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Theory of Constraints Essay

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What is the Theory of Constraints?
The Theory of Constraints is an organizational change method that is focused on profit improvement. The essential concept of TOC is that every organization must have at least one constraint. A constraint is any factor that limits the organization from getting more of whatever it strives for, which is usually profit. The Goal focuses on constraints as bottleneck processes in a job-shop manufacturing organization. However, many non-manufacturing constraints exist, such as market demand, or a sales department's ability to translate market demand into orders.

The Theory of Constraints defines a set of tools that change agents can use to manage constraints, thereby increasing profits. Most businesses can …show more content…

Goldratt advocates that all improvement opportunities should be prioritized by their effect on the three measures, especially Throughput, for which the only limit on how high it can be increased is market size.

How Does Lean Thinking Compare to the Theory of Constraints?
Lean thinking is an organizational change method that is also implemented with the objective of increasing profit. Lean thinking originated in Japan, and is best exemplified by the Toyota Production System. Constraints placed on the Japanese manufacturing industry after the second world war lead Taiichi Ohno of Toyota to pioneer a new type of production system that was so different, and so much better, than mass production, as to warrant a new type manufacturing. Lean production is a method of organizing production using half the effort, space, inventory, and product development time compared with mass production. It also achieves fewer defects, and larger product variety. These improvements should result in increased sales, which is the key to re-deploying freed-up resources. Lean thinking codified and expanded upon the Toyota Production System to include non-manufacturing organizations, as well as product development efforts.

The objective of lean thinking, as with TOC, is to increase profit. This is

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