottleneck group. A
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drum plays a role of conveying the information about
the speed of the slowest bottleneck persons to
DBR APPROACH
• When the rope is stretched out to the limit, it is
necessary to impose a constraint on those who tied to
the rope so that they will not be able to raise the
speed any further. In some cases, work needs to
suspend when the buffer reaches the limit. Similarly,
the team may sometimes need to stop. If the drum is
beaten at the speed of the first person of the team, an
interval with the following persons will get wider and
wider. In that case, the inventory level will increase
and throughput will decrease. If the drum is beaten at
the speed of the last person of the team, i.e. the team
marches at the speed of the inventory, the inventory
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level will decrease and throughput will increase as the
speed of demand increases. The pull-type system
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DBR APPROACH….

• The drum-buffer-rope approach is effectively used in

synchronous manufacturing system. 
• Every manufacturing system needs some control
points to control the flow of products through the
system. 
• If the system contains a bottleneck, the bottleneck is the
best place for control. 
• This control point is called the Drum for it strikes the
beat that the rest of the system uses to function. 

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THANK
THANK YOU
YOU
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