Theory of constraints in a company, Operation Management

Assignment Help:

Theory of Constraints in a Company

The XYZ Group is one of the largest landscaping companies in the United States. Sixty per cent of the business is landscape maintenance; the other 40 is landscape installation. Management knew the company could do better. In February 1996 the XYZ Group began its 'refinement process' using TOC. 

The TOC journey started with about 90 middle- and upper-management personnel reading The Goal. Most agreed that the TOC concepts made sense, but they didn't know how to translate them from the production environment to their landscaping business. They began to understand that the constraint was not necessarily something negative that should be avoided, but that it may be the most profitable part of the business - and if they could control the constraint they could then control profitability. It was realized that work was being done in batches and that local optimum was the focus.

They claim that the ongoing search for constraints taught them some valuable lessons: 

  • Don't change too many processes too quickly - people need to adjust
  • Everyone doesn't learn and accept change at the same speed
  • Document the existing processes and share the planned changes with the staff - involving them in the creation of the current reality trees and future reality trees provides everyone with a sense of involvement, understanding and ownership
  • For them, TOC was a 'refinement process' - this made it easier for personnel to accept the change as something more than a fad, especially as a company which was doing well prior to TOC
  • Measure and share results with other departments and divisions - all can learn from each other's experience
  • Appeal to all the senses - different people respond to learning and changing in different ways, provide the information in different formats - video, books, simulators, etc.
  • The results claimed by XYZ since implementing TOC:
  • Dramatic increase in customer satisfaction due to factors which include being able to make and meet scheduling commitments.
  • 20 per cent increase in client base with only a 12-13 per cent increase in staff.
  • Minimum 50 per cent increase in the bottom line.

Related Discussions:- Theory of constraints in a company

Explain preparation and analysis of balance sheet, Explain preparation and ...

Explain preparation and analysis of balance sheet. Preparation and Analysis of Balance Sheet: Balance Sheet is one of the significant financial statements of a company provid

How do you explain queuing theory, How do you describe queuing theory? How ...

How do you describe queuing theory? How can you use queuing theory in your organization to improve process capability?

Explain creating a constant flow of new products, Explain creating a consta...

Explain creating a constant flow of new products or continually updating and improving the current product line: Within a product planning activity, this is clear that b

Explain percentage must materials cost be reduced, Merk, Inc., produces ele...

Merk, Inc., produces electronics component on an assembly line. The standard cost for the component is $105 (labor $15, materials $60, and other costs $30). The sellings price is $

Define the upper and lower control limits, The overall average on a process...

The overall average on a process you are attempting to monitor is 50 units. the process standard deviation is 1.72. Determine the upper and lower control limits for a mean chart, i

Explain appropriate technique to develop a forecast, Air travel on Mountain...

Air travel on Mountain Airlines for the past 18 weeks was: Week Passengers Week Passengers 1 406 10 440 2 410 11 446 3 420 12 451 4 415 13 455 5 412 14 464 6 420 15 466 7 424 16 47

Explain several ways that companies learn from their mistake, What perceptu...

What perceptual problems do managers need to overcome with failures? How can these perceptual problems be minimized? 2. Describe the experiential learning process that companies, m

Explain objective of value stream mapping is to improve data, 1) Bill of ma...

1) Bill of material errors can cause serious problems for MRP system calculations of dependant demands 2) No matter what forecasting technique is used, the probability of a prod

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd