The Theory of Constraints

This is a methodology used by businesses to identify the most critical limiting factor that deprive a business from performing to its full potential in accomplishing its intended goals and then systematically trying to improve the bottleneck until the point that its no longer a limiting factor (Dettmer, 1997). The approach used in the TOC to its improvement is more scientific, it is involved in hypothesizing even the very complex system including processes and manufacturing. For a company to make profits in both the long term and short term, it has to apply this powerful tool of the TOC to achieve its goals. The thinking processes and the throughput Accounting. This method was introduced to a wide audience by Dr Goldratt, who is the founder of the TOC, in 1984 in his bestselling novel (Dettmer, 1997). Since that time, this theory has continued to develop and evolve and today it is the most important factor used by the world of management practices. One of its most appealing characteristics is that it integrally prioritizes on improving activities and its top priority being its current constraint.

The five focusing steps

The TOC gives a particular methodology designed for detecting and removing constraints identified as the Five Focusing Steps.

Step one constraint identification

In this step, the process used in manufacturing procedure is studied to identify the constraint. This is always a simple and most efficient technique where the technicians cross checks the manufacturing processes to identify the indications of the constraints (Dettmer, 1997)

. Such tests can involve;

looking for areas where expeditor processes are frequently involved

the equipment performances data is also reviewed to determine the equipment with the longest mean cycle time and then adjustment are done where equipment is found not operating within the required time due to influence of the external forces

Asking the operators to help them identify where they think the equipment output is not in line with the demand

Step two exploiting the constraint

The objective of this step is to maximize the output of the constraint by making use of the available resources. This step focuses on a rapid relief and quick wins; leaving more substantive changes (Dettmer, 1997).

Quality check is done immediately before the constraints to make sure that the already known good parts can be processed by the constraints.

The constraints should continuously be timetabled for operation e.g. approve overtime; the employees should be cross-trained to ensure that there are fully skilled employees to operate the constraints, the fewer changeover to be scheduled.

Some constraint works can be offloaded to other machines. This can be done even if they are not efficient in their performance.

Some works can be offloaded to other firms. Although, it should be the last resort incase other technique are not proving to be futile in relieving the constraints.

Step three subordinate and harmonize to the constraints

This step focuses on non-constraint equipment. Its primary goal is to support the wants of the constraints. Non-constraint equipment that is very efficient can be deemed as being secondary interests as long as the constraints operations are not adversely affected (Dettmer, 1997). By description, it is believed that all non-constraint equipment has, at least, some degree of additional capacity. The excess capacity can be a virtue since it enables a swift procedure of the constraints. The process of manufacturing can be purposely unbalanced. Step four performance elevation

In this step, a substantive action and changes are executed to breakdown the constraint. These adjustments can result in a significant investment of money and/or time. For example, hiring more staff or adding more equipment (Dettmer, 1997). The most important thing is to ensure that such investments are strictly evaluated to be sure of their effectiveness

Using the performance data

A technique known as short interval control can be used to identify the tactical actions that can surely improve the constraint performance

A setup reduction program can be implemented to decrease the productive time that was lost to changeovers

Purchasing additional equipment can be the last resort to supplementing the constraints

This step tries to deliver significant performance in breaking the constraint or moving the constraint somewhere else.

Step five repeating the process

This steps objective is to certify that the focusing steps are not executed as one-off improvement plan but instead the implementation is a continuous improvement process (Dettmer, 1997).

In a case where the constraint has been eliminated, it should be realized that there may be a new constraint. Therefore, the new priority is finding and eradicating the new constraint

If the limitation has not been successfully broken, then more work to eliminate it has to be done and a fresh look have to be taken to verify the constraint.Caution has to be taken in this step, and everyone has to remain vigilant to ensure that the improvement is continuous and ongoing. It seems like the focusing steps are a like in that it is okay to smack one constraint down and to jump to the next.

TOC is an important tool in the improvement of a process flow in Nissan Company. The theories implication are far reaching regarding analyzing and understanding the bottlenecks to a process and managing this bottlenecks in a better way to create an a process flow that will be grossly efficient (Dettmer, 1997).

