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The World
ofthe Theory
of Constraints

AReview ofthe
International Literature
The CRC Press!APICS Series on Constraints Management
Series Advisors
Dr. James F. Cox, III Thomas B. McMullen, Jr.
University of Georgia McMullen Associates
Athens, Georgia Weston, Massachusetts
Titles in the Series

Introduction to the Theory of Constraints (TOC) Management System
hy Thomas B. McMullen, .II'.
Securing the Future:

Strategies for Exponential Growth Using the Theory of Constraints

hy Gerald 1. Kendall
Project Management in the Fast Lane:

Applying the Theory of Constraints

hy Rohert C. Newhold
The Constraints Management Handbook

hy .lames F. Cox, 111 and Michael S. Spencer
Thinking for a Change:

Putting the TOC Thinking Processes to Work

hy Lisa .I. Scheinkopf
Management Dilemmas:

The Theory of Constraints Approach to

Problem Identification and Solutions

hy Eli Schragenheirn
The Measurement Nightmare:

How The Theory of Constraints Can Resolve

Conflicting Strategies, Policies, and Measures

by Debra Smith
The World
of the Theory
of Constraints
AReview of the
International Literature
Victoria 1. Mabin, PhD, Jonah
Steven J. Balderstone, MMS, Jonah
School of Business and Public Management,
Victoria University of Wellington,
Wellington, New Zealand
The CRC PresslAPICS Series on Constraints Management
9 .....",
Taylor & Francis
Taylor & Francis Group
Boca Raton London New York Singapore
A CRC title, part of the Taylor & Francis imprint, a member of the

Taylor & Francis Group, the academic division of T&F Informa pic.

Library of Congress Cataloging-in-Publication Data
Mabin, Victoria J.
The world of the theory of constraints : a review of the international literature /
Victoria J. Mabin, Steven J. Balderstone .-Ist ed.
p. cm.

Includes bibliographical references and index.

ISBN 1-57444-276-7 (alk. paper)

I. Production management-Bibliography. 2. Theory of constraint s.

(Management)-Bibilography. 3. Production management-Abstracts.
4. Theory of constraints (Management) -Abstracts. I. Balderstone, Steven J.
II. Title
TS I55.M264 1999
016.6585-dc2I 99-042146
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Preface

Welcome

W
elcome to the first edition of The World of the Theory of
Constraints: A Review of the International Literature. In this book
you will find a summary of recent published research in the area
of the Theory of Constraints (TOe), an area that was founded by Dr. Eliyahu
M. Goldratt. The book is intended to provide a valuable aid to those using the
TOC or researching in this area.
Why, this book?

TOC is a fast-growing area, and the problem with a fast-growing area is that
you can quickly feel out of touch with developments. There has been a rapid
expansion of material available on TOe. The number of books published has
been particularly noticeable, and many of these have been by authors other
than Dr. Goldratt. This book is the culmination of a research project started
in 1996 that set out to compile an annotated bibliography of published mate
rial relating to TOe. Since then, we have explored databases, and sought out
papers and books from as wide a range of sources as possible, and have inte
grated and synthesized this material in a Master's thesis. 1 On the way,we re
alised that other people could benefit from this bibliography-hence the
book.
lSee Balderstone, S. Examiningthe Theoryof Constraints: A Source of Operational and Financial Performance
Improvement. Master of Management Studies Thesis, Victoria University of Wellington, Wellington, 1999.
VI The World of the Theory of Constraints
What we did
We endeavoured to track down all items pertaining to TOC published since
1990. We chose this date in order to focus on most recent developments and
also to screen out those articles more influenced by OPT (Optimised
Production Technology), rather than TOC as we know it now. There are
exceptions to this rule: most notably, the works by Goldratt himself are
included.
Many of the abstracts that appear within this publication were expressly
written for the bibliography by the present authors. The balance were written
by the authors of the papers/books themselves, or by other reviewers. The ab
stracts are generally intended to provide a short summary of the particular
work, rather than merely whetting the appetite of the reader by just mention
ing the issues examined. We have made every effort to accurately represent the
work being summarised, within a ISO-word limit.
The scope of works included within this book is limited to those works
which have some specific reference to the TOC, including Synchronous
Manufacturing (SM) and Constraint Management (CM). Many book reviews
of TOC publications were uncovered by the research. Generally, these reviews
are not included, unless they presented some additional discussion on the is
sues of TOC, beyond that of a merely descriptive review. We have included a
number of conference presentations, but not all: our general rule was that if a
written paper was available, then we would include the item. Latterly we have
also included some material published on the web, in cases where we felt they
provided a significant contribution. The published articles and books referred
to are mostly written in the English language.
The research for this publication relied on extensive use of on-line re
sources, accessed via the library services of the Victoria University of
Wellington. We found out that relying on a one-off or single source search is
very misleading. Over a dozen different academic journal and business data
bases were accessed to find material relevant to TOe. These were accessed on
a regular basis, locating new items each time. A broad range of search para
meters was used to identify relevant material, with keywords such as Goldratt,
TOC, constraint, SM, bottleneck, throughput. Searches using standard web
search engines uncovered additional material. We also used the tried-and-true
method of scanning the bibliographies of each article or book to identify
other relevant works. Many hours were spent in dark corners of the library
thumbing through journals to obtain articles published over the past decade.
The Amazon.com website was a valuable source of information on the many
Preface VII
books available on TOe. The multi-search approach is indicative of the extent

of the effort that went into ensuring that all known published material on
TOC was included in the bibliography.
Map of the book

The book is organised into three sections: first the general overview of the
TOC area is provided in the Introduction. This section includes our analysis
and interpretation of the results of the search.
The second section contains the abstracts of all the material we have
located.
The third section provides a number of indexes, including author, key
words, and subject indexes, which enable the reader to identify material in a
particular area. We have also included lists of books, journals, publishers and
websites for your information.
Apologies to those we've missed

Despite our best efforts to locate all work relating to TOC, it is inevitable that
we will have missed some works, and our sincere apologies go to those whose
work has not been included. If you notice an oversight, please contact the au
thors of this bibliography so that we can make amends in future editions.
Please accept our invitation to send us articles or contact us when you write
(or come across) new articles and we will update our bibliography for future
editions.
Thanks to those who've helped

There are many people without whose efforts this book would never have
been written. Firstly, we thank Goldratt for inspiring us by his great books and
charismatic personality to explore this area. Thanks to all those who have
written articles, papers or books, especially to those who sent us copies. We are
grateful that you have taken the time and effort to share your experience with
others so that we may all benefit; without your contributions, this work would
obviously not exist. We would also like to thank Jim Cox and Graham Rand
for sharing their bibliographies with us, and Jeremy Merrin and the Avraham
Y. Goldratt Institute for their help in spreading the word about our project
and seeking material for it. We would like to thank our assistants, Blair Scott,
Melissa Ho, and Sophia Lum who have helped with the compilation of the
VIII The World of the Theory of Constraints
bibliography and preparation of the manuscript. Our colleagues at Victoria

University of Wellington have provided support in many ways: in particular
our thanks go to John Davies, John Brocklesby, Pat Walsh, and Michelle
Baron. Special thanks must go to the people who operate the Victoria
University of Wellington Library Interloan system for their friendly coopera
tion, and to Janet Keilarfrom our Faculty Library for her unwavering support.
We would also like to acknowledge our grateful thanks for the financial sup
port from research grants from the University and Faculty Grants
Committees. We would also like to thank Drew Gierman, Pat Roberson &
Susan Zeitz from CRC Press for their wonderful support. Finally, thanks must
go to our families and friends for their support and understanding during the
process of compiling this book.
Biographies

Victoria J. Mabin, Ph.D., B.S.e(Hons), Jonah

Dr. Mabin has been interested in Goldratt's TOC since 1987 when she first
came across The Goal. Since then she has actively used and developed many as
pects ofTOC in her research, consulting, and teaching. She undertook the first
application of Goldratt's methods in New Zealand at Expozay International
which has been used as an example by many others, and has published fairly
widely on TOe. In her current post at Victoria University of Wellington, New
Zealand, she teaches and researches in the areas of problem solving and deci
sion making, and operations management, in which arenas TOC has played a
prominent part. Prior to joining Victoria University in 1991, she worked for
NZ's Department of Scientific and Industrial Research for over a decade, work
ing as a consultant to business, government, and industry on a range of strate
gic and operational problems. Her formal academic training includes an
Honours degree from the University of Canterbury (in Economics) and a
Ph.D. (in Operational Research) from the University of Lancaster, U.K.
Steven J. Balderstone, MMS, BCA, NZ Dip. Bus., Jonah

Steven Balderstone is currently lecturing in Operations Management and
Decision Sciences at Victoria University of Wellington, to undergraduate and
post-experience students. He is working towards attaining a Ph.D., building
upon his background in operations management, decision sciences,and systems
thinking. His interest in the Theory of Constraints grew after reading The Goal
assigned reading for an undergraduate course run by Dr. Mabin. He then worked
as research assistant for Dr. Mabin, which uncovered numerous successstories of
TOC application. Further study on TOC at both undergraduate and graduate
level then led to his Masters thesis: The Theory of Constraints: a source of opera
tional and financial performance improvement for manufacturers?, which pro
vided an integrated review of the TOC methodology, and collated and analysed
the empirical evidence of TOC applications. Steven Balderstone has also helped
several organisations apply TOC with impressive results.
Dedication
This book is dedicated to

all past, present and future users

of the Theory of Constraints,

especially

Chris, Rebecca, and Emily

Table of Contents
Preface V

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1

Table of TOC Application Data . . . . .. . . .. .. . . . . . . . . . . . . . . .. . . .. . . .. 22

Bibliographies and Abstracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 31

The Theory of Constraints Book List. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 183

Keyword Index.. .. . . 187

Industry Groupings Index. .. 191

Author/Co-Author Index...... 193

Publication Source Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 203

Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 211

Partial List of Doctoral Dissertations , 221

Introduction

What is TOC?
T
OC is a multifaceted management philosophy, which emerged in the
early 1980s. The development of TOC is credited in the main to
Goldratt, an Israeli physicist who has had a remarkable impact on the
business world, especially in the u.s. His first foray into the business world
was reputedly to help a friend organise the manufacture of chicken coops in
the late 1970s. Goldratt's revolutionary method for production scheduling
[17] was in stark contrast to accepted methods available at the time, such as
Materials Requirements Planning (MRP). From these humble beginnings, we
have seen a systematic reexamination of some of the most fundamental busi
ness problems facing us today, culminating in a new approach to address such
problems, The TOC is more than a set of tools or techniques, though it cer
tainly contains these. It is more fundamentally a paradigm shift which de
mands that we think about our problems, our goals and objectives, policies,
procedures and measures, in a different way.
Goldratt's public contributions have mainly been through his books
[18-24], seminars, and interviews, which have had a major impact on all the
works represented by these abstracts. The Avraham Y. Goldratt Institute has
had a major contribution through providing education in the methods to
many of the authors. At the time of writing, the Goldratt Satellite Program
featuring eight live interactive shows with Goldratt speaking and answering
questions on TOC-has just finished, and so we might fairly expect a whole
new raft of applications to emerge. This book will therefore provide a bench
mark for how things were before the impact of the GSP.
2 The World of the Theory of Constraints
TOC is also known by various other names, including Constraint(s)

Management, Synchronous Flow Manufacturing (SFM), Synchronous
Production (SP), and OPT. These terms are sometimes used synonymously
with the TOC, but are more often (and more correctly) used to describe the
earlier components of TOC rather than the more recent parts, such as the
Thinking Processes.
Historical perspective
In its brief 20-year history, TOC has developed rapidly in terms of both
methodology (see for example [12], [14], [34]) and area of applications (see
for example, [27], [36]). Central to the TOC philosophy was that any organi
sation (or system) has a constraint (or small number of constraints) which
dominate the entire system. The secret to success lies with managing these
constraints, and the system as it interacts with these constraints, to get the best
out of the whole system. The Drum-Buffer-Rope (DBR) scheduling system,
together with the general principles espoused in The Goal, were elements of
TOC that became part of successful manufacturing management.
Even so, some companies failed in their attempts to implement OPT, the
software package based on Goldratt's method [17]. Such failure was usually di
agnosed as an inability or unwillingness by the organisation to discard old tra
ditions, and embrace the new philosophy and the new measures that were
concomitant with successful adoption. The most common measures that need
to be reviewed are accounting measures, as TOC promotes the use of global sys
temwide measures, rather than local measures. The motivation for this is that
if a system as a whole is to achieve its goal, it is best for the system's individual
parts to work as a team in "sync" rather than at their own individual speeds.
Given that the major constraint to improvement was the resistance to
changing these measures, it is not surprising therefore that this is the direction
that TOC followed, to tackle this biggest constraint to adoption-behaviours.
As Goldratt realised, we must use the psychological aspects to assist rather
than impair the process. Thus the TOC Thinking Processes were born: a suite
of tools that allows people to learn and use the Thinking Processes that enable
them to develop their own solutions to complex problems, and to implement
them successfully. This suite of tools enables analysis of a situation, using the
rigour of cause and effect thinking following strict logic rules, combined with
the intuition and knowledge of the persons owning, or intimately involved
with, the problem. The Thinking Processes enable more complex problems
("messes") to be tackled, and have much in common with other soft systems
Introduction 3
approaches, such as Soft Systems Methodology (SSM) and Strategic Options

Development and Analysis/Cognitive Mapping developed in the U.K. It is
similar to these approaches in that it allows decision makers to map intuitive
knowledge and soft relationships, while at the same time TOC provides more
rigour in the mapping of these relationships, through its logic rules, the
Categories of Legitimate Reservation.
In our opinion, the TOC Thinking Processes now offer much to managers
and management consultants, operations researchers, systems analysts and
management scientists, as well as the more traditional users-operations
managers. We believe they are of benefit to any person or group involved in
problem structuring or problem solving/decision making, in both business
and personal aspects of their lives. The TOC methodology contains many el
ements that are worthwhile additions to the practitioner's toolbox. The TOC
approach is not a panacea, nor a recipe, but it is a philosophy that helps lead
to success in a very real way.
Components of TOC
There are various components within the TOe. On the next page is a schema
of the components of the TOC adapted from Cox and Spencer [12], which or
ganises the TOC into three main branches: Operations Strategy Tools,
Performance Measurement Systems and Thinking Process Tools, and shows
the components or tools within each branch. The definitions of these compo
nents can be found in the Glossary at the end of the book.
What we found
A very favourable picture of TOC

The survey identified around 400 items; including nearly 40 books, relating to
TOe. Of these, only a handful contained negative comments, and none of
these related to actual applications of the methodology. These few negative
comments were mostly due to an emotive response to Goldratt's ideas, and in
some instances due to a misunderstanding of the methodology. On the other
hand, there have been some notable achievements recorded in the literature:
for example, United Electric Controls Ltd. faced very complex challenges,
and applied the TOC (as per The Goal). The results were so impressive
that they won the coveted Shingo Prize in 1990 for gains in manufacturing
productivity [15].
,f;:o.
The Theory of Constraints (TOC)
Operations Strategy Tools

I
Thinking Process Tools
;!
('l)
I II I
Five Focusing Steps VAT Analysis Tree Diagrams Clouds Audit processes/guidelines ~
::l...
Current Reality Tree Evaporating Cloud Categories of Legitimate Reservation Q.
Applications Performance Future Reality Tree Single UDE Clouds Five Layers of Resistance o...,
Measurement Negative Branch Reservation Six Levels of Knowledge S
('l)
Systems Prerequisite Tr;e I ;!
I I I Transition Tre~ g;
Production Distribution Project
~
Management Management Management o...,
Drum-Buffer-Rope Critical Chain Communications Current Reality Tree
Batch Sizing 9
::l
Throughput Accounting V>
Burrer Management
Product Mix Algorithm
;;j
I I I ::;'
Gr
Net Profit Throughput Throughput Dollar Days
ROI Inventory Inventory Dollar Days
Cash Flow Operating Expense
Introduction 5
Industry groupings
Over 100 items described applications, the majority of which were based in
the manufacturing sector. Most of these focused on the manufacturing oper
ations of each organisation. However, there were several instances of applica
tion to nonmanufacturing, administrative or service functions, as can be seen
in the keyword index. Within the manufacturing sector, there are significant
clusters of applications in the aerospace, apparel, automotive, electronics, fur
niture, semiconductor, steel and heavy engineering industries. The military, in
the US. and Israel, were early adopters of the logistics and scheduling tech
niques ofTOC, and now use the techniques extensively.The US. Air Force has
used the Thinking Processes in its logistics and medical environment.
According to Cox and Spencer [12], it has contributed substantially to devel
opments of TOC in these areas, and in the use of the Thinking Processes in
not-for-profit and medical environments more generally (Roadman et al.
[38]). In education, there are contributions which use TOC in teaching, as
well as others related to teaching TOe. There have also been notable achieve
ments in the applications and development ofTOC methods for use in edu
cation, by Kathy Suerken [45], which do not appear to have been published
widely in the academic literature, but have been applied and received
favourable newspaper press coverage on both sides of the Atlantic.
The great majority of applications reported in the literature were con
ducted in North America. A number of European applications were reported,
with only a few cases emerging from the UK. and Australasia.
Growth in publications
Analysis of the frequency of article and book publications per year shows a
considerable growth of publications in recent years. This is partially due to the
formation of the Constraints Management Special Interest Group within the
influential APICS. Since the beginning of 1998, we saw a dramatic increase in
the number of books published on TOC, with 10 new books hitting the
shelves, including [12], [29], [35]. This takes the total number of books on
TOC to around 40, since the release of The Goal [22] in 1984.
Where have they been published?

Publications have appeared in over 100 journals, and the numbers of articles
per journal is shown on the next page. We were surprised to observe the high
number of journals that featured a solo article on TOe.
No. of Publications
100
80
60
40
20
o
1988 1990 1992 1994 1996 1998 2000
Publications are growing with a big jump in 1998
Distribution of Articles across Journals
70
.!!1 60
III
I:
50
-
"
..,
:::l
0
40
0
" 30
III
.0 20
E
:::l 10
Z
0
2 3 4 5 6 7 8 9 10 21 31+
to to
20 30
Number of Articles on TOe per Journal
60 journals featured a single article on TOC!
This scattering of Toe articles across a wide range of journals may be typ
ical of any new area, but we think it is probably more pronounced in the case
of TOe. If the latter, why is this so? Why do authors pursue publications in
scattered journals, when they must realise that few other advocates of Toe
will see their work? This suggests to us that many of these articles have an el
ement of outreach or technology transfer in them. This would seem entirely
plausible because Toe provides such universal principles that can be applied
anywhere. If the authors have found Toe to be profoundly insightful and
useful, we would hypothesise that they will be more likely to want to share the
good news with colleagues in their own particular discipline. This is endorsed
Introduction 7
by the fact that almost all of these "solo articles" included an introduction to
TOe. Some of them were confined to that: an introduction to TOC for a new
audience. Hence there is much repetition of very basic material.
A fair degree of duplication

As mentioned above, there have been many articles with introductions that
repeat basic information on TOC for a different audience. There has been du
plication elsewhere, for example, in the debates on the comparison of
Activity-Based Costing (ABC) and TOC, and the product mix problem.
In these debates, it would appear that many authors are unaware of other lit
erature in the area, which is something we hope this book will help redress.
Good ideas not taken up by others

We have also discovered some new ideas advocated by authors other than
Goldratt, which appear to have received scant, if any, attention from other au
thors. Examples of these are the Seven Focusing Steps (Coman et al [7], [8]),
Five Layers of Resistance ([14, p340], Houle and Burton-Houle [26]), and
Three Pillars (Kendall, [27]) (the latter example is, admittedly, very recent).
While some of these concepts may be in common use within the Jonah Circle,
(and many indeed trace back to Goldratt), we feel they deserve more attention
from a wider audience. For example, the Five Layers of Resistance or phases of
buy-in are taught as part of the Jonah program and have since been developed
by the AGI into the Six Levels of Knowledge [26], and represent a significant
perspective on the rationale and usage of the Thinking Process Tools.
Kendall's Three Pillars provide a useful checklist of things to consider when
structuring the base of the Current Reality Tree (CRT). Coman and Roneri's
Seven Step method lists establishing goals and measures as two extra steps
prior to embarking on the usual Five Focusing Steps (5FS). They are discussed
briefly by Lisa Scheinkopf, in her recent book [40], where they are described
as two prerequisite steps to the Five Focusing Steps, or indeed to any im
provement effort. The theme of teamwork and gaining buy-in does run
through many TOC works by leading figures, but is not reflected in many of
the applications from the wider TOC community.
Comparisons with other methods

There are many papers comparing TOC with other methods. Perhaps the ear
liest comparisons are with other operations management or scheduling tech
niques. There were several papers (e.g., [1], [4], [9], [49]) reporting computer
simulations comparing TOC with other scheduling methods, typically

Materials Requirements Planning and Just in Time. None showed TOC to be
inferior to other methods, and most showed TOC had a significant advantage
on most common measures, such as Due Date Performance, Lead Time and
Throughput. A large number of mainstream operations management texts
now devote a chapter to TOC (e.g., [6] and [15]).
Another cluster of papers compares TOC with other accounting methods,
particularly Activity-Based Costing. There appears to be a consensus emerg
ing finally ([46] and [36]), though a lot of duplication has occurred, and there
has been a great deal of confusion over the definition of Throughput, as
defined within TOe.
A further area of comparison is with Linear Programming (LP) on the
issue of the Product Mix Problem, following Goldratt's P's and Q's (P-Q)
problem used widely in Goldratt's presentations and featured extensively in
The Haystack Syndrome [18]. Perhaps the most developed example of such
comparison is that by Luebbe and Finch [30], in which the comparison is
starting to give way to a synergistic approach. Such synergies are more fully
developed in Mabin and Gibson [33]. (For a totally different treatment of the
Product Mix Problem, using the Thinking Processes, see Cox and Spencer [12,
Ch 10].) There have also been a few contributions comparing TOC with other
Operations Research (OR) methods, both traditional OR/MS, (Verma [48],
Ronen and Starr, [39]), and soft OR, (Balderstone [3].)
Comparisons with Business Process Reengineering and Total Quality
Management (TQM) are also popular. Goldratt has discussed these in various
places-for example, in [19], he discusses the differences between TQM, Just
in- Time OIT), and TOC; and some of the "Late Night Discussions" contain
discussions of these topics. There is much in common in these approaches,
with the difference perhaps being on the focus for improvement that TOC
places on the constraints or core problems. TOC, TQM, and Business Process
Reengineering all emerged in the early 1980s (in the U.S.). TOC has few, if any,
published failures and appears to be becoming more popular, while TQM and
Business Process Reengineering are perhaps suffering from a reported lack of
success.i TOC can benefit from these other experiences by providing pointers
to the ever-increasing number of users of the methodology. Until recently,
most training in the method has been provided through the Goldratt Institute
and licensed providers, but recent offerings are starting to provide more guid
2 The Ernst & Young and Arthur D. Little surveys, reported in [2], reveal only 1 in 6 organisations gain ben
efit from TQM application.
Introduction 9
ance to the general public (see, for example, the books in the St. Lucie
Press/APICS Series on CM, and papers from the APICS Constraints
Management Symposium Proceedings).
Emergence of multi-methodologies
Perhaps it is not surprising, given the amount of interest in comparing TOC
with other methods, that a plethora of multimethodology applications and
academic hybrids, have emerged. In such cases, TOC is used in combination
with one or more other method(s), with the aim of getting synergies
from using the methods in combination (though in some cases there is a
blurring of the distinction between comparison and synergy). Over 50
entries have a significant multimethodology aspect, providing suggestions
for combining two or more methods. Most manufacturing examples use
elements of traditional operations management techniques, and are not
explicitly classified under this heading in the keywords section unless
significance is given to this aspect. Despite that, there are still over 15
entries that list both "manufacturing" and "multimethodology" as key
words, suggesting that some interesting combinations are being used in that
sector.
The next most common is accounting with TOC. Some 22 articles con
tained discussion on a multimethodology mix of TOC and ABC. It is inter
esting to note that many TOC purists may not approve of such an amalgam.
Dr. Goldratt himself is reputed to have claimed that many multimethodology
mixes are appropriate, but the ones he does not approve of are the TOC and
ABC' combination and the TOC and Balanced Scorecard mix. Interestingly
both ABC and Balanced Scorecard are methodologies developed mainly by
Robert Kaplan.
TOC and quality is also a popular and natural combination, with contri
butions by authors such as Dettmer [13],Atwater and Chakravorty [2], Coman
and Ronen [8] Simatupang, Hurley, and Evans [42], and Stein [43], [44].
There are also a number of combinations ofTOC with OR approaches, in
a synergistic fashion, such as LP ([16], [33]). Several papers deal with the
teaching of TOC/OR, e.g., [5], [31]. Some of the papers use simulation to
compare methods and design multimethodology approaches. There have
been a number of cases where simulation is used with TOC, particularly for
helping people understand the TOC scheduling principles, and for training
purposes, such as [5].
We would expect to see more combinations of systems methods and TOC
in the future. This is because the Thinking Processes have greater relevance
than the earlier TOC material to problem-structuring and problem solving, a

traditional domain of OR and other systems methods.
Another example of a hybrid methodology incorporating three methods
is at Harris Semiconductors, who promoted the use of SFM (i.e., TOC), to
gether with Total Preventative Maintenance and Integrated Yield
Management [29].
The benefits of using TOC

Many claims were made regarding the benefits of TOe. These included: in
creased Throughput (i.e., Revenue-Totally Variable Costs), reduced inven
tories, and reduced lead-times, which in turn would lead to higher sales, and
improvements in profits, quality, and customer satisfaction. We felt it would
be useful to collect together and analyse the actual reported data on the ben
efits of TOC, to verify or disprove these claims. The literature search identi
fied over 100 case studies or vignettes that contained information on the
results of applications of TOe. Not all of these provided quantitative data on
the results of applying TOe. In total, we were able to collect quantitative data
on the application of TOC to 82 different companies. The types of organisa
tions covered by these cases varied from giant multi-national corporations
and industry leaders like Boeing and General Motors, to military organisa
tions like the U.S. Air Force to small town bakeries.
What does the evidence show?

The quantitative data on the results of applying TOC that was reported in the
literature has been collated and analysed [3]. This research exercise is believed
to be the first published examination of the actual performance of the TOe. 3
Table 1 (in the Appendix to this chapter) summarises the data.
We were initially concerned that there were so many apparent gaps in the
data, as it could be argued that these omissions indicate that these factors were
not improved, or that only a few factors in each case improved, perhaps even
to the detriment of other factors. However, on reflection we recognised there
are many valid reasons for such omissions. Firstly, several of the measures
used are essentially measuring the same effect: e.g., Lead-time, CycleTime and
DDP all measure the company's ability to respond speedily to customer or
3To our knowledge, the only other published survey of applications to date is that by Noreen, Smith and
Mackey [36], which reported in depth on 21 organisations that were using TOe.
Introduction 11
ders. Thus one would not expect authors to report all measures. Secondly,
many companies do not wish to report factors such as financial results, for
competitive reasons. Thirdly, many companies adopt Toe with a particular
focus, such as to improve due date performance and may fail to give much at
tention to effects outside this focus.
Furthermore, it is often difficult to collect hard data on the effect of the
change, as people do not always take measurements before they make changes
(we have to confess to being guilty of this). People may not envisage how ef
fective this approach will be-often they have tried other methods before, and
the results have not been noteworthy, so why should this method be any dif
ferent? Sometimes the results are simply too hard to calculate, e.g., to calculate
the inventory figures using Goldratt's definition (see [12], [23] or [36]) is
problematic if the company's accounts are prepared using normal generally
accepted accounting principles (GAAP), an issue one of us had personally ex
perienced with Expozay [32]. Or they may have changed the way they mea
sure inventory as part of the change to TOe, and hence any reported figures
would be misleading. Another reason might simply be that people would pre
fer not to know how bad things really are at the start.
Finally, when taken in context of the articles themselves, it is apparent that
the authors considered Toe to be a success. For all these reasons, the gaps in
the data are not considered to be problematic.
The data available was then analysed using Exploratory Data Analysis
methods.
Sum,mary of the results of applying TOC

The results of the analysis of reported changes in operational and financial
performance, resulting from the application of TOe, are summarised below:
Lead-Times: Mean Reduction 70%

A mean reduction in lead -time of 70% emerged from the sample of 32 obser
vations, all of which reported reductions. Over three-quarters of the sample
experienced reductions in lead-time greater than 50%.
Cycle-Times: Mean Reduction 65%

In every case where changes in cycle-time were reported, the reports showed
a decrease, or improvement in cycle-time. Fourteen observations made up the
sample for change in cycle-times.
Due-Date-Performance: Mean Improvement 44%

Improving DDP is synonymous with meeting delivery promises to customers.
A mean improvement of 44% emerged from the sample. Thirteen observa
tions made up the sample for change in DDP. Several organisations experi
enced improvements of over 100%.
Inventory Levels: Mean Reduction 49%

Reducing inventory is associated with reducing lead-times in a DBR system.
A mean inventory reduction of 49% resulted from the sample of 32 observa
tions.
Lead-Time and Inventory Reduction: Correlation 0.56

Goldratt and Fox [24] claim that when DBR is applied to a manufacturing
system, the reduction in lead-time is strongly correlated with the reduction of
inventory level. This research verifies the claims of Goldratt and Fox, as shown
by a 0.56 Spearman's Rank Correlation. This analysis was conducted on a
sample of 15 observations where organisations provided data on changes to
both lead-times and inventory levels.
RevenuefThroughput: Mean Increase 63% (outlier exclusive)

This variable represents the amount of money coming into the organisation.
All reports represented increases in revenue or throughput. The impressive
mean increase of 63% excludes one outlier, a 600% increase at Lucent
Technologies. Five organisations, from the sample of22, reported increases in
revenues in excess of 100%, within one financial year.
Combined Financial Variable: Mean Increase 76%

A sample of 30 observations for the combined revenue/throughput/profit
variable revealed a mean increase of 76%, excluding the outlier already men
tioned (the 600% increase at Lucent Technologies).
Our conclusions from the analysis of published data

Based on this survey of published applications, TOC appears to work very
well, even with only partial application of the methodology. In the survey of
over 100 cases, no failures or disappointing results were reported. Some sub
stantial improvements in operational variables as well as financial variables
were reported. On average, inventories were reduced by 49%, production
Introduction 13
times (measured by lead-times, cycle times or due date performance) im

proved by over 60%, and financial measures also improved by over 60%.
The vast majority of cases reported only partial applications of TOe. We
are left to wonder whether improvements would have been even greater had
more of the methodology been applied. TOC is a complex and developing
methodology requiring up-to-date information, skill and cooperation to im
plement fully. There is no need to use all the parts at once: even partial use
seems to produce results. There are a number of tools, and they can be used
on their own or in combination-the variety of combinations seems endless.
This may be why there have been few "complete" applications of the method
ology reported in the literature. The most commonly applied components are
the operations management technique, DBR, and the constraint-oriented,
continuous-improvement process, the 5FS. While it is beneficial to use parts
ofTOC in isolation as has been shown by this analysis, many authors suggest
that greater and faster benefits may arise from basing improvement efforts on
a full Thinking Processes analysis.
The technical solution to dramatically improving financial and opera
tional performance is made to sound comparatively simple to identify (espe
cially in hindsightt-i-articles are always written with the benefit of hindsight,
and in our own experience always make things seem more obvious than they
were at the time). The real issue is getting people to buy in to the solution.
Thinking Process applications commonly find that underlying core problems
are erroneous or deficient measurements, policies and/or training.l Often
these are found to be outdated, and no longer consistent with the company's
goal. Changing these is not as easy as changing a production line.
Not surprisingly, our enquiries and experience have identified a great
number of other applications that have not been published: in many instances
the results will never be published, because the focus is on internal change
management for competitive advantage. Thus the number of applications re
ported in this survey is certainly an understatement of the situation.
Recent and emerging trends

We are now seeing the Thinking Processes used very effectively to crack messy,
large, systemic problems, dealing with eng rained behaviours-many of the
more recent contributions demonstrate extensive use of the Thinking
Processes. Many of the APICS Constraints Management Symposium papers
4AsDe Bono says, good solutions are usually obvious in hindsight.

sKendall [19J refers to these as the Three Pillars. Our experience supports this finding.

are on these topics, with core problems often being identified as inappropri
ate policies and/or measurements, while problems surrounding projects also
abound. More discussion is now dedicated to overcoming the human behav
ioral barriers to implementation, e.g., [25], rather than the technical compo
nents of TOC. 6 Typical applications deal with distribution, marketing, and
with change management more generally.
Despite this, TOC is still perceived by many unfamiliar with the approach
as an operations management technique instead of a much broader systems
management philosophy. The methodology has certainly developed signifi
cantly, but this is slow to be reflected in the literature. Early on, people saw
TOC as an operations management technique. Goldratt and Cox's book, The
Goal, was frequently seen as providing a recipe, which could be put into ac
tion and people often did get instant results. Then they realised that TOC
challenged some basic assumptions, like cost accounting measures, and it rep
resented a paradigm shift. Efforts were stymied! Then Goldratt? and his teams
of advisors'' developed the Thinking Processes to address the psychological
aspects that often impaired people's effort to move towards their goal-and
in doing so provided a process to enable people to invent their own solutions!
The applications in the published literature are only just starting to reflect
this expansion of TOC to include the Thinking Processes, with many of the
recent articles still describing TOC as a five step process or a scheduling ap
proach. The lengthy journal publication process is undoubtedly a contributor
to this lag, and we look forward to more applications articles representing
TOC in its fuller sense.
Project management applications articles are starting to emerge, using
Critical Chain (CC)-Goldratt's new method for project management (de
scribed in [21], [28] and [35])-especially for the management of
information technology/information systems/software development (see
for example [35]). The CC method was a key factor in the setting of a new
world record for building a house, in Auckland, New Zealand, in March
1999-this has been featured in newspaper articles and television reports in
cluding a CNN documentary. Goldratt has a book due to be released shortly,
6This is often stated as being the reason for failure of ORiMS projects: either that, or the problem was in
correctly defined in the first place. The TPs help in problem identification (Current Reality Tree) as well as
in implementing the solution through use of Transition Trees,and Prerequisite Trees. These are specifically
designed to help overcome the psychological barriers that impair implementation of solutions.
7In [12], Goldratt describes how in the Thinking Processes, he has sought to address the question of how
to use the psychological aspects to assist, rather than impair, the implementation of those solutions in a
mode of an ongoing process.
8LisaScheinkopf [39J describes these teams, and the processes used to develop the Thinking Processes.
Introduction 15
and developments include the application of CC in multiproject environ

ments. We would expect to see many more articles in this area in the future.
One debate which has not emerged which we would expect to see, is
the relevance of teams to TOe. While Goldratt does not emphasise teams
as such, as does, say, Senge [41], his methods are very powerful for teams. In
particular, the logic rules (the Categories of Legitimate Reservation) provide
protocols for groups, as well as guidelines for any users to encourage rigour in
their analysis.
There has been an increase in the number of scheduling packages based on
finite capacity scheduling, which reflects a wider acceptance of the constraint
management philosophy for scheduling operations.
Our recommendations for usage

The lozenge-shaped diagram on the next page presents the components of
TOC in a slightly different arrangement, representing our view on how the
various parts of TOC should be used. This is based on our own experience,
and on the publications we have reviewed. We recommend that you use the
CM techniques on the left of the diagram if appropriate. For example, if you
know the constraint, and if the goals are clear, then use the 5FS-there's no
need to do a Thinking Processes analysis first! (For an amusing illustration of
this point, see Covington, [10]). On the other hand, if you face a complex
mess, with unclear goals, and multiple stakeholders, then the Thinking
Processes on the right are more appropriate. We'd suggest that users unfamil
iar with the methods start small, use the obvious tool, and if it doesn't work,
don't discard TOC, but try another tool or application within TOe.
While the methods on the right are more powerful and appropriate for
dealing with complex situations, most of the Thinking Process tools can also
be used on their own in more specific situations, and are taught separately by
the Goldratt Institute in their Managerial SkillsWorkshops (recently renamed
Thinking and Communication Tools, TACT). For example the Evaporating
Cloud is an ideal tool to use when faced with a conflict or dilemma; the
Prerequisite Tree can help you to figure out how to achieve an ambitious tar
get; the Negative Branch is a tool to turn half-baked ideas into useable sug
gestions; and the Transition Tree is ideal for producing effective teamwork.
Applying TOC to itself

TOC is itself the subject of ongoing improvement, though it still suffers
from inertia from some quarters. The field is being led by practitioners and
consultants in collaboration with those at the Goldratt Institute, with new
....
0"
The Theory of Constraints

Operations Management Operations Research
.../""Y/f
""""," .,/ Decision Sciences
,.:/
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rtl
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Q.
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Problem Structuring

~ Methodologies
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Use when: Use when:

Known Goals Messy multi-criteria problem situations
Goal Congruent Measures Uncertain goals
Easily Identifiable Constraint Unknown constraint
(Tools provide simple solutions MUlti-perspectives I Mulll-subJectMty
to clearly defined problems.) Many seemingly unrelated symptoms
Introduction 17
developments being shared at fora such as the APICS Constraints

Management Symposium, and the Goldratt Institute's Jonah Upgrade
Workshops. Meanwhile, academics are providing a valuable role in synthesis
ing and rationalising TOC and developing synergies with other methods that
those working intimately with the TOC may fail to appreciate. We hope that
academics in particular are up with the current thinking, and not perpetrat
ing old myths-such as the wrong definitions of Throughput. We hope peo
ple (will) realise that there's more to TOC than The Goal, and that TOC is not
just an operations management technique! We hope that this bibliography
may help make everyone aware of the interest and expertise in TOC around
the world, and we look forward to closer working relationships, and a greater
sharing of new developments in this powerful methodology.
Where else to look for information

We plan to update the bibliography and look forward to receiving copies or
details of new articles, books, and conference papers to enable us to do this
quickly and easily. New developments will occur in the meantime, and the
journals which have already published articles on TOC are listed in the
Sources Index, and these will provide an indication of places to look for new
information. The Avraham Y. Goldratt Institute, APICS, and various consult
ing organisations provide information through their websites, newsletters,
training programs, and so on. There are also e-mail newsletters such as Uncle
Patrick's weekly report, unclptrk@aol.com, and discussion groups, such as the
CM Special Interest Group (SIG) e-mail service, run by APICS. The CM SIG
at this time has some 1,450 members registered. These people are happy to re
ceive up to 15-20 e-mail contributions per day from other SIG members. The
popularity of this resource is indicative of the growing interest in TOe. There
will be many other people in business and academia who are aware of TOC,
and are interested in gaining a greater understanding of this approach. It
is hoped that this book will aid the dissemination of knowledge and TOC,
providing a valuable and easy-to-use resource for those wanting to increase
their knowledge of what is an increasingly popular and powerful manage
ment philosophy.
Obtaining Copies of the Papers or Books

We hope that this publication will have whetted your appetite for further in
formation about TOe. To aid your attempts in gaining copies of full-text ar
ticles we suggest the following approaches:
1. Make friends with your local librarian. They tend to be very resource
ful people, and at least will be able to provide you with advice. Many
libraries also have an interloan system, which can be used to obtain
material, usually for a small fee.
2. Contact the publishers of the particular journal that contains the arti
cle(s) you are interested in. To obtain books we suggest Amazon.com,
and other on-line book stores.
3. Surf the Internet and look up the following databases. Please note,
there is often a cost associated with obtaining full text articles from
these databases.
Anbar Management Intelligence

http://www.mcb.co.uk/anbar.htm
Emerald
http://www.emerald-library.com/EMR/
Carl Uncover
http://www.charweb.org/education/carl.htm
IBSS/BIDS and Ingents Journals

http://www.isi.bids.ac.uk.html
OCLC First Search

http://meduse.prod.oclc.ocr.3050/html
Pro quest Direct

http://proquest.wni.com/podweb
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Introduction 21
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TABLE OF TOC APPLICATION DATA N
N
No. Source Year Author(s) Organisation Cycle lead- Due Inventory Profitability Revenue or
lime lime Date Size Throughput
01 Management 1988 Koziol, David ValmontALS -1-50% 195% -1-40% 1132%
Accounting
May: P44-49
02 Production and 1991 Reimer, Glenn ValmontALS 120% 1600%
Inventory (over 4 yrs)
Management
4th Qtr; P48-52 ;i
(1)
03 Industry Week 1991 Verespej, Michael United Electric -1-87% -1-75%
April: P16-22 Controls ~
~
04 Success Jan: 1994 Zrnirak, John HS Automotive 158% 1 0
P91-93 0.....,
n
05 " " JOFCO Inc. -1-77% -1-70% so
(1)
n n n
06 Premark Food -1-85%
;i
Equipment (1)
0
07 National 1994 Spencer, Stanley -1-60% 115% ~
Productivity Michael and Furniture 0.....,
Review Walthen, Samuel
July: P379-385
bl::>
08 Manufacturing 1994 Libby, Bill Cochrane -1-64% -1-78% -1-38% '"
iJ
Systems Furniture 3"
April: P52-55 Vi
09 Industrial 1994 Gardiner, Proctor and -1-$600

