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Theory Of Constraints

Application To Business Process Reengineering

TOC

Background 

Organisations everywhere have been chasing after Six Sigma quality improvement and seeking lean objectives to keep the organisation Lean and trim to achieve least cost in production and service. These are of course necessary in view of the continuous demands brought about by disruptive technologies in smart technologies, artificial intelligence, automatic processes and low cost automation. These disruption are putting a strain on organisations to adapt to meet the ever-changing working environment that requires new ways and new skills to cope.

Adapting to rapid change in the digital world subjects employees to a dichotomy to either learn new skills or become obsolete. While these changes occur as a direct demand of the larger change in the business-to-business environment, organisations have to reexamine the business processes to determine the effect of the change on the workflow.

Very often, organisations make adjustments to resources required to suit the new way but have no clue on how the adjustments to the resources impact overall performance. This is understandable in view of the lack of technical knowhow to dissect the process workflow to meet the commonly stated requirements of:

1. Reduced Delivery Cycle Time
2. Little Waste
3. Improving Capacity of Processing
4. Improving Organisation Resource Performance
5. Lowering the Operating Cost
6. Meeting Customer Satisfaction

 

What is Theory Of Constraints

TOC is a decision-making algorithm using knowledge of physical measurement to seek out decision decision to manage change with a desirable and predictable outcome. Essentially, TOC identifies the system constraints, that is the most significant conflict of a problem, or the system constraints that inhibit a desirable outcome.

According to System Theory, all systems reach obsolescence when the rate of return diminishes at the optimal level. Something must then be changed so that constraints of the optimal limit can be removed. For instance, in the field of innovation to develop innovative products. A product that has reached its current design limit can be changed by knowing:

1. What needs change
2. What to change to
3. How to make the change

 

Information Gathering And Analysis To Develop TOC

The analytical approach of TOC is focused around the use Tree Charting Diagram to analyze the TOC process. These mapping tools are:

1. Current Reality Tree Diagram to find the Core Problem

2. System Conflict Diagram to identify the conflict

3. Future Reality Tree Diagram to determine what to change to

4. The Prerequisite Tree is used to identify the obstacle to achieving desirable objective

5. The Transition Tree provides a series of step-by-step instructions on How To Make The Change

 

The method of mapping application varies from one application to another. How the above maps are to be charted depends on the effectiveness of the approach in revealing the information required:

a) Search for Root Cause
b) Identify the System Conflict
c) Seek the Right Solution
d) Removing All Obstacles in Implementation
e) Detailed Road Map to Make the Change

 

How best to apply the many types of Tree Diagrams effectively is dependent on the skill and experience of the instructor in using the Tree Diagram as a mapping tool.
Cultural Transformation of organisation on how it should move forward to improve profitability can be provided by APRC.

Contact Administrator at aprcline@singnet.com.sg