When Nissan Company implements The Theory of Constraint successfully, then numerous benefits will be accrued in the company:

Profits will significantly increase since this is the most primary goal of Theory of Constraint for many companies

The company will experience swift improvements due to focusing all the concentration on one critical area known as the system constraint

The companys capacity is improved by optimizing the limitations.

Lead time is reduced by optimizing the constraints that result to a faster and smoother product flow

Inventory is reduced when the bottleneck is eliminated.

Total quality management

This is an integrated effort of an organization designed to improve the quality of products at every level. The Total quality management in particular and the quality improvement movement, in general, have become grossly popular for the past three decades (Hayes, 2007). This movement is generated by the fierce competitive force of the global market. Companies began to transform their traditional way of doing their business by adopting a more organizational approach of continuously focusing on improvement to become competitive. Although, introducing TQM into a business is not an easy task especially those that are not concerned about understanding the business processes and their customer needs (Hayes, 2007). One of the obvious challenges experienced in introducing TQM concept is making a significant impact on the business since TQM objective is to focus on the customers satisfaction (Hayes, 2007).

It also gives the management an opportunity to focus on the organizational culture by empowering employees during the continuous improvement. TQM approach tends to improve the effectiveness, competitiveness, and flexibility of an organization for the benefit of every stakeholder in the company (Hayes, 2007). If this is coupled up with good leadership, then it will result into a well-performing organization. It is a way of organizing, planning and understanding all the activities, and eliminating all the wasted energy and effort that is routinely spent in an organization.

Principles of TQM

Nissan Company should focus on the customers

Whenever the company is concentrating on the improvement of their products, customers are always the only focus (Hayes, 2007). This will prompt the company to train employees, improve on their level of improvement, integrating quality into process management, fostering quality management since customers are the only indicators to determine whether the companys effort are worthwhile

All employees involvement is assured

Deming 8th principal can be used to drive away fear from the work place and empowering employees through supportive missions of providing a healthy working environment (Hayes, 2007).

Centered process

Process thinking is the most fundamental part of TQM that should be focused on to achieve practical results.

Integrated system

The companys mission and vision must be known to every employee, and an integrated business system can be modeled by ISO 9000(Hayes, 2007).

Systematic and strategic approach

Quality had been integrated by the strategic plan as a core component. It should also be evolved to be based on stakeholders expectations instead of organizations strategic plan.

Some of the tools used to generate ideas in the approach to Total Quality Management include check sheets, cause and effect diagram, scatter diagrams, tools used in organizing the information include Flowcharts and Pareto charts and tools used for identification of problems consist of statistical process control chart and histogram (Hayes, 2007).

Lead-time too short

Failure to achieve plan

Cause-and-effect diagram

Material supply problem

Inflexible system

No stock available

Forecasting problem

Capacity constraint

Failure to deliver on time

Poor process control

Inadequate communication

Inadequate supplier management

Quality problems

Poor scheduling

Carrier performance

A fishbone diagram is a simple tool mainly used by manufacturing companies to analyze process dispersion, it mainly illustrates the main causes and sub-causes that lead to a symptom or effect or the cause that result due to the contributory factors in a supply chain.

Findings

Failure to deliver the finished products (Nissan vehicles) on time is resulted due to the following factors:

Stock being unavailable in the companys warehouses hence no stock to be supplied to the companys suppliers. The sub causes factors to this problem can be as a result of material supply problems and failure to achieve plan resulting from capacity constraint,

Poor carrier performance can cause late delivery of Nissan products to their customers due to poor scheduling and inadequate communication between the companys supply department and their suppliers or the customers.

When lead-time is too short, problems of failure to deliver on time can occur because of forecasting problems and inflexible system of the companys supply management.

Quality problems can also be a cause to late deliveries due to poor process control and inadequate supplier management of the company.

A hypothetical process (time-function) map for producing a recently released (within the past two years) product manufactured by the company

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