Management Stanley & Gamble million
May: P13-16 Blackstone, John
& Gardiner,
Lorraine
n n
10 " Ford Motor -1-$100
Company million
Electronics
Division
No. Source Year Author(s) Organisation Cycle Lead- Due Inventory Profitability Revenue or
n n
II " Kent Moore i66%
Cabinets
12 New 1994 Mabin, Victoria Expozay ,], r ,],86% i80%
Directions in & Gilbertson, International
Management Deb
P.193-213
13 www.rogo.co 1994 Smith, Jeffrey, MKElectric ,],80% i166% r
rn/cac/Il Smith!
14 APICS 1995 Murphy, Robert Harris ,],50% ,],40% i28% (T) ~
0
Constraint and Levinson, Semiconductor ii)
Management William a
.....,
Symposium 0
Proceedings (j
):.
15 Manufacturing 1996 Murphy, Robert Harris
Systems Semiconductor ~
C).
November: til
~.
P.41-46 a
:::J
16 TOCand its 1995 Noreen, Eric and Baxter ,],90% ,],90% r ,], tJ
til
Implications for Smith, Debra and Corporation @'
Management Mackey, James
Accounting
n n ,],
17 " Company ] ,],83% ,],88% r i(T)
n n
18 " Samsonite ,],66% ,],66%
EuropeNV
19 APICS 1995 Adelman, Philip Hannah's Donut i 47.4% i 61.6%
Constraint Shop
Management
Symposium
Proceedings: N
W
P.26-28
No. Source Year Author(s) Organisation Cycle Lead- Due Inventory Profitability Revenue or t-.J
,J:o.
Time Time Date Size Throughput
n
20 1995 Overall, Karl and Avery t 1 1
P.97-106 Papp.Ken Dennison
Corporation
21 " 1996 Angst, David and Johnson 1100% (T)
P.143-146 Mckinney, Bryan Controls
and Klien, Carl
22 Engineering 1996 Gadbios, Flow t50% ;!
(1)
and Michael International

Management

~
Press ::t.
Q.
March, P. 40-43 0
-..,
23 Production and 1996 Betz, Herbert Lucent 1 1600% S-
(1)
Inventory Technologies (now (in 1 year)
Management 100%) ;!
(1)
1st Qtr P. 77-81 0
~
24 Management 1996 Dugdale, David Automek 1 t30% 1 0
-..,
Accounting and Jones, (pseudonym)
April, P24-29 Colwyn 6l:J
25 Technology 1996 Peach, Bryce Courtaulds t t 1100%+ (T) '"
~
for Coatings 3'
Gi'
Manufacturing
No.2;

P.383-396

26 Operations 1995 Finch, Byron and Monster Cable t90%

Management Luebbe, Richard Products
Competing in a
Changing
Environment
27 " " " Follett Corp. t70% 1 t70%
n n n
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Bibliographies and Abstracts

001
Acord, Terry. "The Principles of Success-Material Flow." Furniture Design
& Manufacturing Vol. 68, No. 12 (1996): 60-66.
Keywords: Bottlenecks, Manufacturing, Scheduling
The method of achieving optimal material flow in Synchronous
Manufacturing is called the DBR concept. This method determines the rate
at which the bottlenecks are consuming parts; establishes a needed level of
safety stock to protect the bottlenecks-the buffer; and ties the purchasing
and release of materials to the bottlenecks-the rope. The authors propose
that companies that do not have a complex operation or are not large enough
to consider purchasing such a system might consider Purchasing by
Exception, which uses the same basic concepts as DBR in a simplified form.
002
Adelman, Philip, J. ''Applying Theory of Constraints in a Service
Environment: Hannah's Donut Shop (A Case Study of Performance,
Measurement and Manufacturing Design)!' APICS Constraints
Management Symposium and Technical Exhibit: Proceedings, Phoenix, AZ.
(April 26-28, 1995): 1-12.
Keywords: Accounting, Application, Measurement Systems
The organisation at the centre of this case study was chosen because of its sim
plicity, and conformance to the input-process-output model. This approach
allows readers to easily understand the application of the methodology. The
background of the organisation is presented in some detail, highlighting
the nature of the business and the problems that management faced prior
to implementation of TOe. The operational changes that resulted from the
application of TOC are detailed. These include a new measurement system

and altered strategy. The author provides a comprehensive description of the
application ofthe 5FS and DBR scheduling. Quantitative results of the appli
cation are presented, clearly displaying the success achieved.
003
Albert, Mark. "From Cost Centre to Profit Centre;' Modern Machine Shop
Vol. 66, No. 10 (1994): 86-96.
Keywords: Application, Aviation, Manufacturing
Pratt and Whitney, a maker of turbine cases for jet engines, boosted its effi
ciency by effecting a cultural change and minimising its work-in-process in
ventory. These were evident during a 1993 tour of its machine shops in
Middletown, CT., by Northwest Airlines Inc. by consultants Tom Montijo and
Dennis Anderson. P & W convinced the two to implement Synchronous
Manufacturing principles at Northwest's engine shops in Atlanta, GA. Such a
strategy proved successful as the company's outside work rose from zero to 27
engines for the period from the start of the implementation to the end of
1993.
004
Aldred, Katherine. "Scheduling Software Fits the Mould for
Manufacturers." lIE Solutions, Vol. 30, No.7 (1998): 50-51.
Keywords: Application, Scheduling Software
Toyo Tanso USA is a fully integrated manufacturer of isostatically moulded
products, specialising in graphitisation, precision machining, ultra-high pu
rification, and CVD SiC coating. Toyo Tanso decided to implement a new
manufacturing scheduling system using the TOC and DBR approaches. Toyo
Tanso purchased ThruPut Technologies' Resonance scheduling and execution
software. Resonance releases orders based upon customer demand, typically
about 20 orders a day. Machinists work on jobs based upon a set demand-dri
ven schedule. Product flow is smoother and faster. The company's on-time de
livery is approaching 90% for all customers.
005

Anderson, Duncan M. "Vision and Revolution;' Success (November 1994):

64-65.

Keywords: Book Review, It's Not Luck, Thinking Processes

This book review introduces Goldratt's new novel, It's Not Luck. The review
has a positive slant with this new work described as "good news." The basic
principles of the TOC management philosophy are detailed including com
Bibliographies and Abstracts 33
ment about the Thinking Processes. The plot of It's Not Luck is discussed
along with some remarks about the pitfalls of conventional cost accounting.
The review also details some Goldratt wisdom relating to the marketing
strategies of organisations.
006

Anderson, Duncan M. "Thinking Revolutionary?' Success (January/

February 1995): 8.

Keywords: Goldratt Interview, Thinking Processes

This article contains an interview with Goldratt and an introduction to TOe.
Anderson comments on Goldratt's background in science and the relevance
of the scientific method to problem solving. Goldratt's work as a consultant
to industry is described, detailing how he analyses the company's progress in
light of their present situation via cause and effect. Discussion addresses the
use of the Thinking Processes as a communicating tool, and the need for ap
propriate measurements. The benefits of applying the tools of the Thinking
Processes are mentioned.
007

Anderson, Duncan M. "The Amazing Goldratt Blazes Paths To Profit?'

Success, Vol. 42, No.1 (1995): 40-46.

Keywords: Application, Evolution

Physicist Goldratt has won a large audience by applying ideas from science to
the world of business. The TOC has shortened the product cycle at many
companies from six weeks to two days. His Thinking Processes are applicable
to politics and family matters as well as to business. Goldratt's clients include
General Motors and the u.s. Transportation Command. Details of the Zycon
Corp. and Bethlehem Steel applications are presented as evidence of the ef
fectiveness of the techniques and Goldratt as a consultant.
008
Andrews, C. & S. W. Becker. ''Alkco Lighting and its Journey to Goldratt's
Goal." Total Quality Management Vol. 3, No.1 (1992): 71-95.
Keywords: Application, Buffer Management, Manufacturing, Quality
A case history that details how one company implemented Goldratt's con
cepts ofDBR together with some ideas about working with vendors to achieve
a just-in-time inventory policy. The difficulties encountered in the imple
mentation are described together with the end results of such a program: in
creased sales volume, profits and returns on assets. It is noteworthy that these
results were achieved without the extensive culture changes and training at
the lowest levels of the organisation usually associated with total quality man
agement programs. It is concluded that even without the potential benefits
from enlisting the lowest levels of the organisation, Goldratt's concepts are
sufficiently powerful to provide rapid benefits to an organisation. There also
is evidence that such gains may be tenuous, or short term, without all em
ployees' longer-term commitment usually engendered by training and engag
ing them in problem-solving and continuous improvement programs.
009

Angst, David R., Bryan 1. McKinney and Carl F. Klien. "Johnson Controls'

Experience with the Theory of Constraints" APICS Constraints

Management Symposium and Technical Exhibit: Proceedings (1996):

143-146.
Keywords: Application, Manufacturing, Nonmanufacturing, Thinking
Processes.
TOC was applied to various divisions of Johnson Controls Inc. This organi
sation is a global market leader in automotive seating, facilities management
services and control systems, plastic packaging and automotive batteries. The
article gives details of three separate applications ofTOC, to three different di
visions of the organisation, over a two-year period. The results of the TOC ap
plications are outlined and discussed, with some impressive figures evident.
(One plant experienced a 100% increase in throughput within five months.)
The authors reach the conclusion that TOC implementation has been effec
tive at Johnson Controls for improving both manufacturing and nonmanu
facturing systems. As a consequence, other divisions of the organisation are
learning about TOe.
010
Anonymous. "Getting from Minority-Owned to World Class: Synchronous
Manufacturing at HS Automotive Metal-Forming Company?' Industrial
Engineering Vol. 25, No.5 (1993): 24.
Keywords: Application, Manufacturing
HS Automotive Metal-Forming Company adopted Synchronous Manu
facuring techniques in its main production facility in July 1992 and saw
immediate positive results. By following these techniques the factory now
moves materials through facilities faster and reduced the amount of capital
tied up in work-in-process (WIP) and raw materials and finished product in
ventories. The practices now used by HS Automotive customers, primarily
General Motors, shift the burden of inventory overhead to the automobile
industry suppliers. The customers place a premium on accuracy and flexibil

ity.The new plan creates a new mind-set at the core of manufacturing strategy.
HS Automotive employees were reluctant to make changes but are more coop
erative after seeing positive results. In three months, the company cut total au
tomotive inventories by 13%, overtime by 45% and late deliveries by 58%.
011
Anonymous. "Synchronous in Step with Global Trends: Synchronous
Manufacturing;' Aviation Week & Space Technology Vol. 141, No. 22 (1994):
46.
Aerospace firms are discovering that Synchronous Manufacturing processes,

which emphasise rapid throughput to achieve short production periods, are

well-suited to current market conditions in the aerospace industry. The man
ufacturing methods of Howmet Corporation and Wyman-Gordon Company

are described, along with the results achieved from implementing SM. (We

note that Howmet Corporation is reported to be the organisation upon which

The Goal is based.)

012

Anonymous. "Break Out of the Box;' Design News Vol. 50, No. 10 (1995):

154-155.

Keywords: Interview, Project Management

Goldratt discusses his management methods.
013

Anonymous. "Primes Spur Lower-Tier Firms with 'Carrot-and-Stick';'

Aviation Week & Space Technology Vol. 140, No.7 (1994): 48-49.

Keywords: Aerospace, Manufacturing, Statistical Process Control

Major U.S. aerospace companies are using a carrot-and-stick approach to ob

tain the more demanding performance they need from lower-tier suppliers.
The carrot is long-term, exclusive partnering relationships. The stick for sup
pliers who cannot achieve the higher performance standards, or are reluctant
to make the effort, is the loss of business altogether. Many manufacturers are
providing tools to help vendors adapt to the new realities of the marketplace.
SM is one of those tools. It involves flowing materials through the manufac
turing process as quickly as possible, based on customer orders. It is becom
ing the umbrella under which other tools such as statistical process control are
being deployed. To identify the most capable suppliers, major aerospace con
tractors are employing rating systems and certification programs.
014
Anonymous. "Making Production Predictable:' Manufacturing
Engineering Vol. 121, No.1 (1998): 150-151.
Keywords: Application, Manufacturing, Scheduling
Five years ago, to identify and eliminate bottlenecks, Ralph Carrell, produc
tion planner at Brenco Inc.'s Petersburg, VA plant, began using TOC software
and DBR practices. The DBR system with TOC scheduling software worked
well for Brenco. Inventories dropped, and on-time shipments rose to 95%. SM
with new software called Resonance from ThruPut Technologies, produced a
17% drop in WIP over a nine-month period; Carrell expects another 18%
drop in the next six months.
015
Anonymous. "Putting Your Efforts Where Your Problems Are... " New
Zealand Manufacturer (September 1998): 9.
Keywords: Management Theory, Manufacturing
TOC has surged in popularity as more and more businesses reap the bottom
line benefits of this powerful theory. This article claims that TOC is the "next
generation management theory." TOC focuses on the company's most critical
issues and the implications those issues have on the rest of the process.
016
Antonio, E. J. and P. J. Egbelu. "Design of a Synchronous Manufacturing
System with Just-In-Time Production." Computers & Industrial
Engineering Vol. 21, No. 1/4 (1991): 391-394.
Keywords: Manufacturing, Materials Handling, Multimethodology, Simulation
One of the goals of a manufacturing system is to minimise the cost of pro
duction. A significant source of manufacturing cost is attributable to materi
als handling. The sources of material handling costs include equipment,
labour, WIP, and floor space. One approach to reduce material handling cost
is through the implementation of SM with TIT production. Although the
concept of SM is known, techniques to design and plan such systems were at
that time yet to be formalised. In this paper, a quantitative modelling frame
work for the design and analysis of a SM system with TIT production is pre
sented. The approach is composed of principles and techniques drawn from
scheduling, layout planning, material handling, and computer simulation.
017
Ardahji, Ray B. "In Sync With Synchronous Manufacturing At Form Rite
Corp." Industrial Engineering Vol. 25, No.8 (1993): 63.
Keywords: Application, Multimethodology

Form Rite Corporation, a supplier of automotive tubular products to the "big
three" automakers, is using the best manufacturing concepts techniques avail
able through SM. The disciplines and characteristics of Synchronous
Manufacturing are presented in the article. Form Rite ran a three-day course
for employees where these disciplines are taught through formal class train
ing sessions, team presentation and shop floor exercises. Topics include elim
ination of waste, lead-time reduction, pull systems, workplace organisation,
factory simulation, and TQM. Interest is maintained through various team
work activities and simulation games.
018
Atkinson, Anthony A. "GM's Innovation for Performance." CMA- The
Management Accounting Magazine Vol. 64, No.5 (1990): 10-15.
General Motors (GM) has achieved benefits by developing innovative
Synchronous Manufacturing methods in its Windsor trim plant, which pro
vides approximately 40% of GM's North American door and seat trim re
quirements. The synchronous process of manufacturing responds to
production on demand which has helped the firm to reduce lead time, im
prove quality, and minimise waste. The largest barrier the Windsor plant faced
in adopting SM was obtaining support from management, and much of the
success in using the innovative techniques comes from the willingness of
unionised employees to adopt new techniques and to oversee their own work.
019
Atkinson, Thomas H. and Barbara Paresa. "Synchronous
Remanufacturing." APICS Constraints Management Symposium and
Technical Exhibit: Proceedings (1996): 155-157.
Keywords: Application, Aviation, Remanufacturing
The authors experienced an implementation of synchronous flow at an en
gine repair workshop at United Airline Engine Maintenance, San Francisco,
CA. The plant employs around 2,100 people, and produces 200 engines and
auxiliary power units per year. The article relates particular scheduling prob
lems the workshop faces as a result of their industry and nature of work. The
strategies used to implement synchronous flow are detailed, as are the cultural
changes that occurred. The results of the implementation are outlined and in
clude a sizeable reduction in WIP inventory, a 50% reduction in cycle time,
and increased capacity, while reducing labour levels.
020
Atwater, J. Brian and Satya Chakravorty. "Does Protective Capacity Assist
Managers In Competing Along Time-Based Dimensions?" Production and
Inventory Management Journal Vol. 35, No.3 (1994): 53-59.
Keywords: Buffers, Manufacturing, Simulation
In the 1990s,the primary focus of many businesses shifted from quality-based
to time-based factors. The use of protective capacity (buffers) may help busi
nesses to achieve their time-based goals. Protective capacity has been defined
as a given amount of extra capacity at non-constraints above the systems con
straints capacity, used to protect against statistical fluctuations such as break
downs, late receipts of materials and quality problems. To test the effectiveness
of protective capacity a computer simulation experiment compared the cycle
time performance of a production line that used protective capacity with one
that did not. The SLAM 2 simulation language was used to construct the two
simulation models. The results validate the use of protective capacity as a vi
able means to achieve faster cycle times while operating with lower inventory
levels. Further, it was found that lines with protective capacity require less in
ventory in the system to achieve relatively stable cycle times.
021
Atwater, J. Brian and S. Chakravorty. "Using the Theory of Constraints to
Guide the Implementation of Quality Improvement Projects in
Manufacturing Operations!' International Journal of Production Research
Vol. 33, No.6 (1995): 1761-1784.
Keywords: Multimethodology, Quality
Several studies have shown that more than 70% of all medium- to large-size
companies have some form of quality improvement program in place. Based
on independent studies by Arthur D. Little, Ernst & Young, and others, re
searchers have concluded that only about one fifth of all QI programs achieve
tangible results. One explanation for the disappointing results is that many
quality improvement efforts are not result-oriented. The purpose of this paper
is to demonstrate the value of using TOe for achieving a results-oriented qual
ity improvement program. The basic premise is that improvement efforts
should be selected based on their impact on the constraint to product quality.
022
Atwater, J. Brian & M. Gagne. "The Theory of Constraints Versus
Contribution Margin Analysis for Product Mix Decisions!' Journal of Cost
Management (U.S.) Vol. 11, No.1 (1997): 6-16.
Keywords: Accounting, Marginal Costing, Product Mix

An outline of Goldratt's Toe approach to making product-mix decisions.
The authors compare this approach with the application of contribution mar
gin analysis to the same example. They examine why the two approaches give
different solutions for optimal product mix using sensitivity analysis. The ar
ticle discusses some other practical aspects, including the costs and value of
direct labour. It is concluded that TOe is a superior approach to product mix
decisions in the presence of a single constraining resource.
023

Balakrishnan, Iaydeep, "Using the TOC in teaching LP and Vice Versa:

Advantages and Caveats." Production & Inventory Management Journal

Vol. 40, No.2 (1999): 11-15.

