Applying the Theory of Constraints to Management Problems

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Assignment Two: Applying Theory of Constraints (TOC) and Critical Chain (CC) Tools to Management Problems

MGMT206: Systems Thinking and Decision Making

Victoria Management School

Lecturers: Garoon Pongsart and Garry Tansley

Submitted by: Benjamin Pringle

Student ID: 301023129

Tutor: Hannah

Tutorial: 2.30 Weds

Date Submitted: Friday 29 May 2009, 2pm

Part One: Introduction

The theory of constraints (T.O.C) is a framework put forward by Eliyahu Goldratt in his book "The Goal", to describe the holistic approach to systems management The T.O.C. model provides managers with an approach to running a profitable and efficient organisation, which reflects the decisions and actions undertaken (i.e. cause and effect relationship).

A common way of looking at an organisation under Goldratt's model is to envision a 'chain', in which each part of a production process is inter-linked with the tasks around it. The speed and efficiency of the entire process (throughput) can only be as fast as the slowest part (the bottleneck). Bottlenecks are an extremely common constraint that occur all around us; from waiting in traffic at peak-hour to buying groceries, bottlenecks limit the speed of the entire process. In an organisational context,