Theory of constraints

    Cards (13)

    • The Theory of Constraints proposes that every single process has a single constraint, also known as the bottleneck
    • Bottleneck
      The constraint that limits the total throughput in a process
    • Every process has a constraint
    • Improving the constraint is the quickest and most effective way to improve the throughput
    • When you invest into a bottleneck, a new and different bottleneck will appear in a different part of the process
    • Three ways to apply the Theory of Constraints
      • Investing into additional capacity
      • Reducing speed to the bottleneck
      • Combining both methods
    • Applying the Theory of Constraints
      1. Invest into additional capacity
      2. Reduce speed to the bottleneck
      3. Combine both methods
    • Investing into additional capacity will increase the throughput of the process
    • Reducing speed to the bottleneck will reduce work in progress (WiP)
    • Combining both methods will increase throughput, reduce lead times, and create idle time on each cycle allowing balancing loss
    • Just-in-time
      An alternative method that can provide similar results without having to do all these calculations
    • The Theory of Constraints can be applied in multi-stage manufacturing processes to increase capacity, reduce work in progress and inventory
    • Applying the Theory of Constraints will increase a business' profit margin
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