EIN6339 Operations Engineering
ASSIGNMENT #1: The Goal and Theory of Constraints (TOC)
Shahrouz Ebadian (Shahrouz.Ebadian@gmail.com)
The Goal: Do you think that this is an operational methodology or a philosophy? Please explain.
The Goal is a management-oriented novel that focuses on the concepts of systems management. The fictional novel focuses around Alex Rogo and the problems in his production plant. The plant is constantly behind schedule and unprofitable. Alex is given three months to turn things around or the plant will be shut down.
The Goal introduces the “Theory of Constraints (TOC)” which is an overall management philosophy that adopts the idiom “A chain is no stronger than its weakest link”. This
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If we can apply The Goal to the world’s most profitable company it seems safe to say that other companies in some shape or form will fall under this umbrella as well.
[pic] Fig 1.0 How to apply Constraint Management to a Production Facility? How about to a Bank? Assume that we can apply constraint management!
A production facility seems like the classical example in terms of analyzing the Theory of Constraints. As time has evolved production facilities have become larger, more complicated and depend on technology more than ever. With that said, even the most advanced of processes have at least one constraint (Theory of Constraints principle) and that constraint must be properly managed.
Following the 5 step process the first thing we need to do is identify the issues/constraints in the system. This is quite broad and can cover anything from issues with human capital down to bottlenecks in the shipping process. To correctly identify the issue or issues that are holding the facility back, the identification process must be extremely detail-oriented and thorough in the discovery process. Without this full scope analysis simple errors can occur which in turn will lead to unexpected or undesired results.
The next steps would be to exploit and subordinate. Once we actually identify the constraint we have to turn the focus to how to get more production within our current capacity limitations. We have to be extremely careful when doing this
Get the most out of the constraint when it is identified, or “exploit” it. The constraint must always be managed in specifically working this part of the process.
Given three months to turn the plant around, Alex turns to Jonah, his old college physics professor who has become a manufacturing consultant, and enlists his help. Jonah has a unique and potentially risky approach to addressing the problems at the plant. First, he takes what can be a complicated
To analyze The Goal, Part 2, I have chosen the second option to analyze a complex value creation system using management concepts. Management is being able to prioritize, making decision and coordinate the entire process effectively and efficiently through others, while utilizing all the resources to achieve the organization objectives and goals. The novel continues as Mr. Rogo seeks for more suggestion from his colleague Jonah to keep the plant operating producing revenue. Mr. Rogo is having some personal issues at the moment, he is having a difficult time managing his family which is probably affecting his professional life and the decision he tries to make regarding in managing Bearington Manufacturing Plant. I would suggest that Mr. Rogo take into consideration the Theory of Constraints (TOC) to assist him in evaluating the production of enhancing the performance of the Plant. According to, Dalton, M. A. (2009). “This is a tool that has been used to help manufacturing operations identify and eliminate bottlenecks. This approach enables innovators to rapidly improve their growth results while gradually creating a culture of continuous innovation improvement.” (p.52).
Try to reduce overall production runs by aggregating different orders, thereby increasing batch size. Marketing strategy of delay in turnaround time is required to achieve this
All businesses face constraints. The limiting factors of time, influence, money, and labor play a factor in economic decisions. At some point, a short term working plan is developed from the perspective of “what can we do with what we have currently”? Should we stay the course, or make some adjustments? These decisions are important to the health of the organization. Saturation points become very important considerations. Just like a pitcher of water can sustain only so much sugar in a solution before sugar crystals will fall
For example if Tesco’s was making a new product and they were given a limited amount of money to invest in this product, this would limit how advanced this product and how useful this product would end up to be. A constraint for tescos would be the price war, all supermarkets, retailers etc want the best prices for their customers and
The next morning he meets up with Jonah in the hotel in New York. They begin to talk about the goal and the problems at the plant again. The next two figures that Jonah tells him about are statistical fluctuations and dependent events. He explains how these affect his plant the runs out of
Constraints are everything that influences the rhetoric or context of the writing. I suppose you could argue the exigence is the most important but I believe the constraints are what make the essay or article what it should be. If the exigence is the purpose then the constraints are what controls where the purpose goes and what is written or said by the rhetor and what the audience hears or reads. Constraints aren’t necessarily a bad thing or even limiting, I look at it as more understanding the limits of my audience and the reason for writing and the effect it will have on my audience. For this paper in particular without going into understanding the English language and all that one of my constraints would have been the topic. It would have made no sense to talk about horse pedigree in a paper about metal art so my writing had to stay on topic. Another constraint would be I assumed the readers were at least familiar with the trade so my acronyms were understood. While analyzing the paper I can’t forget to mention the kairos of my
The decision making process can also be divided into seven steps, where the first step will basically involve defining the problem. These steps allow for the main issue to be identified, and therefore the manager should make sure that it has been done correctly. After the problem identification stage, we can move forward and identify the limiting factors, and in this the manager should make use of all resources available to do it the best way. Some of the resources include information, time, personnel, equipment and supplies. Using this, managers can be able to identify the factors that might hinder them from achieving their goals.
The Goal by Eliyahu Goldratt is an entertaining and thought provoking business book. The story is about Unico manufacturing plant and its manager – Alex Rogo whose job and marriage is hanging in the air. Bill Peach, who is the factory executive comes into the plant and notices that production has gone down since Alex has been appointed manager. There is six months of production backlog and late shipment of order to customers. Unico is neither productive nor profitable. As a result Alex finds himself in an uncomfortable position of having three months to turn things around or the plant goes downhill.
The fivestep process consists of: 1. IDENTIFY the system 's constraint(s). 2. Decide how to EXPLOIT
Procedures inherent in the Theory of Constraints include, but are not limited to the following: identify the weakest (rather than the strongest) link, do not place a greater strain on the system that the weakest link (rather than the strongest link) can handle, and concentrate improvement efforts on strengthening the weakest (rather than the strongest) link. As such, answers A, B, and C are incorrect. To be effective, improvement efforts must be focused on the constraint, as stated in answer D.
When considering operational constraints we looked at people, location, premises, equipment, money, materials, other related activities and services.
There are constraints on capacity management and these are normally Time and Capacity. Time may be a constraint where a customer has a particular required delivery date. In this situation, capacity managers often "plan backwards". In other words, they allocate the final stage (operation) of the production tasks to the period where delivery is required; the penultimate task one period earlier and so on. This process helps identify whether there is sufficient time to meet the production demands and whether capacity needs to be increased, albeit temporarily.
Since the beginning of the industrial revolution manufacturing organizations have followed the rules that idle time is lost time. That the only way to make money is to keep everyone and everything operating at 100 percent. When in fact a plant that runs it's resources at 100 percent all the time is actually a very inefficient plant. Most of the time the struggle to meet efficiencies is taking the organization further away from it's goal. Excess production creates excess inventories that in turn ties up money and slows down or impedes cash flows. The key to balancing production is to search out those places in the plant that slows down all the processes behind it, essentially a bottleneck. Obviously the bottleneck can't just be removed so the rest of the process must be governed by the speed at which the bottlenecks can operate. Release of materials must be staggered so that just as a batch is sent through the bottleneck another batch is waiting in front of it to be processed. No other non-bottleneck area can be allowed to operate faster than the bottlenecks can handle otherwise the inventories will begin to climb again.