Keywords: Education, Linear Programming, Product Mix

This paper discusses the use of LP in conjunction with TOe, focusing on two
issues:Toe principles may be used to introduce the concept of constrained op
timisation; and textbooks in general and some articles imply that Toe and LP
give the same solutions to problems, which is not a generalisable result. This
paper shows the spreadsheet LP Solver (optimisation tool) may be very useful
in complementing the Toe product-mix algorithm (which is described as a
"bang for the buck" principle). The paper points out that the Toe product-mix
algorithm explained in textbooks and some journals is actually heuristic by na
ture, and provides a good treatment of LP graphical and teaching issues. The
paper is based largely on the early version of the Toe product-mix algorithm;
no mention is made of refinements such as that by Fredendall and Lea (14).
024
Balderstone, Steven J. "Examining the Theory of Constraints: A Source of
Operational and Financial Performance Improvement for Manufacturers."
Master of Management Studies (in Decision Sciences) Thesis, Victoria
University of Wellington, New Zealand, 1999.
Keywords: Application Results Data, Literature Review, Manufacturing,
Multimethodology, Project Management, Thinking Processes
A literature-based research exercise that examines the structure, components,
and results of applications of TOe. A comprehensive investigation collected
empirical evidence of applications of TOe with the purpose of answering the
following question: Is the theory of constraints a source of competitive advan
tage for manufacturing organisations? The research methodology was centred
on a case survey collecting data from case studies and published reports of
applications of TOe. This data was analysed and conclusions drawn about the
influence of Toe on variables considered to be sources of competitive advan
tage, or financial indicators of improved performance. This research concludes
that Toe is a source of competitive advantage for manufacturers as evidenced
by the significant mean improvements to operational variables such as lead
time, cycle-time, DDP, and inventory reduction. Financial variables represent
ing increased income, such as revenue and throughput, showed Toe
applications yielded significant improvements in organisational financial per
formance. The conclusions are supported by moderate samples (data from 78
applications) but limitations are created by the inconsistent nature of report
ing of results. These findings have significant implications for manufacturing
organisations seeking to improve performance in a competitive environment.
025

Barlevy, Rami. "Theory and Practice of Material Constraints:' APICS
Constraints Management Symposium: Proceedings (1998): 68-70.

Keywords: Material Constraints, Multimethodology

Material constraints are prevalent in most complex industries, but despite

this, little discussion has been dedicated to the topic. There is potential to im
prove performance, enhance and clarify communication, and reduce material

operation support costs. Usage of TOe tools can make the operation more

agile, reduce material management cost, and improve schedule performance

significantly. The application of Toe principles, in conjunction with MRP, to

a material constrained operation can help identify real critical shortages,

focus on them, resolve the problems regarding them, and, at the same time,

avoid spending effort on parts that will not yield any results on performance.

026

Baxendale, Sidney J. and Mahesh Gupta. ''Aligning TOC and ABC for

Silkscreen Printing:' Management Accounting (U.S.) Vol. 79, No.1 0 (1998):

39-44.

Keywords: ABC, Accounting, Application, Multimethodology, Product Mix

A multimethodology implementation of TOe and ABe to at-shirt silkscreen
printing organisation is discussed. The use of Goldratt's Toe and the 5Fs was
guided by the information contained in management accounting reports that
were prepared using ABe principles. The unused capacity information for
each activity provided the information necessary for TOe. Additionally, the
use of the capacities of the activities permitted both the isolation of the unused
capacities and the stabilisation of product costs in the face of changing pro
duction quantities. The ABCM-oriented report also permits the reporting of

several measures of performance that are important to TOC-throughput,

operating expense, and profit. The product-mix issue is addressed, and finan
cial reports are presented along with a process flow diagram.

027

Beckett, William and Khiem Dang. "Synchronous Manufacturing: New

Methods, New Mind-Set." Journal ofBusiness Strategy Vol. 13, No.1 (1992):

53-56.

Keywords: Accounting, Application, Aviation Manufacturing

Pratt and Whitney, a Canadian manufacturer of aircraft engines, is being

forced to reduce lead-times as a result of customer pressures and demand.

Demands for faster delivery, more options, and better quality have caused

P&W to re-evaluate its entire manufacturing strategy. In September 1990, the

company began a pilot program to introduce Synchronous Manufacturing

concepts to one of its key operations, Manufacturing Line 4770. One aspect of

the old culture targeted for change was the area of performance measures. Old

measures, such as hours produced and efficiency, must be replaced by mea
sures that are more appropriate for today's world. Set-up procedures were re
vised, and work areas were reorganised. The company achieved considerable

improvements with fixed planned lead times reduced by 38%, inventory re
duced by 25%, and DDP improved by 50%.

028

Betz, Herbert J. "Common Sense Manufacturing: A Method of Production

Control;' Production and Inventory Management Journal (First Quarter,

1996): 77-81.

Keywords: Application, Manufacturing, Multimethodology, Scheduling

This is an application-based article in which the author details implementa
tion of constraint management techniques at Lucent Technologies. The arti
cle outlines the basic concepts of constraint management and the role played
by the constraint in dictating the output of the production process. The au
thor introduces a concept called process yield analysis. This is a means of as
sessing the output of each stage of the operation and is useful as a planning
tool. Betz outlines the implementation strategy at Lucent. A six-step strategy
is proposed to aid implementation. The results of the implementation are de
tailed and include a six fold increase in production output, 100% on-time
shipping of finished goods, reduction of manufacturing costs, all without any
increase in capital investment or personnel.
029
Blackstone, John H., Lorraine R. Gardiner, and S. C. Gardiner. ''AFramework
for the Systemic Control of Organisations." International Journal of
Production Research (U.K.) (March 1997): 597-610.
Keywords: Cybernetics, Manufacturing, Performance Measurement, Multi
methodology, Systemic Thinking
Western management systems are berated for seeking to define factory pro
ductivity (labour or capital) in isolation, and a plea is made for a systemic ap
proach in the style of Deming. It provides a theoretical framework for the
systemic management of organisations, drawing on work by Drucker, Simon's
view of artificial systems, cybernetics (Beer's simple control model), the TOC,
and Covey's win/win or no-deal managerial style. The authors apply the
framework in a manufacturing setting, focusing on the use of buffer manage
ment in DBR for identifying constraints, and systemically aligned perfor
mance measures.
030
Boyd, Lynn H. and James F. Cox, III. ''A Cause-And-Effect Approach to
Analysing Performance Measures." Production and Inventory Management
Journal (Third Quarter 1997): 25-32.
Keywords: Application, Negative Branches, Performance Measures, Thinking
Processes
Performance measures should not be blindly chosen. Almost all measures
have negative consequences if used in the wrong situation. Using Goldratt's
negative branch reservation technique, managers are able to evaluate the pos
itive and negative effects that will result from taking the proposed action.
These effects are then connected through cause and effect relationships and
scrutinised using "if-then" logic. By working through this technique,
the negative branch can be helpful in determining the conditions under
which a measure has positive or negative consequences. Performance
measurement applications are used throughout to illustrate and further
explain key points. A case study giving details of the use of the techniques
at the press-board plant, one of a number of plants of the Wood
Products Corporation, provides a detailed application of negative
branch reservations for performance measures. Aside from Chapter Eight
of It's Not Luck, this article provides a rare examination of the "negative
branch."
031
Bramorski, T., M. Madan, and J. Motwani. "Application of the Theory of
Constraints in Banks;' Bankers Magazine Vol. 180, No.1 (1997): 53-59.
Keywords: Application, Banks, Nonmanufacturing, Service Sector
High economic growth, intensified competition, and increased customer so
phistication have forced the banking industry to reevaluate techniques to im
prove operation efficiency and profitability. Researchers suggest that in
addition to applying incremental approaches, banks should pursue break
throughs in order to improve their processes. TOC can be used to identify
candidate processes for incremental as well as radical transformations. TOC
involves identifying and managing constraints in order to improve organisa
tional performance. Constraints in banks are frequently found to be policies
and procedures rather than capacity or equipment. The authors identify mea
sures of throughput, operating expense, and inventory specifically applicable
to the banking industry. The authors discuss the application ofTOC philoso
phies to the mortgage application division of a u.s. bank. The implementa
tion of TOC is said to have dramatically improved the operational
performance of the division.
032
Brignall, Stan. "A Contingent Rationale for Cost System Design in
Services;' Management Accounting Research Vol. 8, No.3 (1997): 325-346.
Keywords: Accounting Theory, Cost Accounting, Performance Evaluation
The ~se of traditional budgetary control techniques to control all types of
manufacturing and service operations has become controversial. Some writ
ers argue that the "Gordian knot" joining costing and operations should be cut,
and that operational control should be based on more timely, physical mea
sures linked to problem identification and problem-solving. Alternatively,
some are promoting new nostrums such as activity-based costing and
throughput accounting. This paper summarises these differing positions and
proposes two theories to guide cost system design in services within a contin
gency theory framework: life-cycle theory and service-process type theory.
The paper also proposes the integration of cost system design in services with
that of performance measurement systems as part of wider management in
formation systems. Finally, a series of research propositions are articulated
which flow from the foregoing, which may be best tested by further case
studies.
033
Buchwald, Steve. "How Can the Theory of Constraints and Activity-Based
Management Co-Exist to Support Process Engineering?: A Case Study."
APICS (Australasia) 8th Conference Proceedings (1996): 19-21.
Keywords: ABC, Accounting, Multimethodology
The synergies of a combined TOC and ABC approach are addressed.
Buchwald contends that the use of constraint management alone does not
completely benefit the whole system as stated in Goldratt's Theory of
Constraints. Buchwald claims TOC is best applied to shop floor and only
works when constraints are known. Also, the author believes ABC is vulnera
ble as it is often used in a limited fashion, (for the purpose of product cost
ing). The combined application of TOC and ABC to a Fortune 150 company
has produced the analysis known as ''Activity Based Business Diagnostic,"
which uses the best aspects of both techniques.
034
Burgess, Susan H. and Mokshagundam 1. Srikanth. Regaining Control: Get
Me To The Shipping Dock On Time. New Haven, CT. Spectrum, 1989.
Keywords: Book, Manufacturing, Scheduling
Many issues relating to manufacturing are addressed from a TOC or
Synchronous Manufacturing perspective. Counter-productive behaviours
that result from conventional management techniques are identified and ad
dressed. Topics discussed include manufacturing control, the frequent need
for expediting, lead-time reduction, batch sizes, and identifying constraints.
Numerous examples of scheduling problems are presented. The book is ac
companied by a computer diskette that contains further examples.
035

Callahan, Joseph. "GM's Plant Saver:' Automotive Industries (March 1989):

48-50.


The application of SM to a General Motors trim plant at Windsor, Ontario
is discussed. The case study details GM's efforts to alter their manufacturing
culture, toward leaner production. The article details the results achieved
by the Windsor plant: a 50% reduction in inventory (worth U.S. $7 million),
a 29% reduction in the number of suppliers, a U.S. $23 million reduction
in annual costs, and a 94% reduction in processing times for the average
product.
036
Campbell, Robert J. Competitive Cost-Based Pricing Systems For Modern
Manufacturing. Westport, CT. Quorum Books, 1992.
Keywords: ABC, Accounting, Book, Multimethodology
In an era of fierce international competition, manufacturing firms must have
a thorough understanding of their cost structure and how that structure re
lates to pricing and product-mix decisions. Campbell discusses two compet
ing conceptual approaches to designing product cost systems that support
decision making: ABC and TOe. Campbell presents a new approach to cost
system design that combines the strengths of each school of thought, thereby
overcoming the significant limitations of each. The need to price the product
mix in order to exploit constrained resources is advocated by TOC, while the
need to examine resource consumption from activities is advocated by ABe.
Chapters are dedicated to examining the natures of a firm's cost structure, the
development of ABC, short-run cost behaviour, ABC and TOC compared and
contrasted, pricing strategies, and customer profitability analysis.
037
Campbell, Robert J. "Steeling Time With ABC or TOC:' Management
Accounting (U.S.) Vol. 76, No.1 (1995): 31-36.
Keywords: ABC, Accounting, Application, Manufacturing, Steel Industry
Campbell details the application of several TOC principles at a steel manu
facturing plant in Ohio. The main focus is on the development of a way to
analyse and justify manufacturing cycle time improvements. The system con
straint at Southwestern Ohio Steel is identified as a blank cutting process.
Non-value-added time was excessive and targeted for reduction. This time in
cluded set-up times. Set-up time reduction was assessed and cost benefit
analysis was conducted to ascertain the viability of purchasing equipment for
set-up reduction. An ABC approach gave a less favourable result than the TOC
approach, showing that activity-based cost accounting is a poor means of as
sessing cycle-time reduction viability.
038
Campbell, Robert J. "Managing Cycle Time." Management Accounting
(U.S.), Vol. 76, No.7, 1995: 34-36.
Keywords: Manufacturing
The manufacturing cycle time is the period between a product's design and its
delivery to the customer. By shortening the cycle time, manufacturers can
boost their profitability through increased production without added capac
ity and through timely product delivery. However, cycle-time reduction may
only be possible with substantial investment in new technology and a re
structuring of operating procedures, methods and policies, as well as of sup
plier/customer relationships. Any cycle-time reduction proposal should
include a cost-benefit analysis that examines the impact of the program on
throughput, identifies that activities that are time-consuming and those that
can be modified without affecting throughput, estimates the cost of redefin
ing the activities, and assesses the cost savings from shorter cycle time for
given activities.
039

Campbell, Robert J. "Pricing Strategy in the Automotive Glass Industry?'

Management Accounting (U.S.) Vol. 71, No.1 (1989): 26-34.

Keywords: Accounting, Glass and Glassware Industry
In the automotive window glass industry, most cost accounting systems are
geared toward developing product costs for periodic inventory valuation and
financial reporting. Since these systems are unable to tell management the
true cost of making each window size, it is difficult to determine the proper
product mix and the optimum price for individual windows. Overhead costs
often are allocated on the basis of square feet of glass or direct labor hours, but
these are not realistic. The concept of throughput can be a valuable tool be
cause it has two applications: developing a product mix strategy; and deter
mining the feasibility of adjusting individual product prices. Throughput
value measures the net revenue of a product less those costs directly traceable
to and caused by the product and is an important strategic method of deter
mining product profitability. By determining product profitability, it is possi
ble to coordinate what the firm is capable of selling with what it can produce.
040
Campbell, R., P. Brewer, and T. Mills. "Designing an Information System
Using Activity-Based Costing and the Theory of Constraints." Journal of
Cost Management (U.S.) Vol. 11, No.1 (1997): 16-26.
Keywords: ABC, Accounting, Continuous Improvement, Multimethodology
Comparisons are made between the basic assumptions of ABC and Toe:
arguing that they are not mutually exclusive but that the former is appropri
ate for people-intensive departments and the latter for machine-intensive de
partments. The article describes and illustrates the development of a
customer profitability model by a U.S. manufacturer (Square D) which com
bines ABC and TOC techniques, and discusses its practical use and how it can
help to generate continuous improvement. It is argued that an appreciation
of the merits of both ABC and TOC can improve communications between
production engineering and accounting departments and thus assist cross
functional decision-making.
041
Caspari, John. "Allocation of Investment Cost to Operational Expense: A
TOC Approach." International Society for Systems Improvement
Conference: Proceedings, Detroit, February 1993.
Keywords: Accounting, Investment, Performance Measurement
The main focus of this article is concerned with the role of net profit (NP) as
a measure of ongoing improvement and the role various methods of allocat
ing asset depreciation play in calculating NP. Discussion is dedicated to alter
native methods for analysing investment, and accounting for depreciation.
042
Chakravorty, Satya S. "Robert Bowden Inc.: A Case Study of Cellular
Manufacturing and Drum-Buffer-Rope Implementation" Production and
Inventory Management Journal Vol. 37, No.3 (1996): 15.
Robert Bowden Inc. (RBI) is a manufacturer and supplier of residential and
light commercial building products, with annual sales of u.s. $40 million. RBI
faced potential customer loss, due to long lead-times, and inconsistent due
date-performance. Chakravorty was hired to improve the operations of the
millwork. This was done through successful implementation of constraint
management and DBR. A description of RBI's traditional methods is given
along with a detailed description of the implementation of the TOC ap
proaches. The benefits of the implementation include a substantial decrease
in lead-time, and improvement in due-date-performance of a similar magni
tude. Quality and productivity improved, as did the average number of
monthly orders.
043
Chakravorty, Satya and J. Brian Atwater. "How Theory of Constraints Can
Be Used To Direct Preventative Maintenance;' Industrial Management
(November/December 1994): 10-13.
Keywords: Manufacturing, Preventative Maintenance, Scheduling
The value of using TOC principles for guiding preventative maintenance
(PM) programmes is demonstrated and compared to the more conventional
Pareto analysis approach. The article gives an excellent introduction to TOC

outlining the fivefocusing steps and discussing the relationship between a sys
tem's constraint and the system's output. Implementation of the five focusing
steps is related to a preventative maintenance programme. The conventional
Pareto approach is shown to be simply wrong. For example where the con
straint does not have the worst down-time the Pareto PM approach merely in
creases the useable capacity of a nonconstraint resource, thereby not
increasing system throughput. Constraint-focused preventative maintenance
avoids this problem.
044
Chakravorty, Satya and J. Brian Atwater. ''A Comparative Study of Line
Design Approaches for Serial Production Systems?' International Journal
of Operations and Production Management Vol. 16, No.6 (1996): 91-107.
Keywords: Manufacturing, Scheduling Comparison, Simulation Model
Over the past decade two approaches, Just-in-Time OIT) and TOC, for de
signing and operating production lines have developed, each claiming to be the
"correct" way. In addition there are still those who maintain that line balanc
ing (whenever possible) is the optimal method. This study uses simulation to
compare each of these approaches for designing and operating production
lines under various levels of processing time variability, station downtime,
and total system inventory. Not surprisingly, the ]IT approach appears to
work best when system variability is low. The TOC approach works best when
variability is high. This shows that lines designed using TOC principles per
form significantly better than ]IT lines when inventory is low, and ]IT lines
perform significantly better than TOC lines as inventory is added to the sys
tem. The traditionally balanced line did not perform best under any of the
conditions used in this study.
045
Chakravorty, Satya S. and J. Brian Atwater. "Implementing Quality
Improvement Programs Using the Focusing Steps of the Theory of
Constraints:' International Journal of Technology Management Vol. 16, No.
4-6 (1998): 544-555.
Keywords: Application, Quality
Having made considerable progress in quality improvement (QI) programs,
Japan has now moved into other phases of competition such as rapid design
changes and lower prices. The US, however, is faltering with QI programs.
Several studies reveal that only about 20% of the QI programs implemented
in the u.s. achieve significant results in terms of quality, or financial im

provements. One reason proposed for this disappointing result is that QI pro
grams are not implemented correctly. The purpose of this paper is to
demonstrate how the use of TOC can assist managers in implementing QI
programs that yield results.
046
Chakravorty, Satya and Joseph Sessum. "Developing Effective Strategies to
Prioritise Set-up Reduction in a Multi-Machine Production System: A
Throughput Approach" International Journal of Operations and
Production Management Vol. 15, No. 10 (1995): 103-111.
Keywords: Manufacturing, Scheduling, Set-up Reduction
Those readers familiar with Chakravorty, S. and B. Atwater (1994), "How
Theory of Constraints Can Be Used To Direct Preventative Maintenance,"
(Industrial Management: 10-13) will see a resemblance between that article
and this work on set-up reduction. The main point of both articles is that
Pareto analysis is generally used to prioritize set-up reduction/preventative
maintenance schedules in multimachine manufacturing plants. The authors
propose a TOC approach to set-up reduction. It is stated that an organisation
using a Pareto approach to set-up reduction will eventually get the benefits of
the TOC approach as the constraining resource will at some point become the
next stage to get the attention of management. However, the TOC approach
will give more immediate benefit to the company via increased throughput.
047
Chakravorty, Satya and Penelope R. Verhoeven. "Learning the Theory of
Constraints with a Simulation Game:' Simulation & Gaming Vol. 27, No.2
(1996): 223-237.
Keywords: Education, Scheduling, Simulation
TOC is a means of obtaining systemwide continuous improvement. The con
cept of simulation games as a means of educating users is outlined, along with
a simple and easy to use OPT simulation game. The simulation game is an ac
tive learning tool for students at a variety oflevels within operations manage
ment classes. This game simulates a number of periods of operation and
requires the "students" to make various decisions such as raw materials pur
chase, production scheduling, and labour force levels. Managers and manage
ment students alike can benefit from TOC as a useful framework for
improving operational performance. It is claimed users can benefit from the
use of the simulation game to reinforce the concepts of TOe.
048
Chase, Richard B. and Nicholas J. Aquilano. Production and Operations
Management: Manufacturing Services, (Ch. 19, Synchronous
Manufacturing) edited by Stephanie M. Britt, 752-791. Chicago: Irwin
Publishing, 1995.
Keywords: Accounting, Scheduling, VAT Analysis
A chapter from an operations management text that gives an excellent com
prehensive outline of SM, including some examples and exercises. This is one
of the best examples of Toe discussion in a mainstream operations manage
ment text. Topics include the 5FS, DBR, hockey-stick phenomenon, system
goals, capacity, bottlenecks, capacity constrained resources, VAT analysis,
product mix decisions, control measures for synchronous manufacturing,
comparison to TIT and MRP, and relationships of manufacturing with other
functional areas. Numerous diagrams and charts are used to relate the con
cepts of TOe. The Thinking Processes are excluded from the description.
049
Coate, Charles J. and Karen J. Frey. "Theory of Constraints: It Doesn't Mean
Good-Bye to Variances:' Management Accounting (U.K.) Vol. 76, No. 10
(1998): 31-33.
Keywords: Accounting, Variance Analysis
The authors present and argue the position that the traditional cost account
ing techniques of variance analysis are compatible with TOe. Variance analy
sis, when approached from a Toe perspective, becomes a powerful

management tool co-ordinating cost systems and TOe. TOe is a popular and

intuitively appealing production theory. It originally questioned the useful
ness of product costs, challenged the entire idea of product costing systems,

and later gave rise to Throughput Accounting. More recently, collaborative

views of Toe and product-costing systems have been suggested.

