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Mahesh C. Gupta (College of Business, University of Louisville, Louisville, Kentucky, USA) Lynn H. Boyd (College of Business, University of Louisville, Louisville, Kentucky, USA) The purpose of this paper is to suggest that the theory of constraints (TOC) can serve as a general theory in operations management. The paper first investigate linkages between TOC and the core concepts/components of operations management (OM) and show how OM concepts can be integrated with TOC using examples from the published TOC literature. A second important
purpose is to show that TOC, as a theory, has properties essential for a good theory. Design/methodology/approachUsing a commonly accepted categorization of operations decisions (process, quality, inventory and capacity), traditional views, and approaches to operations decisions to those inherent in the TOC are compared. FindingsThe paper concludes that the TOC provides approaches to operations decisions that avoid pitfalls of local optimization by reaching across functional boundaries in organizations. In addition, while the TOC appears to meet the criteria of a good theory, it has not been empirically tested for the most part. Originality/valueThe TOC can serve as a unifying theory or theme for operations management, providing new insights for researchers and an organizing principle for teachers. Keywords
CitationGupta, M.C. and Boyd, L.H. (2008), "Theory of constraints: a theory for operations management", International Journal of Operations & Production Management, Vol. 28 No. 10, pp. 991-1012. https://doi.org/10.1108/01443570810903122 Publisher:Emerald Group Publishing Limited Copyright © 2008, Emerald Group Publishing Limited Related articlesCapacity ManagementCapacity management on the face of it seems simple. The goal is to align capacity with that of load and demand. To do that we must understand; what capacity is available and when it is available; and what capacity is required and when it is required. In practice however, this is extremely complicated as every resource and machine is examined individually and yet still must follow the route. However, computers and more explicitly MRPII can run the algorithms very quickly interrogate every machine and every route in the whole plant or in project environments across all the projects. The solution is extremely complex and gives us a precise yet wrong answer, which is extremely difficult to interrogate manually. It cannot deal with the variations that happen with load, capacity and execution flow. Despite this companies still invest huge sums of money and time in MRPII and the quest for accurate data. Theory of ConstraintsThe best solutions are simple solutions, if they are simple they can be understood. Theory of Constraints (TOC) gives us a simple solution to capacity management by applying focus. The premise is that in a system there are only a few constraints that need to be considered when managing capacity and ensuring that it is aligned with load and demand. These are the Capacity Constrained Resources (CCR's), this means all other resources have more capacity. Therefore, if we only load the system to the capacity of the CCR’s, the system as a whole will have enough capacity. Work is released a buffer time before the CCR’s and a buffer time after the CCR’s is assigned to give a delivery date and protect the system from the variability in execution. TOC has many more things to better manage capacity in manufacturing, service and project environments that cannot be described in the introduction to the forum. ForumThe Forum will provide the opportunity to help each other develop improved understanding on capacity management of systems and the use of the Theory of Constraints. Forum Leader Over the last sixteen years Andy and Goldratt UK have worked with hundreds of organisations implementing TOC including; Honeywell, Bombardier, Siemens, Johnson Matthey and many more SMEs. Andy is also an owner and Director of software company RopeWeaver who provide TOC based software for SME’s in Operations and Distribution, and in 2013 Andy became shareholder in Tenon Engineering a manufacturing business engineering and producing instrumentation products. How can the theory of constraints impact facility capacity?The Theory of Constraints focuses on identifying and removing constraints that limit throughput. Therefore, successful application tends to increase manufacturing capacity. Lean Manufacturing focuses on eliminating waste from the manufacturing process.
What is the theory of constraints and how does it relate to limited resources?The Theory of Constraints is a management approach that considers that at any given time, an organization is limited from achieving its highest goal by a single constraint. The theory provides tools to help identify and break through the constraint.
How can the theory of constraints be applied to services?The theory of constraints allows for working on only one constraint at a time. Prioritization will determine the most serious constraint, allowing the business to then begin developing ways to unblock the bottleneck and solve its most serious service problem.
What is the impact of the theory of constraints on operations strategy?TOC impacts mainly the competitive priorities on-time Delivery, high Speed and high Flexibility. • A TOC-Operations Strategy model was proposed enhancing the organisational design. • Firms can re-evaluate its continuous improvement initiatives in Operations Strategy.
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What is the link between the theory of constraints and the capacity of a facility operation?
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