A Review of TOC.docx - A Review of Goldratt\u2019s Theory of Constraints(TOC \u2013 lessons from the international literature Steven J Balderstone and

A Review of TOC.docx - A Review of Goldratt’s Theory of...

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A Review of Goldratt’s Theory of Constraints (TOC) – lessons from the international literature Steven J. Balderstone and Victoria J. Mabin School of Business and Public Management Victoria University of Wellington New Zealand [email protected], [email protected] Abstract The two authors are finalising the first comprehensive bibliography on the Theory of Constraints (TOC)[23] which is to be published by North River Press, the publishers of several works on TOC, most notably Eli Goldratt’s seminal works [11-17], such as The Goal, It’s Not Luck, and Critical Chain. Based on our extensive search of the literature, this talk will draw on examples of applications of TOC, and summarise important findings on the theory and practice of TOC. Although initially a manufacturing method, TOC has now developed into a theory about management: a powerful systemic problem structuring and problem solving methodology which can be used to develop solutions with both intuitive power and analytical rigour. TOC is increasingly being applied to situations outside the manufacturing context, including distribution, marketing, project management, accounting - in fact, any situation involving change to a system. 1 Introduction The main motivation for the research reported in this paper was the realisation that TOC is growing very rapidly, and we simply did not know what was “out there”; ie what had already been tackled. Hence our mission two years ago was to conduct a literature search to identify recent works (mostly post 1990). This search has culminated in an annotated bibliography, which is to be published shortly by North River Press [23]. Alongside this literature research grew a Masters thesis, pulling all this material together, both the theory and the practice. [2] This paper will first briefly outline the background to TOC, and then report on the practice-related material from the survey of published applications and the findings. Readers wishing to gain the benefit of a fuller treatment of this material for a review of the entire TOC field are referred to [2]; while those wishing to obtain a copy of the bibliography are referred to [23]. In its brief 20-year history, TOC has developed rapidly in terms of both methodology (see for example [6], [8]) and area of applications (see for example, [19], 27]). In the late 1970’s, the founder of the Theory of Constraints (TOC), Eliyahu Goldratt, Israeli physicist turned business guru, developed a revolutionary method for production scheduling [10] which was in stark contrast to accepted methods available at the time, such as MRP. Central to the TOC philosophy was that any organisation (or system) has a constraint (or small number of constraints) which dominate the entire system. The secret to success lies with managing these constraints, and the system as it interacts with these constraints, to get the best out of the whole system. The Drum-Buffer-Rope scheduling
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system, together with the general principles espoused in The Goal, were elements of TOC that became part of successful manufacturing management.
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