Comparison of Toc vs Lean

1195 Words Dec 16th, 2011 5 Pages
Assignment #5:
Comparison of Theory of Constraints (TOC) versus Lean Manufacturing

MBA 571
November 22, 2011

In today’s business world, competition is fierce and manufacturers are struggling to squeeze out operational costs reductions. To stay in competition, more and more organizations are trying to determine what improvement method will work best and fit best with their culture. Each improvement methodology appears to be driving toward common tools and concepts. However, different methodologies begin the journey from different perspectives. Even though each improvement methodology contributes valuable concepts, ideas and techniques to every organization not all of them serve to the needs of organization if leadership doesn’t
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| Waste removal will improve business performance. Many small improvements are better than systems analysis. | Primary Effect | Fast Throughput | Reduced flow times | Secondary Effects | Reduced operating expensesLess inventory.Throughput accounting systemThroughput—performance measurement system.Improved quality. | Less variation.Uniform output.Less inventory.New accounting system.Flow—performance measure for managers. Improved quality. | Criticisms | Minimal worker input. Data analysis not valued. | Statistical or system analysis not valued. |
Advantages of TOC Even though these techniques diverge in a number of key areas and it can be seen that TOC has several advantages. Lean sees an organization as a collection of parts and aims a local optimization system where TOC focuses on a local action with holistic optimization for the organization.
The Theory of Constraints (TOC) is a relatively new managerial philosophy that has been steadily evolving since the early 1980s. TOC does advocate buffers at inventory at selected points to ensure that neither the constraint nor the customer is left waiting. Lean aims to reduce lead time and inventory and thus costs by eliminating waste; TOC aims to reduce lead time and inventory in order to gain capacity, increase Throughput (i.e. the rate at which money is generated through the sale of products) and provide a competitive edge – thus enabling the business to grow.
Lean promotes maximum resource efficiency,
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