Faculty of Management Studies

University of Delhi

Application of Theory
of Constraints in a
Manufacturing
Organisation
Submitted By:

Piyush Jain F263

Rajat Agarwal F264
Rakesh Routhu F265
MBA-FT
Section - B

Introduction of the Company and Problem

The company that we have focused on for our project is Mahavir International
Private Limited. This is a garment export company based in Noida. The company
has 3 manufacturing plants in Noida with an average production level of 1,20,000
garments.
During recurring periods, MIPL has encountered problems with increasing
manufacturing lead times. The manufacturing plant has been able to produce an
average of 1200 shirts per day in each unit in 4 assembly lines, normalized to an
eight hour workday, seven days a week. However, the throughput is a major issue
because the demand from the market has occasionally reached 2000 shirts per day
during the same time period. Consequently, the manufacturing plant has suffered a
daily lack of 800 shirts, which has resulted in a growing queue of shirts waiting to
enter the production line. An increased queue implies a higher total lead time for
each product. It was agred that an increased lead time will cause immediate
customer dissatisfaction.
The manufacturing lead time has averaged 5 days (including weekends) the recent
months. The average work in process amount to approximately 6000 shirts and the
average throughput is 1200 shirts per day. On an average manufacturing lead time
of 5 days is obtained. Besides the WIP of 6000 shirts, the queue prior to the
production consists of an average of 6000 shirts. A total of 12000 shirts is
equivalent to approximately 10 days manufacturing lead time which roughly
constitutes 2/3 of the total lead time. Hence, it is crucial to shorten the
manufacturing lead time while simultaneously increasing or maintaining the
throughput.
We have taken the production and the customer demand as a TOC system in which
the constraint can be identified. The plant follows an I-plant sequence. Material flows in a
sequence. The primary work is done in a straight sequence of events (one-to-one). The constraint is
the slowest operation.

Brief Description of Theory of Constraints (TOC)

The Theory of Constraints (TOC) is a methodology that identifies the most important factor that
restricts achieving a goal. This is referred to as a Constraint. Then the process systematically
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revamps that constraint until it is no longer the limiting factor. The constraint is often referred to
as a bottleneck in a manufacturing environment.

TOC undertakes a scientific approach to improvement. It postulates that every system, including
a manufacturing process, consists of multiple linked activities, one of which acts as a constraint
upon the entire system. A constraint is considered the weakest link in the chain.

What can be the ultimate goal of most manufacturing companies? To make a profit both in the
short term and in the long term. TOC provides a powerful set of tools to attain that goal such as:

The Five Focusing Steps: a methodology to identify and eliminate the constraints

The Thinking Processes: tools to analyze and resolve a problem

Throughput Accounting: a method to measure performance and guide management

decisions

Dr. Eliyahu Goldratt conceived TOC through his bestselling 1984 book The Goal. Since then,
TOC has continued to evolve and develop, and now is considered one of the best practices in the
world of management.

One of the fascinating features of TOC is that it inherently prioritizes improvement activities
with the top priority being the current constraint. In situations where there is an urgent need to
improve, TOC offers a highly focused methodology for creating rapid improvement.

A successful TOC implementation will have the following benefits:

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Increased profit

Fast improvement

Improved capacity

Reduced lead times

Reduced inventory

Core Concept
The core concept of the Theory of Constraints is that every process has a single constraint and
that total process throughput can only be improved when the constraint is improved. A very
important corollary to this is that spending time optimizing non-constraints will not provide
significant benefits; only improvements to the constraint will further the goal (achieving more
profit).
Thus, TOC seeks to provide precise and sustained focus on improving the current constraint until
it no longer limits throughput, at which point the focus moves to the next constraint. The
underlying power of TOC flows from its ability to generate a tremendously strong focus towards
a single goal (profit) and to removing the principal impediment (the constraint) to achieving
more of that goal. In fact, Goldratt considers focus to be the essence of TOC.
The Five Focusing Steps
The Theory of Constraints provides a specific methodology for identifying and eliminating
constraints, referred to as the Five Focusing Steps. It is a cyclical process.

Step 1: Identify the current constraint

Step 2: Make the most out of current resources by making quick improvements to the throughput
of the constraint

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Step 3: Review all the processes in the system to make sure that all of them are aligned with and
support the needs of the constraint
Step 4: If the constraint has still not moved then see what further actions can be taken to remove
the constraint. The constraint can be elevated so that it is no longer a constraint.
Step 5: Repeat from step 1 to identify and remove the next constraint. So this is a continuous
improvement process.