050

Cohen, Oded. "The Drum-Buffer-Rope (DBR) Approach to Logistics." InA.

Rolstadas, ed., Computer-Aided Production Management. New York:

Springer-Verlag, 1988.

(Abstract unavailable)

051

Cohen, Oded. "Management the TOC Way: Managers Who Focus on

Constraints Can Do What Seems Impossible-Increase Quality While

They Are Cutting Costs." Business Performance (January 1998): 54-68.

Keywords: Business Performance Improvement, Introduction, Thinking

Processes
The purpose of this article is to explain some of the tools available to assist
those managers who care for their own people and want to improve the per
formance of their organisation. The goal is to achieve a real competitive edge
by combining strong financial performance with the human factor-the em
ployees' strength and willingness to contribute. TOC offers tools for managers
who really want to improve performance. Cohen provides a clear and simple
example of a conflict cloud and the 5FS.
052
Cohen, Oded and Lepore, Domenico. Deming and the Theory of
Constraints. Great Barrington, MA: North River Press, 1999.
A multimethodology hybrid of the philosophies of Drs. Deming and Goldratt
is introduced. The decalogue is a step by step guide to designing and imple
menting a management system inspired by the teachings of Deming and
TOe. The goal of the decalogue is to provide a conceptual framework and a
set of tools which allows organisations to manage organisations effectively,
foster a continuous improvement attitude in people, develop very focused
business strategies that are long-term and knowledge-based. The steps of the
decalogue stem from a fundamental concept: in order to manage we must be
able to predict the outcome of actions taken on the system/organisation.
Prediction is possible only within a system in a state of statistical control.
Achieving such a state enhances our possibilities of getting maximum perfor
mance from our system. Indeed, the performance of any stable system is lim
ited by a very small number of factors-in most cases only one. We call these
limiting factors "constraints." Managing a stable system effectively passes
through the effective management of its constraints. Moreover, constraints
are not only internal to the system; very often what constrains our perfor
mance is our inability to sell what we are able to produce. Continuous im
provement of our organisation's performance can only be sustained over time
by companywide continuous learning. This learning must result in a consis
tent and synchronised set of actions.
053
Coman, Alex and Boaz Ronen. "Management by Constraints: Coupling IS
to Support Changes in Business Bottlenecks." Human Systems
Management No. 12 (1994): 65-70.
Keywords: Information Systems, Information Technology

Toe is said to offer a comprehensive methodology for harnessing MIS to the
organisation's goals. This article presents a complete top-down application of
Toe from business policy formation, down through a proposed seven-step
version of the 5FS, and the cost/utilisation investment decision-making tech
nique, to the DBR production scheduling methodology. The heart of the Toe
methodology is recognised as consisting of the seven-step effort focusing
cycle.The authors demonstrate how the value chain and value system models
can be mobilised to produce a systematic search for constraint domains.
These constraints are set as the target for the MIS activity. These tools extend
the Toe to examine potential future constraints in addition to current con
straints, suggested exploitation of competitor constraints to establish barriers
for entry into the market and offer a hierarchy of constraints starting from the
cash-flow constraint restricting the contribution of MIS to the organisation's
mISSIOn.
054
Coman, Alex and Boaz Ronen. "Information Technology In Operations
Management: A Theory of Constraints Approach." International Journal of
Keywords: Application, Information Technology, Multimethodology, TQM
Toe principles are applied to information technology and a methodology
that makes information technology (IT) more effective is presented. A four
tiered model for applying Toe to IT is outlined. The paper begins by stating
the need for improvements in information technology application, citing ex
amples of ineffectual applications, quality problems, and costs associated with
correcting quality problems. The TOe methodology augments TQM princi
ples by focusing TQM's across-the-board effort towards the organisational
goal. The 5FS of Toe are extended by the authors to a seven-step constraint
management cycle.A systematic method of constraint identification is intro
duced. Stakeholder Analysis, The Value Chain, and Product Portfolio are three
techniques useful in the identification of system constraints. The authors con
clude by stating that Toe provides a comprehensive methodology for har
nessing IT to the organisation's goals.
055
Coman, Alex and Boaz Ronen. "The Enhanced Make-or-Buy Decision: The
Fallacy of Traditional Cost Accounting and the Theory of Constraints."
Human Systems Management Vol. 14 (1995): 303-308.
Keywords: Accounting, Make-or-Buy, Manufacturing
The make-or-buy decision is addressed, comparing cost accounting and TOC

approaches. The authors describe a situation where a physical constraint
processes several different components. The make-or-buy decision is
therefore concerned with identifying the components which are most
profitable to have processed by the outside contractors. It is stated that
components with a high ratio of contractor mark-up per constraint minute
are the highest priority to manufacture in-house. So "bought" components
should be allocated to fill the constraint. The authors thereby propose an
enhanced make-or-buy TOC analysis using the ratio of "Contractor Markup
per Constraint Time," in place of the standard TOC approach using
"Throughput per Constraint Time." An application of the enhanced TOC
approach is detailed and the results compared to standard cost accounting
and TOC approaches.
056
Coman, Alex, Gideon Koller and Boaz Ronen. "The Application of Focused
Management in the Electronics Industry." Production and Inventory
Management Journal Vol. 37, No.2 (1996): 65-70.
Keywords: Manufacturing, Multimethodology, Scheduling
Focused Management is a multimethodology approach, essentially TOC used
in conjunction with several other management techniques. The article dis
cusses the implementation of Focused Management to an electronics com
pany in Israel. The system constraint was identified, in this instance a policy
constraint. DBR was applied to manufacturing and the bottleneck exploited.
ConsequentlyWIP was reduced, production increased five-fold, and product
quality also improved.
057

Constantinides, Kim and John Shank. "Matching Accounting to Strategy:

One Mill's Experience:' Management Accounting (U.S.) Vol. 75, No. 9

(1994): 32-36.

Keywords: Accounting, Application, Performance Measurement

Champion Paper Mill in Hamilton, OH, is the focus of this article which con
centrates on applying TOC accounting to their manufacturing plant. This
mill had been in operation for nearly 100 years, but in recent times had expe
rienced unacceptably low profit levels. The performance measures used at the
plant were seen to be the cause of poor decision making. It was considered the
accounting system needed to support quality manufacturing (no rework).
The traditional cost accounting standard costing system was abandoned with
a view to manufacturing only what was ordered by the customer. The focus
changed to identifying key critical success indicators (CSI). Throughput re

placed gross margin as the main financial measure. Nonfinancial measures
were included in the new reports in order to focus managers' attention to rel
evant areas. The results of the changes include a reduction of inventories by
almost 50% over three years. Shorter cycle times for orders has improved cus
tomer service.
058

Conway, Richard. "Comments on An Exposition of Multiple Constraint

Scheduling!' Production and Operations Management Vol. 6, No.1 (1997):

23-24.

Keywords: Reply, Scheduling

This is a reply to Simons, Jacob v. Jr. & Wendall P.Simpson 1Il "An Exposition
of Multiple Constraint Scheduling as Implemented in The Goal System
(Formerly Disaster?")", Production and Operations Management Vol. 6,
No.1, 1997: 3-22. Conway states that only some of the original authors' aims
were achieved in the article. Clarifying TOe's status and encouraging interest
were achieved by the article. However, description of the algorithm in the
Goal System and the comparisons were less successful. Conway expresses con
cern about TOe's scheduling of the constraining resource carefully and all
other resources casually, claiming this is a dangerous strategy. He claims the
description of the algorithms are not detailed enough to allow independent
evaluation. Questions are asked about the Goal System position in compari
son to other available systems. The author suggests the research community
needs to start addressing critical issues of scheduling that underlie the current
requirements.
059
Cook, David. ''A Simulation Comparison of Traditional, JIT, and TOC
Manufacturing Systems in a Flow Shop With Bottlenecks!' Production and
Keywords: Comparison, Manufacturing, Simulation Modelling
A comparison of three approaches to production line design which uses a
computer based simulation to model the performance of each approach.
Discussion is devoted to comparing TOC and ]IT. A traditional balanced line
approach to manufacturing is the third methodology in the comparison. The
design of the simulation is detailed as a flow shop with five stages of produc
tion. The performance measures used to assess each approach include: total
system output, flow time, standard deviation of flow time, and average work
in process inventory. Variation is built into the simulation runs and sensitiv
ity analysis was conducted. The results of the simulation were conclusive,

TOC outperforms JIT and the traditional approach on every measurement

criterion. TOC produced more output than JIT, had the lowest flow time, and

the lowest standard deviation of flow time.

060

Cooper, Majorie J. and Terry W. Loe. "Using Theory of Constraints'

Evaporating Cloud to Manage Conflict: A Tool for Sales Force Managers!'

Southwestern Marketing Association March 1998.

Keywords: Application, Thinking Processes

This unpublished paper won the Distinguished Paper Award at the

Southwestern Marketing Association's March 1998 meeting. Cooper and Loe,

of Baylor University, Waco, TX, provide a description of the inherent possi
bility of conflict between sales managers and their sales people. A step-by-step

practical application of Goldratt's Evaporating Cloud technique to the sales

manager/sales person conflict is presented. Each step in the application has

been prepared to help participants move beyond the emotion of conflict in

order to develop win-win solutions for both sides. The focus on needs-not

wants-enables intuition and creativity to emerge, aiding the development of

solutions. The strength of the Evaporating Cloud lies in the surfacing of ideas

and creative solutions, rather than revealing information unknown to each

side.

061

Cooper, Robin. & Slagmulder, Regine. "Integrating Activity-Based Costing

and the Theory of Constraints," Management Accounting (U.S.) Vol. 80, No.

8 (1999): 20-21.

Keywords: Accounting, Activity-Based Costing, Multimethodology

TOC should not be viewed as competing against ABC and instead be treated
as its complementary cost management technique. While TOC is concerned
with optimising throughput and therefore short-term profits, ABC is focused
on finding the right product mix that will lead to the greatest long-term prof
its. Thus, TOC is a tactical cost management technique and ABC is a strategic
oriented method. TOC helps in determining the optimal short-term product
mix that can be manufactured by dividing resources into two categories, the
first incorporating all resources acquired on an as-needed basis and the other
consisting of all resources purchased on an in-case basis. From this categori
sation, one can optimise throughput, which is computed by subtracting the
cost of the as-needed resources from revenues.
062
Cosco, Joseph. "Black & Deckering Black & Decker: Overhauling a u.s.
Power Tool Maker's Manufacturing Capabilities." Journal of Business
Strategy Vol. 15, No.1 (1994): 59-62.
Keywords: Application, Manufacturing, Multimethodology
Black & Decker's experience in rehabilitating its manufacturing capabilities
provides an illuminating case study of how a troubled u.s. company can ap
proach its problems and solve them with the help of new manufacturing tech
nologies. The power tool company began its overhaul by undertaking a review
of all business operations, from product development down to marketing, fo
cusing on the identification of areas which could be streamlined and inte
grated to allow faster and more effective customer service. Thereafter, it
concentrated on its production systems, instituting such innovations as SM,
JIT inventory, and agile production, with the goal of improving its flexibility
and response time. Having decided on its strategy, Black & Decker moved to
upgrade its information management systems so that manufacturing
processes could be moved into the computer age.
063

Coughlan, Pamela and John Darlington. "As Fast as the Slowest Operation:

The Theory of Constraints." Management Accounting (U.K.) Vol. 74, No.6

(1993): 14-17.

Keywords: ABC, Accounting, Capacity, Manufacturing

TOC is introduced, with particular emphasis on dispelling the idea that it is
valid only for short term decision-making. The TOC approach to manage
ment accounting is compared and contrasted to that of ABC accounting. The
drawbacks of ABC are highlighted in terms of a system's performance. The
issue of capacity is considered. A throughput approach is held up as an alter
native to ABC. The concept of efficiency is considered to be very much a "cost
world" measure. The accountant's role is to change the organisation's perfor
mance measures to concentrate on the availability and activation of the key
resources (constraints). The TOC approach of tying the level of activation
of work-centres to the activation of the system bottleneck is discussed. The
article ends with a list of 10 principles that underpin TOC production
management.
064
Covington, John W. "Understanding the Theory of Constraints." Apparel
Industry Magazine Vol. 54, No.6 (1993): 42-46.
Keywords: Introduction
A brief but clarifying look at the basic concepts behind TOe. The author dis
cusses the concept of constraints, and the TOC performance measures T,I, OE

as used by Alex Rogo in The Goal. These concepts are discussed in relation to

the whole organisation, and priorities established for performance improve
ment, in relation to the measures. The reader is introduced to the 5FS, and de
finitions are provided for each step in the continuous improvement process.

065

Covington, John W. "Getting Your Company in Sync." Bobbin (1994):

76-78.

Keywords: Apparel Industry, Synchronous Manufacturing

Many of the basic TOC concepts are described. TOC is suggested as an alter
native to the more conventional approaches to production management.
Bobbin is an apparel industry magazine and this article appears to introduce
TOC to this industry in the u.s. Topics covered include production capacity
calculations, productive capacity, protective capacity (buffers), excess capac
ity, system constraints, batch sizes, and scheduling. MRP is discussed and
criticised.
066
Covington, John W. "Leadership and the Next Generation of Strategic
Planning." APICS Constraints Management Symposium and Technical
Exhibit: Proceedings (1996): 66-68.
Keywords: Implementation, Preparation, Systems Thinking
There is a tendency of TOC implementations to last only a few years.
Covington claims that those organisations which do continue with the
methodology beyond this timespan have a torch bearer who maintains the
momentum. A section of the article is dedicated to an experience the author
had when working with the council of bishops of the United Methodist
Church. The article has a systems/strategy flavour and takes an anecdotal ap
proach in relating the message. The moral of the story, in part, can be found
in the summary. To ensure TOC implementations last, we must do a better job
of preparing the system to take on the new methodology: Prepare the soil so
it is ready to have seeds sown.
067
Covington, John. Tough Fabric. Severna Park, MD.: Chesapeake Consulting
Inc., 1996.
Keywords: Book, Supply Chain Management
Written in a laid-back style, sprinkled with occasional "redneck humour" this
book tells the story of how a chain of companies, from a fibre producer to a
retailer, analysed their system. The book also gives an overview of "flowing
stuff (material) through systems" and gives some helpful tidbits on how to
start a supply chain and some of the pitfalls. The importance of leadership
and taking action is stressed.
068
Covington, John. "A System is a System is a System;' APICS-Constraints
Management Symposium: Proceedings (1998): 29-31.
Keywords: Continuous Improvement, Systems Thinking, Thinking Processes
A System Dynamics view of organisations as complex systems. Systems func
tion in terms of three crucial characteristics: interdependency, variability, and
finite capacity. The chaotic (in chaos-theory terms) nature of organisations is
outlined and an example provides colourful real-life insight of the impact of
the interdependency and variability inherent within complex systems. TOC is
linked to the discussion via the finite capacity of systems, and through the use
of Thinking Process tools to improve the system performance of a church.
069

Cox, James E III. "The Research Agenda for a New Business Philosophy."

APICS The Performance Advantage Vol. 7, No. 12 (1997): http://www.apics.

orgimagazine/dec97/cox.htm

Keywords: Paradigm Shift

A brief description is presented of the author's background and interest in
TOC. The origins ofTOC are discussed, leading into Cox's interpretation and
argument for replacing the old business methods. Cox provides a detailed
look at why these changes must be made, and provides enthusiastic support
for TOC. Systems theory is discussed, justifying a better understanding of the
system's goal, its importance, and appropriate measurement of the goal. A re
search challenge is offered, asking for readers to look into their own areas and
question traditional practices.
070
Cox, James E, III and Archie Lockamy. "A Performance Measurement
Tutorial: An Identification and Examination of Problems with Traditional
Measures;' APICS Constraints Management Symposium and Technical
Exhibit: Proceedings, Phoenix, AZ. (April 26-28, 1995): 13-15.
Keywords: Measurement Systems, Manufacturing
Goldratt's famous quote provides a basis for this article: "Tell me how you
measure me and I'll tell you how I will perform. If you measure me in an il
logical way ... don't complain about illogical behaviour." Thus, the authors

identify the influence of measurement systems on performance. An example

is provided of a typical hypothetical u.s. manufacturing organisation and the

performance measures used at each level of the organisation. The impact of

the measures on customer satisfaction indicators is discussed.

071

Cox, James F. III, W. Gerry Howe, and Lynn H. Boyd. "Transfer Pricing

Effects on Locally Measured Organisations;' Industrial Management Vol.

39, No.2 (1997): 20-29.

Keywords: Accounting, Transfer Pricing

One aspect of management accounting referred to as transfer pricing is ex
amined. Transfer prices are a cost accounting mechanism used within a firm
to account for transfer of assets from one plant or division to another.
Transfer prices can be determined using the market price, product cost, or a
negotiated price for the assets. The single product problem with equilibrium
capacity demonstrates the impact of transfer pricing and local profit and loss
measurements on the using and supplying divisions and the firm. The analy
sis suggests that transfer pricing based on cost accounting and on market pric
ing produce less than desired results. It is found that Toe costs provide the
basis for better decision making.
072
Cox, James F. III and W. Gerry Howe. "Enterprise Implications of Transfer
Pricing;' Production & Inventory Management Journal Vol. 35, No. 2
(1994): 35-39.
Keywords: Accounting
Without proper understanding, local organisations make decisions based on
an arbitrary transfer price that is beneficial to the local organisation when
viewed via local financial measurements. This article shows the detrimental
effects that these local decisions have on the enterprise as a whole and what
can be done to avoid them.
073
Cox, James F. III and Michael S. Spencer. The Constraints Management
Handbook. Boca Raton, FL: St. Lucie Press/APICS Series on Constraints
Management: 1998.
Keywords: Book, Accounting, Scheduling, Thinking Processes, Product Mix, V-A- T
This comprehensive book presents all of the major facets of constraints man
agement (logistics, focusing steps and the thinking processes) and presents
them in an easy-to-understand and logical manner. The case study examples

show where and how to apply these methods. If an organisation or executive
is considering embracing constraints management as part of their approach,
this book along with The Goal, is a must-read and provides excellent coverage.
The chapter on performance measurement provides a new angle on the prod
uct mix problem, revisiting it using the Thinking Processes.
074

Cybart, Barb. "Dunkirk Radiator Taking and Making 'Quantum Leaps.'''

Business First (U.S.) Vol. 11, No.9 (December 1994): 7-8.


