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An Assessment on the Impact of Theories of Constraints to Seagate Technology.

Extracts from this document...

Introduction

An Assessment on the Impact of Theories of Constraints to Seagate Technology.

By

Kevin McDermott

image10.png

Magee Campas

B.A.Hons. Business Studies with Specialisms

Supervisor: - Edel O’Niell

Date:  03 – May - 2001

Contents

Acknowledgements

Abstract

Chapter 1

Introduction to the Topic

Seagate Technology Introduction

Aims & Objectives

Research Hypothesis

Hypothesis 1

Hypothesis 2

Research Significance

Chapter 2

Literature Review

Operations Management

Taylorism

Peter Drucker

Lean manufacturing

Overall Equipment Effectiveness (OEE)

The History and Evolution of TOC

Theories Of Constraints

Key Stages in TOC

Drum Buffer Rope Analogy

Expected Results from the Application of TOC

TOC Compared to Lean Manufacturing

Capacity

Summary

Chapter 3

Methodology

Research Questions

Research Methodology

Choice of Research Collection

Questionnaire Distribution

Questionnaire Design

Restrictions of Questionnaires

In – Depth Structured Interview

Interview Design

Restrictions of Interviews

Case Study

Seagate Springtown Case Study

Hitachi Introduction

Philips Introduction

Chapter 4

Findings and Analysis

Seagate’s application of Theories of Constraints in comparison.

Seagate in Detail

Acknowledgements

The road has been long and dusty with more chicanes than straights.  I have stumbled upon many people along that road, many of which I would like to thank, as I deeply know without their help, I could not have reached this point.

Many thanks to Patrick Miskelly, who set the wheels in motion.  Thanks to Jimmy Logue, who’s support, friendship and advice picked me up when the going got tough.  Thanks to Edel O’Niell who’s mentoring and tutoring proved invaluable in the compilation of this research.  Thanks to everyone else who helped in my research including those in Hitachi and also in Seagate whom I have tormented for the past few months.  I would also like to thank Eamon my Manager, who provided me with enough time to conduct this research.

To my parents, who have waited long and patiently for this day.

Thanks to my role models, brother Shane and sister Michelle.

I would like to thank my wife Shauna, whose cups of tea and renowned toast have provided me with the energy to burn late into the night.

...read more.

Middle

image30.png

O.E.E. would provide an excellent cornerstone to T.O.C.  

The objective of the OEE study is to develop recommendations and ideas that improve OEE at the bottleneck tool/area.  In general, bottlenecks are found where there is both chronic high WIP coupled with chronic high tool utilization.  The bottleneck tool is identified to allow primary focus on the area with the greatest return for the effort.

The History and Evolution of TOC

Theories of Constraints was developed in the early 80s by a company, which sold ‘production scheduling software’.  E.M. Goldratt was at the time the Chairman of the company.  The product which they developed formally known as OPT (Optimised Production Technology) was a hybrid approach to manufacturing that managed restricted resources and optimised the utilisation of the most constraining ones, the bottlenecks.

Goldratt’s motivation for conveying and developing his theories is outlined.

“Most of our clients were willing to testify that by using our software, were able to increase production, while decreasing inventory.  We had very reputable clients, Bendix, Kodak, Philips Lucas…. I was frustrated that we didn’t have thousands of such clients.  Every company was busy installing computer packages and our product was the only finite capacity application that really worked.  I had an idea which was to convey my method through a novel about manufacturing”

Eliyahu M. Goldratt. “My Saga to Improve Production.” Pg.1

The Goal, Goldratt’s first business novel conveyed the message of TOC and the novels success in selling over 2 million copies, paved the way for other novels further streamlining Goldratt’s theories.  It was not until the second edition of The Goal that he refined this into a five-step process of ongoing improvement.

...read more.

Conclusion

Figure 4.4

image25.pngimage02.pngimage03.pngimage02.png

Figure 4.5 presents Seagate’s WIP levels with Cycle Time.  From the Cycle Time data at its highest point measured against its lowest point equates to an improvement of 15.3%.  As the WIP levels fall it is predictable that Cycle Time will follow as there will be less WIP in the line decreasing queue time at machines, rework and static.  This makes the organisation more responsive towards the customer which tie into the primary research in which all respondents apart from those who didn’t know, believed TOC achieved what it set out to achieve or passed its goals.

Figure 4.5

image26.pngimage06.pngimage03.pngimage04.pngimage05.png

I cannot feature or disclose financial data due to Seagate’s Confidentiality, however, the results suggest immense savings with reduced cycle – times and WIP and increased customer shipments.  However these savings should be offset against the cost of implementing TOC!

This example of the Gold machine is just one of many TOC projects which has been carried out.  Thomas Logue, (interviewee) however has made it clear that although TOC has been applied many time over, there has always been a  constraint within the manufacturing process. When asked to expand on this, he believed it was due to the nature of the environment in which Seagate operates as product life cycles of 6 months introduces new products on a monthly basis, which shifts the capacity requirements of the machines.

Summary

This chapter presented and analysed data based in the methodology in Chapter 3.  Each of the objectives was addressed in a manner to fulfil the aims laid out in chapter 1.  The analysis presented a critical evaluation of Seagate Technology’s approach to Theories of Constraints.  Part one of this chapter contrasted features of Seagate’s Theories of Constraints application with another manufacturing organisation.

Theories of Constraints

...read more.

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