Summary Operations Management, processes and supply chains Ch 5

Chapter 5: Managing process constraints
Constraint = Any factor that limits the performance of a system and restricts its output. In
linear programming, a limitaton that restricts the permissible choices for the decision
variables.
Constraints can occur up or down the supply chain, with either the frm’s suppliers or
customers or within one of the frm’s processes like service or product development or
order fulflment.
Three kinds:
- Physical (Machine, labor)
- Market (Demand is less than capacity)
- Managerial (Policy)
Bottleneck = A capacity constraint resource (CCR) whose available capacity limits the
organizaton’s ability to meet the product volume, product mi,, or demand luctuaton
required by the marketplace.
The Theory of Constraints
Theory of constraints (TOC) = A systematc management approach that focuses on actvely
managing those constraints that impede a frm’s progress toward its goal.




Key Principles of the TOC




Practcal applicaton of the TOC involves the implementaton of the following steps:
1. Identfy the System Botleneck(s)
2. E,ploit the Botleneck(s)
3. Subordinate All Other Decisions to Step 2
4. Elevate the Botleneck(s)
5. Do Not Let Inerta Set In