This article features New York-based Dunkirk Radiator. The problems faced
by the company regarding the manufacturing schedule and the application of
Toe are discussed. The improvements brought about by the system and a
plan to unveil a world-class product in 1995 are outlined.
075
Danos, Gerard. "Dixie Reengineers Scheduling-and Increases Profit 300
Percent." APICS The Performance Advantage No.3 (1996): 28-31.
Keywords: Application, Manufacturing, Scheduling Software
Gerard Danos is the general manager at Dixie Iron Works in Texas. He relates
an implementation of Toe methodologies to solve operational problems
such as poor due-date performance. The application was successful, signifi
cantly improving several performance indicators. The management then de
cided to install TOe congruent scheduling software called Resonance,
supplied by Thru-Put Technologies. The software produced further perfor
mance improvements. Results of the application include considerable gains in
due-date performance, inventory turnover, and profitability. The ease with
which the workshop was managed also improved.
076
Darlington, John. "Optimising Production Resources." Management
Accounting (U.K.) (April 1995): 57-60.
Keywords: Accounting, Application, Change Management, Manufacturing
John Darlington is a financial controller at Allied Signal Ltd. in the U.K. OPT
production scheduling software was used at his production plant from 1989.
The finance division remained ignorant of the new system and the philoso
phies behind OPT. Narrative text details conversations held between members
of the plant's management. These discussions clearly show the difficulty that
potentially exists when managers with different objectives have to work to
gether to make a decision. The company adopted throughput accounting,
benefiting from the change from conventional cost accounting. The author
does a good job of contrasting throughput and conventional management ac
counting. Production performance was assessed on "adherence to schedule,"
a nonfinancial but quantitative measure which encourages the production
people to stick to the TOC principles. The author notes the experience of chal
lenging "the rules" became quite addictive and it is important for organisa
tions to continually check that the models they use are still valid.
077
Demmy, W. Steven and Barbara Sue Demmy. "Drum-Buffer-Rope

Scheduling and Pictures For The Yearbook." Production and Inventory

Management Journal (Third Quarter 1994): 45-47.

Keywords: Application, Nonmanufacturing, Scheduling

The application of TOC's DBR system in a nonmanufacturing situation is the

focus of this article. The application involves using DBR to schedule school

student photos at a junior high school. The students were described as the

work-in-process inventory and the photographer is the process constraint.

The "drum" (the photographer) set the pace of the release of inventory into

the system via a public address system rather than a "rope." The buffer was as
sembled students waiting before the constraint to ensure the photographer

had students to photograph when the previous group was finished. The re
sults of the implementation of DBR meant the time needed for the task was

reduced considerably, disorganisation was eliminated and general productiv
ity improved.

078

Dernmy, W. Steven and Arthur B. Petrini. "The Theory of Constraints: A

New Weapon for Depot Maintenance." Air Force Journal of Logistics, Vol.

16, No.3 (1992): 6-10.

Keywords: Application, Buffer Management, Military, Scheduling

The concepts of TOC and Synchronous Manufacturing are introduced
through examples within the Air Force Materiel Command. The article out
lines the results from successful implementation of DBR scheduling tech
niques, along with other TOC concepts. The hockey-stick phenomenon is
discussed, and Goldratt's techniques are promoted as a solution to this type of
scheduling problem. T, I, OE measurements are discussed, and the measure
ments are related back to the Air Force depot example. The SFS is presented
in detail, and the issue of policy constraints is addressed. The final section
looks at DBR and buffer size calculations.
079
Dernmy, W. Steven, & Talbott, John. "Improve Internal Reporting with ABC
and TOC' Management Accounting (U.S.) Vol. 80, No.5 (1998): 18-24.
Keywords: Activity Based Costing, Comparative Analysis, Multi Methodology
Integrating ABC and TOC can help companies improve their internal report
ing function. This article explores the implementation of both ABC and TOC
to a hypothetical distillery company. The results show less effort is expended
than a conventional ABC implication. In addition, more information is de
rived than the traditional TOC approach. Users are thus able to more clearly
answer traditional cost-volume-profit queries, evaluate profitable product
lines, and assess the bottom line profitability by product and customer.
080
Dettmer, William H. "Quality and the Theory of Constraints;' Quality
Progress (April 1995): 77-81.
Keywords: Manufacturing, MultiMethodology, Thinking Processes, Quality
Dettmer echoes the thoughts of several other authors who consider that TQM
is not systemically focused. Focusing quality improvement measures on the
system constraint will give a much greater rate of improvement than diffus
ing efforts by attempting to focus on the entire company. TOC is not intended
to replace TQM; rather, TOC integrates and focuses TQM toward the organ
isation's goals. Policy constraints are so much more insidious than physical
constraints because they are less visible and they foreclose on many lines of
inquiry. The Pareto analysis rule receives some attention, and like other au
thors, Dettmer considers this approach to be systemically inappropriate.
081
Dettmer, William H. "Conflict Resolution: The Theory of Constraints
Approach;' APICS Constraints Management Symposium and Technical
Exhibit: Proceedings, Phoenix, AZ. (April 26-28) 1995: 17-34.
Keywords: Conflict Resolution, Thinking Processes
Dettmer examines the nature of conflict and the TOC approach to resolving
conflict. The Conflict Resolution Diagram (or evaporating cloud) is a tool of
the TOC Thinking Processes. The author lists the purpose of the tool, along
with general assumptions about conflict. The Conflict Resolution Diagram is
described in detail and its use outlined in considerable depth. Instances of
multiple conflicts are examined and resolution techniques discussed. The
reader is led through the step-by-step process of constructing a diagram, pro

viding an understanding of the correct use of the tool.
082
Dettmer, William H. Goldratt's Theory of Constraints: A Systems Approach
to Continuous Improvement. Milwaukee, WI: ASQC Press, 1997.
Keywords: Book, Thinking Processes, Continuous Improvement
An updated, expanded, polished, hardcover version of the book the author
first released in 1994. The original publication was initially developed as a
teaching aid, but gained wider popularity. Dettmer's book provides an intro
duction to TOC prior to presenting an in-depth description of each of the
components of the Thinking Processes and how they are to be used. The
Categories of Legitimate Reservation, CRT, Conflict Resolution Diagram,
Future Reality Tree (FRT) Prerequisite Tree, and Transition Tree are all dis
cussed in depth. Other chapters and sections assess Group Dynamics and the
TOC Thinking Processes, conventions for all trees, a glossary of TOC terms,
and exercises for constructing each of the trees. This is an excellent, compre
hensive resource for developing skills in the use of the Thinking Processes and
understanding the concepts of TOC.
083
Dettmer, William H. Breaking the Constraints to World-Class Performance:
A Senior Manager'slExecutive's Guide to Business Improvement Through
Constraint Management. Milwaukee, WI: ASQC Press, 1998.
Keywords: Book, Continuous Improvement, Systems Thinking, Thinking Processes
In his second book, Dettmer explains the basics of constraint theory and how
it is applied to a variety of organisational systems. If you have little exposure
to Goldratt's TOC, this book is for you. It is intended for anyone who wants
to understand how to apply the TOC and use the thinking tools without be
coming lost in the theory and details. Executives and managers seeking an al
ternative or complementary approach to TQM for systematic improvement
of business results can realise impressive results with Breaking the Constraints
to World-Class Performance. Dettmer explains how to identify and optimise
the system constraints that inhibit your organisation's overall performance in
order to become world-class. The process of constraint-breaking is an exercise
in organisational change. This book shows how constraint management is ap
plied using easy-to-follow diagrams and logic trees. It describes the TOC ex
periences of high-profile companies such as Bethlehem Steel, Ford, General
Motors, and Harris Semiconductor. It also explains how the Thinking Processes
might have been used in some high-visibility situations that ended badly for
lack of a comprehensive system analysis tool.
084
Dettmer, William H. "Navigating Change: Organisational Behaviour and
the Thinking Processes." APICS-Constraints Management Symposium
(1998): 35-41.
Keywords: Change Management, Thinking Processes
An excerpt from Chapter 11 of Dettmer's book "Breaking the Constraints to
World-Class Performance." The Thinking Processes are combined with an
understanding of psychology to provide a powerful tool for change agents.
The relationships between human behaviour and organisational change are
discussed. A matrix is developed displaying cross-interaction between the is
sues involved in organisational change. An analysis of resistance to change is
documented in an example.
085
Di Bono, Paul. "Flow Manufacturing Improves Efficiency and Customer
Responsiveness;' IIE Solutions Vol. 29, No.3 (1997): 24-30.
Keywords: Synchronous Manufacturing
Di Bono claims companies are abandoning manufacturing resource planning
in favour of flow manufacturing. This new type of manufacturing employs
JIT policies and techniques to attain greater customer responsiveness, lower
inventory, higher efficiencies and lower operating expenses. The principle be
hind flow manufacturing, which is sometimes referred to as flexible manu
facturing, continuous flow manufacturing and synchronous manufacturing,
is that nothing is produced until customers demand it. Manufacturers that
use this approach are able to adjust mix and volume on an as-needed basis as
well as to match specific customer demands. Those that intend to adopt flow
manufacturing need to radically change processes, make huge investment in
training, and provide effective automation support. The rewards are better
quality, productivity, flexibility, and therefore competitiveness.
086
Donlin, Gina E. "Inventory Doesn't Pay;' Furniture Design & Manufacture
Vol. 64, No.8 (1992): 40-54.
Keywords: Application, Furniture Industry, Manufacturing
With the initial goal of "becoming a customer-oriented company", JOFCO has
implemented SM to drastically improve operating efficiency. Gains included
increased due-date-delivery performance by 90%, decreased work-in-process
and finished goods inventory, achieved while boosting profits substantially.
The article provides a detailed analysis of the changes made, implications of

those changes, and how the organisation overcame barriers to implementa
tion. The results achieved have allowed JOFCO to focus on a made-to-order
approach to manufacturing. This change has led to an enormous growth in
the product range available.
087

Draman, Rexford H. and Vicki Salhus. "Painting a Better Process;'

Industrial Management Vol. 40, No.6 (1998): 4-7.

Keywords: Application, Batch Processing, Manufacturing

The arrival of a new operations manager at a paint plant was a catalyst to im
plementing the production elements of TOe. Production processes at the
paint plant were based on the way things had always been done, and the result
was backlogged orders, high inventory and too much scrap. After the opera
tions manager determined that the shading process was the bottleneck, the
first step was to reduce work-in-process. Among other improvements eventu
ally made at the plant were revised work scheduling methods and improved
quality control. As a result of the Toe application, the plant experienced an
increase in performance that translated into more sales.
088
Duclos, 1. K. and Michael S. Spencer. "The Impact of a Constraint Buffer in
a Flow Shop." International Journal ofProduction Economics Vol. 42, No.2
(1995): 175-185.
Keywords: Manufacturing, Scheduling, Simulation
The findings of a simulation exercise, which incorporated data from a pro

duction company, are presented. The purpose of the simulation was to com
pare MRP and TOC scheduling approaches. The scheduling of work at a
diesel engine factory was modelled using both the MRP and Toe scheduling
approaches. The article includes a general outline of TOe, along with discus
sion about the modelling methodology applied. Discussion is also devoted to
the issues of buffer-size management, and performance measurement cost
systems. The authors conclude that the use of Toe appeared to improve over
all performance through improved utilisation of the bottleneck operation,
and that the DBR approach produced significantly better results than the
MRP methods used at the factory.
089

Dugdale, David and Colwyn Jones. "The Theory of Constraints;'

Accountancy (September 1995): 134.

Keywords: Accounting, Application

A brief history of Goldratt's work and his management philosophy, and the
development of OPT are included along with a summary of the key issues and
measures found in The Goal. An application of TOC accounting principles is
briefly detailed. Throughput accounting was implemented in parallel with the
traditional accounting system of the company. The company operated the tra
ditional system for external reporting and the throughput approach inter
nally. The traditional accounting costs were kept away from production for
fear that they would sabotage throughput thinking. Dugdale and Jones state
the challenge of TOC to accounting calls not only for revisions to accounting
practice, but also for a rethinking of the assumptions on which they are based.
090

Dugdale, David and Colwyn Jones. "Accounting for Throughput: Part 1
The Theory." Management Accounting (U.K.) (April 1996): 24-29.

Keywords: Accounting, Manufacturing, Performance Measures, Quality

The TOC approach to management accounting is examined. The article also

discusses the work of David Waldron and David Galloway, who were heavily

influenced by the work of Goldratt but whose ideas diverged from those of

Goldratt. Dugdale and Jones detail the areas of disagreement and commonal
ity between the proponents of the two new accounting approaches. They dis
cuss the major concepts of TOC Accounting. The authors note that at first

view there is not a great deal new with TOC Accounting. However they em
phasise that Goldratt is arguing for a critical change in managerial thinking.

According to Goldratt, managers must concentrate on increasing throughput,

not on controlling and reducing operational expense. Some discussion is allo
cated to relating TIT and TQM to the concepts of accounting for throughput.

091

Dugdale, David and Colwyn Jones. "Accounting For Throughput: Part II
Practice." Management Accounting (U.K.) (May 1996): 38-42.

Keywords: Accounting, Application, Manufacturing

This is Part Two in a series of works discussing the concept of accounting for

throughput. The article is concerned with the application of the TOC

Accounting approach to a manufacturing organisation. The article is based on

a case study, but the authors do not state the actual name of the organisation

at the centre of the case study. The background of the company in the case

study is given, and the symptoms resulting from the use of their traditional

standard cost system are discussed. The results of applying the new account
ing methodology are related. TOCAccounting supported the marketing man
ager's drive for new business. The move away from gross margin as a concept

was a success. Company performance improved with healthy profits being

achieved, where losses were once the norm. Production levels were higher,

due-date delivery improved, and work in process reduced.

092

Dugdale, David and Colwyn Jones. "Accounting for Throughput:

Techniques for Performance Measurement, Decisions and Control."

Management Accounting (U.K.) Vol. 75, No. 11 (1997): 52-56.


An overview of some recent developments in techniques of accounting for

throughput are presented, focusing on TOe's Throughput Accounting. While

there is no accepted set of techniques that can be described as accounting for

throughput, many practitioners are said to be seeking ways to apply Goldratt's

TOC to their organisations.

093

Eden, Yoram and Boaz Ronen. "The Hourly Rate: Myth and Reality."

Industrial Management Vol. 33, No.5 (1991): 28-30.


The widespread use of the hourly rate measure has no economic base; in the

long run, it will lead to the unjustified rejection of worthwhile orders and to

the unjustified contracting out to subcontractors of work that should be done

in-house. Traditional cost accounting practices allocate indirect costs accord
ing to production volume and not according to production complexity. Too

often, this leads to undercosting in the manufacture of complex products and

overcasting in the manufacture of more standard products. The nature of the

solution depends on the manufacturing constraints and the manager's deci
sion and planning horizon. Three different solutions may be offered that are

suitable for three different situations: the contribution per unit of constraint:

the situation in which there is an excess capacity in the short term: and

activity-based costing.

094

Eden, Yoram and Boaz Ronen. "Service Organisation Costing: A

Synchronised Manufacturing Approach." Industrial Management Vol. 32,

No.5 (1990): 24--26.

Traditional pricing methods, developed in Du Pont Company and General
Motors Corporation plants as early as the 1920s, suited the industrial charac
teristics of the time. Unfortunately, the traditional approach has a number of
serious disadvantages for the allocation of indirect costs in today's environ
ment. These include: indirect costs represent most of the value-added in mod
ern production: the large gap between direct work-hour costs and full-pricing

costs can negatively affect labour relations: decision makers are not sure when

to use data based on full costs and when to rely on variable costs: the as
sumption that all resources are used 100% of the time is invalid. One solution

is the synchronised manufacturing method, also known as OPT, and its suc
cessor, the management by constraints (MBC) method. Developed from the

concept of synchronised manufacturing, the MBC methodology involves

identifying system constraints, deciding how to exploit the constraints, and

subordinating everything else to that decision.

095

Eden, Yoram and Boaz Ronen. "Improving Workflow in the Insurance

Industry: A Focused Management Approach;' Journal of Insurance Issues

Vol. 16, No.1 (1993): 49-62.


096

Edwards, N. "Critical Chain;' Supply Management Vol. 2, No. 17 (1997):

36-37.

Keywords: Book Review, Critical Chain, Project Management

This is one of the first published reviews of Critical Chain. The review gives a

basic outline of the plot. However, no detail is given of the methodology re
lated in the book. The author describes Critical Chain as a who dunnit in the

sense that it deals with identifying and nailing the uncertainties that distort

the project management path and lead to overspending and delays.

097

Elmes, David. "The Thinking Processes Compared to Standard Theories of

Problem Solving: Old Wine in a New Bottle or a New Varietal?"

Unpublished Article, Washington and Lee University, Virginia. 1992.

Keywords: Thinking Processes

An analysis of the Thinking Processes component of TOC from the perspective
of an academic with a foundation in experimental psychology. Elmes com
pares the Thinking Processes to four other models of problem solving. The
author states the Thinking Processes are represented as a scientific approach
to management and decision making that goes beyond mere classification and
correlation of principles, to causality. However, Elmes claims the foundations
of the Thinking Processes do seem just to be based on classification and cor

relation. The article gives an outline of the components of the Thinking
Processes, and includes a reasonably comprehensive description as an appen
dix. The author claims the lack of empirical support for the tools of the
Thinking Processes means the proof of the pudding is in the eating.
098
Elton, J. and J. Roe. "Critical Chain-Goldratt, E.M." Harvard Business
Review Vol. 76, No.2 (1998): 153.
Reviewers Jeffrey Elton and Justin Roe believe the theory works well for pro
ject managers dealing with individual projects. But they argue that senior
managers need to take a broader perspective into account in order to manage
a portfolio of all but the most innovative projects. They question whether
even properly focused managers can easily overcome the many balkanizing
pressures to which projects, in all their uncertainty, often fall prey. To handle
such pressures, companies also need talented leaders-a "constraint" that
many companies will have difficulty overcoming.
099
Fargher, J.S.W."Three Shops, Three Strategies: Using MRP II, ]IT, and TOC
in Remanufacturing Cells." National Productivity Review Vol. 16, No.4
(1997): 77-79+
Keywords: ABC, Aviation, Military, Multimethodology, Remanufacturing,
Simulation
Measurement and quality aspects of remanufacturing are the focus of this ar
ticle. A multimethodology approach was taken at the Cherry Point Naval
Aviation Depot, in North Carolina. MRP II was used in manufacturing cells
which specialised in refurbishing gas turbine engines. MRP II and TIT were
applied to a work cell responsible for the remanufacture of helicopter rotor
blades. The third work cell applied TOC and MRP II to the overhaul of hy
draulic components. ABC was used to measure performance. Simulation
modelling was used to plan the changes. Results of the applications are
presented.
100
Fawcett, Stanley and John Pearson. "Understanding and Applying
Constraint Management in Today's Manufacturing Environments."
Production and Inventory Management Journal (Third Quarter, 1991): 46-55
Keywords: Manufacturing, Buffer Management, Scheduling, Plant Design

A comprehensive description of the manufacturing related elements of TOC

is included in this discussion. The concepts behind TOC are explained and

comparisons are made with TIT manufacturing. The 5FS, the Thinking

Processes, and TOC Accounting are not examined in the discussion.

Specifically, the article is concerned with TOe's benefits for operations man
agement of manufacturing plants. TOC topics discussed include DBR, con
straint identification, synchronised manufacturing, global throughput

optimisation, statistical fluctuation, continual improvement, benefits ofTOC

application, V-A-T production plants, buffer management, and methods of

exploiting constraints.

101

Finch, Byron J. "JIT, TOC, and BPR: An Overview of Productivity

Improvement Resources on the Internee' Production and Inventory


Keywords: Research

Web sites that focus on productivity improvement strategies, such as TIT,

BPR, and TOC, are reviewed. While there is a great selection of quality
oriented sites to choose from, Internet coverage of BPR, ]IT, and TOC is

substantially thinner. There are several general business-oriented sites with

resources related to these topics. These include the Business Open Learning

Archive and A Business Researcher's Interests. ]IT sites include Western

Australia's TIT Page and The Poka-Yoke Page, while Crazy About Constraints

and Constraint Accounting Measurements are two TOC sites. A number

of BPR sites are available, such as What is Business Process Reengineering?,

Phoenix BPR Articles, and Tools for Business Process Reengineering.

(Note: Some of the web sites referenced in this article may no longer be

available. )

102

Finch, Byron J. and James F. Cox. III. "The Strategic Use of Work-In
Progress Inventory." Production and Inventory Management Vol. 30, No.1

(1989): 63-68.

Keywords: Manufacturing, Inventory Control

The authors identify two types ofWIP inventory-"stocked" and "buffer"
and consider how bill-of-materials shape (i.e., the number of stocking points)
and plant type affect their strategic use. The article suggests several questions
to ask in evaluating both "stocked" and "buffer" inventories, e.g., in the case of

buffer, can the layout be revised to decrease scheduling complexities?