Methodology of TOC
Drum-Buffer-Rope
Drum-Buffer-Rope (DBR) is designed as a methodology for implementing the five step process
of continuous. It is used to design the schedule of a factory based on TOC.
The Drum is schedule for the systems constraint(s) and represents a portion of the
exploitation phase of the five-step improvement process. It is used to maximize the available
time of the constraint and to create the master production schedule (MPS). Like the bass drum in
a marching band, it is the drumbeat of the manufacturing facility. All other resources produce in
synchronization to the constraints schedule.
The Buffer is the level of inventory needed to maintain consistent production. It ensures that
brief interruptions and fluctuations in non-constraints do not affect the constraint. Buffers
represent time; the amount of time (usually measured in hours) that work-in-process should
arrive in advance of being used to ensure steady operation of the protected resource. The more
variation there is in the process the larger the buffers need to be. An alternative to large buffer
inventories is sprint capacity (intentional overcapacity) at non-constraints. Typically, there are
two buffers:

Constraint Buffer (immediately before the constraint; protects the constraint)

Customer Buffer (at the very end of the process; protects the shipping schedule)
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The Rope is a signal generated by the constraint indicating that some amount of inventory has
been consumed. This in turn triggers an identically sized release of inventory into the process.
The role of the rope is to maintain throughput without creating an accumulation of excess
inventory.

The Thinking Processes

The Theory of Constraints includes a sophisticated problem solving methodology called the
Thinking Processes. The Thinking Processes are optimized for complex systems with many
interdependencies (e.g. manufacturing lines). They are designed as scientific cause and effect
tools, which strive to first identify the root causes of undesirable effects (referred to as UDEs),
and then remove the UDEs without creating new ones.
The Thinking Processes are used to answer the following three questions, which are essential to
TOC:

What needs to be changed?

What should it be changed to?

What actions will cause the change?

Examples of tools that have been formalized as part of the Thinking Processes include:

Current Reality Tree: a current reality tree is a statement of an underlying problem and
the symptoms that come from it. It maps the sequence of cause and effect relationships
from the problem to the symptoms. Most of the symptoms come from core problem. So

removing the core problem may result in removing each of the symptoms.
Evaporating Cloud Tree: It is a diagram that helps to identify specific changes that
eliminate undesirable effects. It is quite useful for rresolving conflicts between different
approaches to solving a problem. It is used as part of the process for progressing from the
Current Reality Tree to Future Reality Tree.
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Future Reality Tree: It allows us to map out future expectations given that we will
introduce something new into our reality. It also allows us to test the future outcome

using known cause and effect to check that what we want is what we will get.
Strategy and Tactics Tree: It is a diagram that shows an implementation plan for
achieving future state. Creates a logical structure that organizes knowledge and derive
tactics from strategy.

Advantages of TOC

Productivity can be increased manifold with minimal changes to operations

One of the most powerful and cost effective tool to increase the production capacity
Ideal for shop floor teams due to simple communication and implementing process
Enhances team work as different teams come together to identify and work towards

removing the constraint.

Provides immediate and tangible benefits
It allows opportunities for growth without the need for additional space or staff

Disadvantages of TOC

Considerable time is required in training due to learning and mastery of the theory
Lot of time is required for problem identification and solving process
All the teams should cooperate and working towards the problem which may not be
possible

Application of TOC
As discussed, TOC has five steps: Identify, Exploit, Elevate, Subordinate and Repeat

S.N
O.

OPERATION

TIME STUDY

AVERA
GE

Std
De
v

Daily
capaci
ty

Capaci
ty per
hour
Page | 7

PINTUCK
MAKING

42
5

43
0

R/S @ PINTUCK

42

40

R/S @ NECK

60

59

65
12
0
4
3

62
12
8

PLACKET ATT
PLACKET
FINISH
TAKI @
PLACKET

SLEEVE ATT

58

60

ARMHOLE O/L
TAKI @ SIDE
JOINT

49

51

59

57

SIDE SEAM O/L

GATHER @
SHOULDER
GATHER @
BACK
COLLAR ATT TO
BAND

55

53

60

56

45

42

80
11
0
14
0
15
0

76
10
9
14
4
15
2

9
10
11
12
13
14
15

COLLAR E/S
COLLAR ATT TO
BAND

16

42

COLLAR FINISH
MAIN LABEL
17 ATT
30 32
HANGER LOOP
18 ATT
55 52
Below is the Process Chart of

42
7

43
2

42
6

2.6
428
1
1.4
39 43 40
40.8
7
2.3
55 62 60
59.2
2
2.7
65 68 60
64
6
12 12 12
3.0
1
0
1
122
3
2.7
42 37 36
40
7
2.6
58 63 55
58.8
4
1.1
50 52 49
50.2
7
1.8
59 62 57
58.8
3
1.2
52 55 55
54
6
1.8
59 55 57
57.4
5
1.4
42 41 44
42.8
7
2.9
82 85 81
80.8
3
12 11 11
4.4
1
5
1
113.2
0
13 14 14
3.7
9
0
9
142.4
2
14 14 14
2.2
9
5
9
149
8
1.8
35 32 30
31.8
3
1.7
54 50 52
52.6
4
a garment style with the time

67.29
705.8
8
486.4
9
450.0
0
236.0
7
720.0
0
489.8
0
573.7
1
489.8
0
533.3
3
501.7
4
672.9
0
356.4
4
254.4
2
202.2
5
193.2
9
905.6
6
547.5
3
study.