103

Finch, Byron J. and James F. Cox III. "Strategic Use of WIP Inventory:

The Impact of Bill-of-Material Shape and Plant Type;' Production and

Inventory Management Journal (First Quarter 1989): 63-67.

Provides general guidelines and questions for evaluating WIP Inventory.

104

Finch, Byron J. and Richard Luebbe. Competing in a Changing

Environment (Chapter Eight, Constraint Management) Fort Worth, TX.

Dryden Publishing, 1995.

Keywords: Continuous Improvement, Manufacturing, Thinking Processes.

This chapter discusses the manufacturing components of TOC, 5FS of con
tinuous improvement, the product-mix problem and briefly examines the
Thinking Processes. The authors present examples of applications ofTOC and
the results achieved by the organisations that applied the methodology. These
organisations include Monster Cable Products Inc., Follet Corporation, Pratt
& Whitney, and Binney & Smith. The chapter includes numerous tables of
data and flow diagrams to demonstrate the concepts.
105
Floyd, Barry and Boaz Ronen. "Where Best to System Invest." Datamation
Vol. 35, No. 22, (1989): 111-114.
Keywords: Continuous Improvement
Constraint Management (CM) focuses on adjusting system constraints to op
timise the performance of an office system. The authors extend the 5FS to
seven steps which focus recursively on the constraints that inhibit performance
improvements: ensure that the goal for each system component is compatible
with the organisation's goal and the goal of the system: measure system per
formance by how throughput, operating expenses, inventory, lead time, and
quality levels synchronise with the goal of the organisation: Identify internal
and external constraints by asking workers, observing, or using analytical tech
niques: exploit the system constraint to improve performance measures with
out changing the production capacity of the current system: centre system
decisions around the main constraining resource: improve system capacity by
hiring personnel or purchasing technological resources to support the con
straining resource: and re-evaluate the system to analyse new constraints.
106

Ford, Roger C. "Statistical Process Control Utilisation in the Austin-San

Antonio Corridor." Computers and Engineering Vol. 29, No.9 (1995):

25-29.

Keywords: Manufacturing, Scheduling, Survey

Ford discusses the focus on quality in manufacturing and details a survey con
ducted among companies in one region of the u.s. Two-hundred eighty-eight
companies were approached and 20% response rate was considered accept
able by the author. The survey sought information from manufacturers re
garding several aspects of their production process, such as the type of
process, batch sizes, statistical process control methods, and production tech
niques used by the organisation. Questions relating to preventative mainte
nance, product quality, causes of variation, bottleneck identification and
nonmanufacturing applications of statistical process control were included.
The general tendency of most companies to have batch sizes larger than one,
it is claimed, shows a need to understand modern techniques of production
and the TOe. Ford considers the minimal use of modern productivity and
quality techniques probably means they are not widely understood or used.
107

Forth, Karl D. "Synchronous Manufacturing Can Help Repair Shops Too."

Aviation Equipment Maintenance Vol. 12, No.9 (1993): 34-36.

Keywords: Application, Aviation, Remanufacturing

Northwest Airlines is working to transform its engine refurbishment shop in

Atlanta, from a corporate expense into a profit centre. The article details the
application of Synchronous Manufacturing to the jet engine refurbishment
plant. The implementation was inspired by successful application of the
methodology at Pratt & Whitney. The flow of engines into the plant was tem
porarily ceased, to unclog the process of excessive WIP inventory. After the ap
plication of Synchronous Manufacturing the turnaround-time for an engine
was reduced by 40%, and a 40% space saving in the plant was also achieved.
Like the United Airlines application case (Atkinson and Paresa), Northwest
uncovered sufficient excess capacity allowing them to take on third-party en
gine refurbishment contracts.
108
Foster, Benjamin P., M. Cathy Sullivan, and Terry J. Ward. "An Empirical
Test of the View of Inventory as a Liability in Explaining Financial
Distress." Journal ofApplied Business Research Vol. 14, No.2 (1998): 83-94.
Keywords: Accounting, Inventory

A study reports a first attempt in a financial distress context to test the extreme
JIT and TOC view that inventory is a liability. The inventory levels and the
change in inventory for healthy and financially distressed manufacturing
firms are compared. The paper also compares the explanatory power oflogis
tic regression models including traditional accounting ratios to that of mod
els including accounting ratios created by viewing inventory as a liability.
Some support is found for the extreme view of some JIT and TOC proponents
that traditional inventory should be considered a liability.
109
Fox, Robert E."Cost Accounting: Asset or Liability?" Journal ofAccounting
and EDP Vol. 1, No.4, (1986): 31-37.
Keywords: Accounting, Manufacturing
Manufacturing cost accounting systems are an invalid measure of perfor
mance. These systems identify inventory profits and losses even though over
head and labour costs are unchanged. Cost accounting systems are designed
to assist management in decision making by linking operating decisions and
financial performance measures. However, cost accounting principles are not
an accurate linking mechanism due to dependent events and statistical fluc
tuations. An important cost accounting application involves the determina
tion of optimal manufacturing capacity-generally excess capacity for some
resources. Examples demonstrate the inconsistency between cost accounting
principles and the corporate goal of making money, such as the "hockey stick
pheno,menon"-fluctuations in shipment volume caused by conflicts be
tween departmental and overall performance measures. Taiichi Ohno, devel
oper of Japan's JIT system, also regards cost accounting principles to be the
biggest obstacle.
110
Fox, Robert E. "The Theory of Constraints: Fad or Future?" The TOC
Center: http://www.tocc.comlfad_orJuture.html. 1998.
Fox poses a series of questions: Is TOC just another three-letter acronym that
promises to be a panacea for every company? Will it become the management
mode of the future, or is it just another passing fancy? He offers his prediction
and shares the thinking behind his speculation. He is optimistic about the
future for TOC, based on his beliefs and experience that Throughput is by
far the longest lever. However, he is also pessimistic because he says that
marketing, product engineering and finance must collaborate with manufac

turing to view their company as a system for generating Throughput. In order
for this to happen, top management needs to lead the organisation in the de
velopment and implementation of a Throughput-based Operating Strategy
(TOS) that is understood and embraced by the entire organisation.
111

Fox, Robert E. "Throughput is Number One." The TOC Center,

http://www.tocc.com/t_is_nol.html. 1998.


Robert Fox, former partner of Goldratt at AGI, provides an introduction to

Toe using the Sears Roebuck and Company story as an example of
Throughput thinking. Several decades ago Sears Roebuck was the unchal
lenged retail king in the U.S. When its long-time chairman, Grant Wood, was
asked what was the secret of its success, his succinct reply was "location, loca
tion, location." He elaborated by explaining that if stores were located along
major traffic routes, that even when the stores were poorly managed, they
were very profitable. When they were located away from major traffic
flows, no matter how well-managed, they were marginally profitable at best.
Not only did he understand this guiding principle, but everyone in the
organisation knew the fastest way to profitability is by generating more
throughput (selling more). This is hardly a new concept. Yet most manufac
turing companies in the Western world are deeply mired in a different para
digm. Their path to profitability today is by saving money through
approaches like downsizing (the real name for re-engineering) and outsourc
ing. While there is certainly more than one avenue to improve an organisa
tion, Fox states his deep-seated belief is that the throughput channel provides
by far the longest lever.
112

Franks, Richard 1. "A Quantitative Model of Toe Sufficiency Trees."

Journal of System Improvement Vol. 2, No.1 (1998): 17-21.

Keywords: Thinking Processes

A simple quantitative model for Toe sufficiency trees is developed to help

give people insight into the use of Toe tools. The purpose of the model is to
make clearer the need for two kinds of feedback in Toe solutions: focusing
on achieving the intermediate objectives when implementing an action in a
transition tree, and putting feedback loops into future reality trees in order to
enhance the truth of entities. The author stresses that the model is for insight
only and in most cases use of the model on trees would be a distraction and
block achievements.
113
Franks, Stephen. "Modelling the Constraints: The Key to Rapid Delivery of
Benefits." APICS-Constraints Management Symposium: Proceedings
(1998): 19-24.
Keywords: Scheduling
A look at the contemporary production planning methodologies of the 1990s,
and why they are not adequate. Guidance is provided to prospective users of
finite capacity control systems, cautioning practitioners who are considering
selecting products and approaches. Vendor and user terminology is used to
relate the concepts of the finite capacity control world. There are many plan
ning tools available which support existing planning ideas, and have been
proven fundamentally flawed. The introduction of APS (Advanced Planning
and Scheduling) will see future development of complete control systems for
the whole organisation. The existing tools (finite capacity scheduler) will
merely be a subset of the complete system.
114
Fredendall, L.D. and B.R. Lea. "Improving the Product Mix Heuristic in the
Theory of Constraints:' International Journal ofProduction Research Vol.
35, No.6 (1997): 1535-1544.
Keywords: Manufacturing, Product Mix
Product-mix decisions need to be made by organisations that produce more
than one product using shared resources. Toe includes a product-mix
heuristic which is an alternative to accounting and linear programming ap
proaches for calculating product mix. The TOe product-mix algorithm de
velops a master production schedule and thus is an important element of
operations management. The authors explain that in certain conditions, such
as multiple resource constraints, the Toe approach does not perform well.
The authors propose a revised Toe algorithm that performs better in situa
tions where the original Toe approach fails. This new algorithm is said to re
main easy to use and understand by managers for the development of a
master production schedule. (However, we note that with multiple resource
constraints, LP provides a genuine alternative.)
115
Freedman, Julian. "Project Overruns No More: New Application for TOC."

Management Accounting (U.S.) Vol. 78, No. 11 (1997): 63-64.


A review of the book Critical Chain by Goldratt.

116

Fritzsch, Ralph B. ''Activity-Based Costing and the Theory of Constraints:

Using Time Horizons to Resolve Two Alternative Concepts of Product

Cost." Journal ofApplied Business Research Vol. 14, No.1 (1997): 83-89.


ABC and the TOC have generated a substantial literature that reflects the im
portance of these topics with practitioners. These two methods appear to rep
resent conflicting viewpoints of product cost. Rather than trying to resolve the

question of "who's right," each method is examined with respect to its implicit

assumptions about time horizons. TOC emerges as a short-run decision tool

while ABC has its primary application in strategic planning and control. The

problems associated with these methods if time horizons change are exam
ined, and suggestions for an integrated approach incorporating elements of

both methods, are presented.

117

Fry, Timothy D. "Controlling Input: The Real Key to Shorter Lead-Times."

The International Journal of Logistics Management Vol. 1, No.1 (1990):

1-12.

Keywords: Manufacturing Lead Times, Scheduling

The importance of Manufacturing Lead Times (MLT) and its interrelation
ship with WIP inventories is the focus of this article. Tremendous advantages
such as increased flexibility, increased responsiveness, decreased WIP inven
tories, improved due-date-performance, and decreased finished-goods inven
tory can be realised with a shorter MLT. Unfortunately, u.s. manufacturers
have not been very successful at efforts to reduce MLT. This is especially true
for those companies using MRP. In MRP, component lead-times are often ex
aggerated to ensure that sufficient time is available for the completion of all
components. With the exaggeration of component lead times comes an in
creased MLT. Also, due to the normally accepted weekly time bucket, a prod
uct with six levels in its bill of materials requires a minimum of six weeks to
manufacture. A second reason U.s. companies have failed to significantly re
duce MLT is the overemphasis on machine utilisation: shop floor foremen try
to maintain a sufficient level of work in front of their department to ensure

that the machines are never starved. As a result of these large queues at each
work centre, a high level ofWIP in the entire plant is maintained. Due to the
relationship between lead-times and WIP which is also discussed, as the level
ofWIP increases, a proportional increase in lead time follows.
118
Fry, Timothy D. and James F. Cox, III. "Manufacturing Performance: Local
Versus Global Measures;' Production & Inventory Management Journal
Vol. 30, No.2 (1989): 52-57.
Fry and Cox look at the various reasons for the failure of productivity pro
grams: they mostly are concerned with direct labour; they emphasise the effi
ciency of factory workers: generally, they ignore other ways in which

manufacturing can compete: and, they hinder process improvements.

Throughput, inventory, and operating expenses can be used to assess the im
pact of lower-level management decisions on global performance. A recent

analysis was conducted of the performance evaluation system of a local man
ufacturing plant. The study revealed that: the plant manager was concerned

mainly with return on investment: product managers were evaluated by due
date performance: and shop floor supervisors and machine operators were

evaluated by standard efficiency measures. The performance measures in the

plant suffered from a lack of consistency. Local performance measures should

not be eliminated, but an analysis should be made of the impact of local mea
sures on more important global measures.

119

Fry, Timothy D., Kirk R. Karan, and Daniel C. Steele. "Implementing Drum
Buffer-Rope to Control Lead-Time;' The International Journal ofLogistics

Management Vol. 2, No. 1 (1991): 12-18.


120
Funk, Paul. "Throughput Planning Instead of Capacity Planning is Next
Logical Step after MRP II." Industrial Engineering (January 1989): 40-44.
The need to do better is the motivation behind many companies looking be
yond MRP II to achieve competitiveness. The importance of the production
process constraint is outlined. Throughput planning is held up as an alterna
tive to MRP II. The author walks the reader through a process of planning the
production schedules. Much of the article considers 70s and 80s manufactur
ing theory such as line balancing and line loading analysis. The last part of this
paper is dedicated to constraint management. The author comments that
throughput planning is the next step in the evolution of planning for, and
control of, resources. Focusing management attention on improving the rate
of conversion of inventory into sales dollars is where real improvements will
be made.
121

Gadbios, Michael. "Shipments Flow Smoothly at Flow International,"

Engineering and Management Press (March 1996): 40-43.


Flow International is a manufacturer of high pressure water jet systems and is

based in Washington. Rapid expansion meant the organisation faced opera
tional problems, such as lead times of up to six months. The company
operated a make-to-stock and assemble-to-order system, in part because
many of the units produced were custom specified to meet clients' needs. The
need to provide a same-day response for spare parts also contributed to the
decision to alter their operating systems. Thru Put Technologies introduced
Flow International to TOC, in order to counter undesirable effects such as ex
cessive lead times, poor delivery performance, and underutilisation of re
sources. The new system allowed the estimate of reasonable due dates at the
time of order entry, enabling Flow International to develop an optimal mate
rial requirements plan. Management recognised that the "local optima" ap
proach was actually causing many of the company's problems.
122
Gardiner, Stanley C. "Measures of Product Attractiveness and the Theory of
Constraints." International Journal of Retail and Distribution
Management Vol. 21, No.7 (1993): 37-40.
Keywords: Product Mix, Retailing
Traditionally an approach called Direct Product Profitability (DPP) is used in
retailing to help with decisions concerning pricing and space allocation. This
article states that DPP is inferior to a TOC approach. The DPP measures are
detailed along with the underlying logic behind these measures. DPP is said
to have labour intensity and complexity as barriers to its use. An alternative
Merchandise Attractiveness Index, based on linear regression, is also men
tioned. TOC is used to develop measures which accurately reflect a product's
contribution to profit. These measures are said to be simple and easily imple
men ted. The article gives a brief introduction to TOC and includes an expla
nation of 5FS. The authors say the use of DPP is an attempt to minimise av
erage cost, but is inappropriate because profit is not maximised at the point of
minimum cost.
123
Gardiner, Stanley C. and John Blackstone. "The Theory of Constraints and
the Make-or-Buy Decision." International Journal of Purchasing and
Materials Management (Summer 1991): 38-43.
Keywords: ABC, Accounting, Make or Buy Decision
TOC and conventional standard cost approaches to the "make-or-buy" deci
sion are compared and contrasted. The authors outline the philosophies be
hind the standard cost system and TOe. Arguments against the use of cost
and ABC accounting approaches to the problem are presented. The contribu
tion per constraint minute approach (CPCM), as advocated in the TOC prod
uct-mix algorithm, is introduced as a means of reaching the make-or-buy
decision. Throughout this discussion the authors emphasise the role of the
constraint in limiting production. The traditional approach, it is said, does
not incorporate revenues directly into the decision process, meaning deci
sions will not consistently result in increased profits.
124
Gardiner, Stanley c., John Blackstone, and Lorraine Gardiner. "Drum
Buffer-Rope and Buffer Management: Impact on Production Management
Study and Practices." International Journal of Operations and Production
Keywords: Manufacturing, Scheduling
Documentation of the major impacts that DBR has on production manage
ment in study and practice are explained. This article gives a thorough de
scription of the DBR system and provides a comparison to the Kanban system
used in JIT. The findings of Lambrecht and Segaert are mentioned, stating
that DBR outperforms a Kanban system on serial production lines. Readers
are introduced to the basic concepts ofTOC, with details of the advantages of
the approach. Topics and issues such as DBR, master production scheduling,
TOC accounting performance measures, decreased material flow complexity,
and the use of incentives to adhere to the production schedule, are addressed.
The authors conclude their work by stating that the TOC-based DBR man
agement approach is radically altering the underpinnings of production man
agement practice, research, and teaching. They make the point that DBR
changes the emphasis away from complex strategies; the simple and easily un
derstood nature of TOC is part of its strength.

125

Gardiner, Stanley, John Blackstone and Lorraine Gardiner. "The Evolution

of The Theory of Constraints;' Industrial Management (May/June 1994):

13-16.

Keywords: Evolution, Quality

This is an excellent article detailing "modern" TOC, including relevant exam
ples of application of the philosophy. The initial focus of the article is the gen
eral dissatisfaction of the results given by applying TQM in many
organisations. It is said TOC provides a means for focusing TQM effort.
Examples of the success of TOC (but not TQM applied within a TOC frame
work) are given to highlight the benefits to organisations which have applied
straight TOC. The reader is taken through a tour of the methodologies of
modern TOC, including detailed explanations of DBR. Throughput
Accounting, the development of the Thinking Processes, the principles be
hind Goldratt's Buffer Management (BM) technique, and the fundamental
flaws of local optima scheduling and efficiency measurement. This article
equally weighs each of these areas of TOC, whereas so many published arti
cles tend to focus just on one aspect of TOC.
126
Garner, Karen M. & Bailey, Rona N. "Using Constraint Management to
Reduce Congestion in a Fracture Clinic: Preliminary Analysis;' DSIR
Physical Sciences Report 58. Wellington, New Zealand: Applied
Mathematics Group, DSIR Physical Sciences, June 1992.
Keywords: Application, Health, Scheduling, Simulation
A constraint management approach is applied to the problem of reducing
congestion in a fracture clinic. Preliminary analysis identified several bottle
necks. The bottleneck which is most constraining in any particular clinic de
pends on the mix and rate of patients arriving at the clinic. Presently, the
appointment system does not take into account the likely services required by
each patient. Also, the appointment system gives patients times within tradi
tional clinic hours even though the number of patients already booked can
not be seen within the clinic time limits. A computer simulation model is
recommended for testing out different ways of scheduling appointments. This
would improve patient flow to the bottlenecks and reduce congestion and pa
tient waiting time, while not increasing doctor idle time. The simulation
model would also indicate what additional resource would be of most value
in relieving congestion in the clinic.
127
Garrison, William P. "Confessions of a Self-Taught TOC Practitioner, Part
II: TOC For Project Management:' APICS-Constraints Management
Symposium: Proceedings (1998): 42.
Keywords: Application, ProjectManagement
Garrison is a self-taught practitioner who applied Goldratt's tools and tech
niques to a construction project, bringing it in early and under budget. The
project involved the construction of a townhouse complex for the homeown
ers association. With the project in substantial trouble after five years of poor
progress, Garrison was able to manage the project to completion two months
ahead of a planned completion time and $250,000 under budget, without a
deterioration of quality of tasks or materials.
128
Gautschi, T. "Theory of Constraints Spots Weak Management:' Design
News (October 1995): 166.
Keywords: General, Descriptive
This brief article gives a general description of TOe. The author mentions
Goldratt's business novels and some of the basic principles.
129
Giauque, William and William Sawaya. "Strategies For Production
Control." Production and Inventory Management Journal Vol. 33, No.3
(1992): 36-39.
The benefits are outlined of hybrid manufacturing control systems, which the
authors believe can often produce the best results for manufacturers. The
background for the article is set by an example of the complexity of modern
manufacturing and the need for zero-defect manufacturing. A case study in
volving the development of a hybrid control system provides the body of the
article. The "before" situation is described, with the problems of excessive lead
times, high inventories and unnecessary handling of inventory, being symp
tomatic of the underlying flaws in the company's existing system. The changes
made were successful and the production manager of the plant estimated that
annual savings of several hundred thousand dollars were achieved.
Responsiveness also vastly improved. These gains were made with virtually no
capital expenditure. In summary, the authors state that no one production
control technique dominates, and strengths and weaknesses of each should be

considered.