8.41
88.24
60.81
56.25
29.51
90.00
61.22
71.71
61.22
66.67
62.72
84.11
44.55
31.80
25.28
24.16
113.2
1
68.44

Step 1: Identify:
Since the requirement is 300 shirts per day per assembly line, all the operations
with daily capacity less than 300 form the constraints. They have been highlighted
in red. The standard deviation in each process in not very high and hence can be
ignored.
The bottleneck in the system are process 1,5,14,15 and 16 which were occurring
due to not using of proper machinery and high cycle time for particular operations
Step 2: Exploit:
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Looking at the processes, the following recommendations were provided:

a) To improve cycle time of few processes, few operations were clubbed
together. For eg: operation no. 1 and 17 were suggested to be made
by using a single operator as both require similar machinery.
b) Similarly other bottleneck operation were clubbed together keeping in
mind the type of machinery used.
c) Another suggestion that we gave was the change of layout. We
suggested moving few machines to reduce idle time which was
occurring due to machine distance.
Step 3: Elevate:
The most important recommendation was to allow a more lean approach so that
interchangability and interoperability is easier. Workers were trained to handle and
operate more than 1 operation on the same machine. Workers who were not skilled
enough to handle two operations were shifted to other operations and the most
skilled workers were the ones who were working on the bottleneck operations. A
team was set up which observed the time for each process and found the
bottleneck areas and tried to rectify in the same manner that we had done. Also a
few more advanced UBT machines were suggested to put on the bottleneck
operation so reduce cycle time of each operation.
Step 4: Subordinate:
To subordinate the production line to the constraints, few processes were
suggested. Firstly line balancing was suggested and a hiring of a more skilled
workforce so as to complement the line balancing.
Step 5: Repeat:
After this constraint was fixed, the process was repeated to find other constraint
areas. The next constraint found was quality. Further constraint fixing couldnt be
done due to the non availability of time but few steps were suggested to the
company to remove that constraint.

The next page shows the table showing current time study chart after the removal
of constraint but with other constraint added.

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S.NO.

OPERATION
PINTUCK
1 MAKING
2 R/S @ PINTUCK
3 R/S @ NECK
4 PLACKET ATT
PLACKET
5 FINISH
TAKI @
6 PLACKET
7 SLEEVE ATT
8 ARMHOLE O/L
TAKI @ SIDE
9 JOINT

10 SIDE SEAM O/L

GATHER @
11 SHOULDER
GATHER @
12 BACK
COLLAR ATT
13 TO BAND
14 COLLAR E/S
COLLAR ATT
15 TO BAND
16 COLLAR FINISH
MAIN LABEL
17 ATT
HANGER LOOP
18 ATT

Daily
Rejecti
capaci Accept on
ty
ed
%age
67.289
72
67
0.43
705.88
24
699
0.98
486.48
65
484
0.51
450
438
2.67
236.06
56
233
1.30
720
489.79
59
573.70
52
489.79
59
533.33
33
501.74
22
672.89
72
356.43
56
254.41
7
202.24
72
193.28
86
905.66
04
547.52
85

687

4.58

461

5.88

568

0.99

487

0.57

521

2.31

483

3.74

609

9.50

350

1.81

249

2.13

202

0.12

192

0.67

884

2.39

547

0.10

In the above chart, we can see that operation 6,7,11,12 are bottleneck operation as
rejection %age is greater than 3%.

Conclusion
Hence with help of the case studied above, we can conclude that TOC, with its Five
focusing steps and all of its related philosophy including Thinking process and drum
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buffer-rope scheduling method, provides an approaches for identifying and

exploiting bottlenecks in the organization.
After the implemenatation of TOC we observed that the initial constraints were
removed but in the end some new constraints came up. This shows that TOC is an
ongoing process and in order to make the process mopre efficient we further need
to apply TOC again. However in the above manufacturing process the steps of TOC
led to improvements in operations, decrease in lead time, decrease in cycle time,
improves the due date performance, throughput increases and eventually
contributes in improvement of the whole system.

Bibliography
1. http://www.leanproduction.com/theory-of-constraints.html <Accessed on
March 11th 2015>
2. http://www.dbrmfg.co.nz/Strategy.htm <Accessed on March 11th 2015>
3. http://www.mahavirint.in

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