130

Glasserman, Paul and Yashan Wang. "Fill-Rate Bottlenecks in Production
Inventory Networks." Manufacturing and Service Operations Management

Vol. 1, No.1 (1999): 62-76.

Keywords: Bottleneck, Inventory, Lead Times

The bottleneck in a production-inventory network is commonly taken to be
the facility that most limits flow through the network and thus the most
highly utilised facility. A further connotation of "bottleneck", however, is
the facility that most constrains systemwide performance or the facility at
which additional resource would have the greatest impact. Adopting this
broader sense of the term, we look for fill-rate bottlenecks: facilities in a pro
duction-inventory network that most constrain systemwide fill rate (the pro
portion of demands filled within a fixed delivery lead time) or facilities at
which either additional production capacity or additional inventory would
have the greatest impact on the fill rate. We consider systems in which various
components are produced through a series of stages holding intermediate in
ventories and are then assembled into finished good to meet external de
mands. With each station in the network we associate precise measures of the
station's propensity to constrain the fill rate. We use this measure to define a
fill-rate bottleneck and justify this label both theoretically and numerically.
Examples show that even the least-utilised facility can be a fill-rate bottleneck.
Unlike utilisation, our bottleneck criteria capture information about process
variability.
131
Godfrey, John R. Synergies Between the Theory of Constraints and Linear
Programming. Thesis, Master of Management (Organisational Systems),
Monash University, Australia, 1997.
Keywords: Linear Programming, Multimethodology, Production Planning
Godfrey's thesis examines the viability and benefits of a multimethodology
approach to production planning in the oil industry. Toe is outlined and dis
cussed as a possible means of improving scheduling in oil refineries. The com
plexity of production planning within the industry is related. The barriers to
the implementation and acceptance of Toe in the oil industry are discussed.
These are said to include: resistance to change: a strong cost accounting men
tality (reinforced by GAAP conventions and requirements): and the probable
existence of floating bottlenecks. Godfrey argues that Toe could well provide
an approach that increases the usefulness of linear programming in the oil

industry.
132
Goldratt, Eliyahu M. The Haystack Syndrome: Sifting Information out of
the Data Ocean. Croton-on-Hudson, NY: The North River Press, 1990.
Keywords: Book, Decision Making, Manufacturing, Performance Measurements
Scheduling
The Haystack Syndrome addresses decision-making strategies, cost account
ing, manufacturing shop floor management, scheduling technologies, and
much more. To deal effectively with Haystack Syndrome solutions, one must
enter into the nature of existing manufacturing systems, data modelling and
integration issues, change management strategies, and more. So there's some
thing of interest in Haystack Syndrome for every viewpoint within a manufac
turing management team-strategic, market, product, "costing," and capacity
considerations for the executive, financial, and marketing leadership; shop
control, scheduling, and improvement strategies for manufacturing manage
ment and supervision; and enough detailed data and systems ramifications to
delight even the most technical of the systems techies.
133

Goldratt, Eliyahu M. Theory of Constraints: What is This Thing Called the

Theory of Constraints and How Should It be Implemented? Croton-on
Hudson, NY: The North River Press, 1990.

Keywords: Book, Continuous Improvement, Performance Measurements,

Thinking Processes

This publication follows Goldratt's earlier works, providing a more formal

representation of the tools and techniques of TOe. As the title suggests, em
phasis is placed on the implementation of TOe. Topics addressed included

the SFSin the Process of Ongoing Improvement, the process of change, effect
cause-effect logic, and inventory management. Goldratt uses the Socratic

method to relate some of the Toe concepts. The example given considers the

appropriateness of measurement systems, and their goal congruence. In par
ticular, Goldratt exposes fundamental flaws in the EOQ batch size logic.

134

Goldratt, Eliyahu M. "Looking Beyond the First Stage: Just-In-Time."

BPICS Control (U.K.) (February and March, 1990): 37-42.

Keywords: Implementation, ]ust-In- Time, Manufacturing


135

Goldratt, Eliyahu M. "Late-Night Discussions I: Is Your Inventory Putting

You a Continent Away?" Industry Week Vol. 240, No. 13 (1991): 24-26.

Keywords: Inventory Control, Manufacturing, Socratic Method

The "Late Night Discussions" are a series of articles relating Goldratt's think
ing on certain topics, delivered in the style oflate night conversations between

Jonah and Alex. The central characters in The Goal address a range of issues

in a relaxed, thoughtful, and insightful manner. The first article in this series

contemplates the reasons why American manufacturers have lead-time prob
lems. The Japanese are remote from the American market by only about one

month, while u.s. manufacturers are more than 80 days away from the u.s.

market.

136

Goldratt, Eliyahu M. "Late-Night Discussions II: Single-Source

Purchasing's Long-Term Effects can be Devastating." Industry Week Vol.

240, No. 15 (1991): 29-31.

Keywords: Purchasing, Socratic Method

137

Goldratt, Eliyahu M. "Late-Night Discussions III: Transfer Pricing:'

Industry Week Vol. 240, No. 17 (1991): 68-70.

Keywords: Accounting, Socratic Method, Transfer Pricing

Fixing transfer prices between units of the same company is difficult. A bal
ance must be made between free trade within the company, and external trade
when the purchase of parts or services is contemplated.
138
Goldratt, Eliyahu M. "Late-Night Discussions IV: Manufacturing
Automation." Industry Week Vol. 240, No. 19 (1991): 55-57.
Keywords: Manufacturing, Socratic Method
Automation systems such as "lightless plants" can appear to fail because of
poor design and poor initial analysis of expected benefits.
139
Goldratt, Eliyahu M. "Late-Night Discussions V: Searching for Japan's Core
Statement: Manufacturing Success of Japanese Business." Industry Week
Vol. 240, No. 21 (1991): 30-32.
Keywords: Accounting, Socratic Method

The cost and quality gap of world products versus Japanese-made goods has
been nearly eradicated. Japanese manufacturing and accounting practice
treats inventory and production costs more positively and creatively than
American firms do.
140

Goldratt, Eliyahu M. "Late-Night Discussions VI: Quality Management."


Keywords: Socratic Method, Quality, Resistance to change

TQM entails the synchronization of a company's resources to satisfy cus

tomers. A company should aim to make money in this way, rather than con
centrating on cutting costs. Includes discussion on resistance to change.
141
Goldratt, Eliyahu M. "Late-Night Discussions VII: Engineering and
Competition." Industry Week Vol. 241 (No. I) 1992: 17-19.
Keywords: Product Design, Socratic Method
Manufacturing companies trying to find the key to competitiveness often em
phasizes production values at the expense of engineering. In order for pro
duction to flow smoothly however, the engineering department must design
its products so that manufacturing specifications are not too rigid.
142

Goldratt, Eliyahu M. "Late-Night Discussions VIII: Paradigm Shift."

Industry Week Vol. 241, No.3 (1992): 63-65.

Keywords: Continuous Improvement, Socratic Method

Managers of production plants must consider the paradigm they use. A model
which considers materials and human resources is presented in this satirical
article.
143
Goldratt, Eliyahu M. "Late-Night Discussions IX: Dealing with a Market
Downturn." Industry Week Vol. 241, No.5 (1992): 43-45.
Keywords: Socratic Method
The best way to handle a market downturn is not to slip into one in the first
place. By working to head offlosses, a company can avoid losing its most valu
able assets, its employees, in economically mandated layoffs.
144

Goldratt, Eliyahu M. "Late-Night Discussions X: Different Markets,

Different Prices." Industry Week Vol. 241, No.7 (1992): 58-60.

Keywords: Marketing, Socratic Method

Market segmentation is the result of a company having products that have

more perceived worth in various industries than the company realises. These
segments exist for most companies and if they are well managed, they result
in profits even in the midst of an overall downturn.
145
Goldratt, Eliyahu M. "Late-Night Discussions XI: Tearing Down the Walls
of Distrust." Industry Week Vol. 241, No.9 (1992): 27-29.
Keywords: Policy Constraints, Socratic Method
A major cause of corporate breakdown is mistrust and miscommunication
between employees and within the layers of the corporate structure. This
results from faulty company policies and measurements that discourage indi
vidual endeavour and intuition.
146

Goldratt, Eliyahu M. "Late-Night Discussions XII: Cost Accounting."


Keywords: Accounting, Socratic Method

A mock conversation between two managers at a hypothetical corporation il

lustrates the limitations of such early 20th century accounting notions as
"product cost" and "product profit" in the modern business environment.
147
Goldratt, Eliyahu M. It's Not Luck. Great Barrington, MA: The North River
Press, 1994.
Keywords: Business Novel, Distribution, Marketing, Thinking Processes
In this sequel to The Goal, Alex Rogo finds himself in a senior management
role within Unico. Alex applies the TOe Thinking Processes to identify
marketing and distribution solutions for organisations which Unico is
threatening to sell off. These organisations must show a substantial improve
ment in performance to prevent the sale and save the jobs of the current
management. The unique nomothetic and idiographic nature of the Thinking
Processes are related as Alex constructs trees and conflict resolution diagrams
(clouds) to structure the problems faced by the organisations. The complex
ity of the Thinking Processes is apparent, as is the skill necessary to work

with its tools. However, Alex is able to overcome the complexity and
identify solutions to ensure the sustainable competitive advantage of the
organisations.
148
Goldratt, Eliyahu M. "Empowerment: Misalignments Between
Responsibility and Authority:' 1996: www.goldratt.com/empower.htm
Keywords: Communication, Empowerment, Thinking Processes
This article by Goldratt appears to have several purposes. Firstly, it raises the
issue of the frequent discrepancy between the responsibility and authority.
The body of the work is dedicated to applying the Thinking Processes to the
misalignment problem: in so doing it shows the power of CRDs (clouds) as a
tool for assessing the validity of company policy. Goldratt has written this ar
ticle mostly in the narrative, detailing his conversation with a friend who ran
a small production plant. Relevant points include acknowledging that "fight
ing the fires," which often takes up much of managers' time, are excellent in
dicators of the misalignment between responsibility and authority. Goldratt
uses the example of a fire his manager friend recently fought as a basis for
analysing misalignments. This example is scrutinised by the use of a cloud di
agram, with the conflict identified.
149
Goldratt, Eliyahu M. "My Saga to Improve Production." APICS-The
Performance Advantage (USA) Vol. 6, No.7 (1996): 32-35.
Keywords: Capacity Requirements Planning, Evolution, Manufacturing
This article presents a first person description of Goldratt's work in develop
ing TOe. Goldratt's article has much greater value than a mere narrated time
line. The reader is given an understanding of the significant human elements
which have, at times, been a restriction on the implementation of TOC
throughout the industrialised world. The article spotlights Goldratt, expo
nent of TOC and finite capacity scheduling as applied to the manufacturing
industry, and author of the production management books The Goal and The
Race. Goldratt recounts the writing of The Goal, its publication, acceptance
and initial slow implementation into U.S. manufacturing business. He
describes how the reaction to The Goal led to the foundation of the Avraham
Y. Goldratt Institute, and the development of educational production
simulation games.
150
Goldratt, Eliyahu M. "My Saga To Improve Production;' APICS-The
Performance Advantage (USA) Vol. 6, No.8 (1996): 34-37.
Keywords: Manufacturing, Training
The second of a two-part series by the author, discussing his book The Goal,
and the development of TOe. The article describes how the message of the
book was put across to interested parties within the u.s. manufacturing sector.
151
Goldratt, Eliyahu M. Critical Chain. Great Barrington, MA: The North
River Press, 1997.
Keywords: Business Novel, Project Management, Thinking Processes
How many projects in your organisation have come in on time and on bud
get? If you're like most senior managers, the answer is likely to be none, no
matter how many data-management systems, team-training programs, pro
ject-management software packages, or best practices you've been using. Are
the project delays and cost overruns inescapable? Critical Chain is the third of
Goldratt's business novels. Alex Rogo is replaced by Rick Silver as the protag
onist. Silver is a lecturer in a MBA project management course who must find
a new way of managing projects in order to attract more students and gain
tenure. The protagonist slowly develops a significant new approach to man
aging projects, based on a understanding of a system's constraint. Topics such
as scheduling, protective buffers, and negotiation are covered in the method
ology. The students in the MBA course provide the test beds for the new meth
ods. They apply the approaches within their own organisations. The new
approach proves to be successful in dramatically improving the performance
of the students' real-world projects.
152

Goldratt, Eliyahu M. ''A TOe Approach to Organisational Empowerment."

APICS-The Performance Advantage (U.S.) (April 1997): 45-48.

Keywords: Empowerment, Responsibility, Thinking Processes

Goldratt presents a view that there is often a misalignment between the au
thority and responsibility given to employees. The article draws on an exam
ple relating to the distribution of finished goods to a customer. This example
illustrates how the application of TOe can highlight structural and proce
dural weaknesses in an organisation's operations, leading from authority re
sponsibility mismatches.
153
Goldratt, Eliyahu M. & Jeff Cox. 1992. The Goal, Second rev. ed. Croton-on
Hudson, NY.: The North River Press
Keywords: Business Novel, Continuous Improvement, Manufacturing,
Scheduling
First published in 1984, The Goal is the seminal popular publication outlining
the basic concepts of TOe. The unique genre of the business novel permits the
use of the Socratic method of relating concepts through fictitious dialogue.
The Goal is one of the most successful business books of all time, with sales top
ping 2-million units and translation into 13 different languages. Alex Raga is a
hapless factory manager who is led along a path to enlightenment by a former
university professor named Jonah. Numerous problems and continual fire
fighting are replaced with calm, via a system-constraint-oriented management
approach. The Goal cannot be underestimated in its value as a vehicle for re
lating the concepts of TOe. The second revised edition of The Goal contains
several additional chapters which add to the scope and value of the novel.
154

Goldratt, Eliyahu M. and Robert E. Fox. The Race. Croton-on-Hudson, NY:

The North River Press, 1986.

Keywords: Book, Manufacturing, Continuous Improvement

Goldratt and Fox state The Race is about our standard of living, and how we
can increase it. The race is a graphics based book with accompanying text. The
messages are related through graphical images, on alternate pages, with text to
accompany the graphics. Toe concepts such as DBR, buffer management,
and batch sizing are all described. The Race details an approach to achieving
ongoing improvement and is thus complementary to The Goal. The roles of
T, I, and OE and "cost world" versus "throughput world" are detailed.
155
Grackin, Ann. "Real-Time Performance;' Manufacturing Systems Vol. 16,
No.4 (1998): 100.
Keywords: Accounting Procedures, Information Systems, Inventory
Management
A fundamental problem in business today is that the quality of information
received and the time in which it is received does not help achieve optimal
business performance. Metrics drive business behaviour and, ultimately, the
enterprise's success. Most measures used by business managers today are
based on antiquated financial methods. There are efforts underway by mem

bers of the financial community and advocates of TOC to introduce new
financial concepts and systems to solve these problems. One of these concepts
is throughput accounting.
156
Graves, Chris, & Gurd, Bruce. "Throughput Accounting: A Revolution in
the Making?" Australian CPA Vol. 68, No.7 (1998): 36-39.
Keywords: Book Review, Accounting
Goldratt's business novel, The Goal, emphasises that managers require a para
digm shift from building inventory to increasing throughput. This article ex
amines TOC, Goldratt's philosophy of how to minimise the influence of
constraints to achieve greater throughput, via SFS.This article presents 'infor
mation on management in cost accounting. The authors discuss traditional
cost accounting and provide information on Optimised Production
Technology (OPT). The authors make reference to the book, The Theory of
Constraints and Its Implications ForManagement Accounting (263). They iden
tify and discuss one aspect of Throughput Accounting.
157
Greco, M. "This Isn't Yesterday's UPS;' Apparel Industry Magazine
(September 1995): 86-90.
Keywords: Apparel Industry, Buffer Management, Scheduling
This brief article introduces a new version of a software package designed for
use in the apparel industry. Soft UPS, the software package, has been updated
to include TOC methodologies. Retailers now want to be replenished with
fast-selling lines as soon as they run out. This software package, which incor
porates aspects of TOC, is held up as a means for manufacturers to meet the
demands of their clients.
158
Greenfield, David. "Delivering On A Promise;' APICS-The Performance
Advantage, Vol.7, No.4 (1997): www.apics.org/magazine/apr97/editorle.htm
Keywords: Inventory, Reference Editorial
This editorial discusses the importance of inventory and the traditional view
of inventory. Greenfield introduces several new approaches and references ar
ticles relating to these topics. Articles by Goldratt, McMullen, and Barry are
mentioned.
159
Gronseth, Steve. and Joe Ray. "Keeping the Results Coming: Fighting
Inertia in TOC Implementation;' APICS-Constraints Management
Symposium: Proceedings (1998): 5.
Keywords: Inertia
Inertia is described as a period of time during which a company makes little
or no progress in generating throughput increases. The causes of inertia asso
ciated with a TOC application are described, and the negative consequences
of inertia discussed. To minimise inertia, a series of seven steps can be em
ployed. These steps are presented and discussed.
160
Grosfeld-Nir, Abraham and Ronen Boaz. "A Single Bottleneck System with
Binomial Yields and Rigid Demand." Management Science Vol. 39, No.5
(1992): 650-654.
A solution to the lot-sizing problem in single bottleneck systems is developed.
Such systems are multistage production systems, wherein only one set-up cost
is non-zero. The bottleneck, which refers to the stage with the non-zero set
up, is a critical resource because its throughput determines the throughput of
the entire system. Goldratt and Cox (1986) and Lundrigan (1986) proposed
the OPT approach to this problem, in which production proceeds with bino
mial yield lot-sizes. Multiple production runs are required given that full sat
isfaction of demand is required. Assuming binomial yields, the optimal
control problem is reducible to single-stage optimal lot-sizing. However, so
lution to the problem versions that assume more than one bottleneck are yet
to be examined.
161
Guide, Vincent D. "A Simulation Model of Drum-Buffer-Rope for
Production Planning and Control at a Naval Aviation Depot." Simulation
Vol. 65, No.3 (1995): 157-168.
Keywords: Manufacturing, Remanufacturing, Scheduling, Simulation
This paper describes a SLAM II-FORTRAN simulation model of DBR as a
production planning and control methodology at the engine component di
vision of a U.S. Naval Aviation Depot. The model represents all of the func
tional areas of the remanufacturing facility (a total of 27 shops) required for
the repair/overhaul of an aviation component, as well as DBR for production
planning and control. The model allows for experimentation in a variety of

areas, including setting buffer sizes, buffer management techniques,
input/output control, and capacity management. The model experiments in
dicate that DBR is an extremely robust method of production planning and
control and that DBR leads to better performance to schedule, lower work-in
process inventory and improved use of present resources.
162
Guide, Vincent D. "Scheduling Using Drum-Buffer-Rope in a
Remanufacturing Environment," International Journal of Production
Research Vol. 34, No.4 (1996): 1081-1091.
Keywords: Remanufacturing, Scheduling, Simulation, Military
Scheduling in a remanufacturing environment is more complex and the
scheduler must deal with more uncertainty than in a traditional manufactur
ing environment. In order to properly schedule in a remanufacturing envi
ronment the schedule must be able to cope with several complicating factors
which increase variability. The schedule must be able to cope with conditional
routings, a routing that mayor may not be taken due to the condition of the
unit. The schedule must also be able to cope with dependent events, ego
Operation B cannot begin until Operation A is completed. DBR offers an ex
tremely robust method of scheduling. A schedule built using DBR can take
both conditional routings and dependent events into account. A realistic ex
ample from a military depot is discussed in detail and each step required to
build a schedule using DBR is explained fully. This paper also shows the re
sults from a simulation model of DBR at a repair/rework depot which are
benchmarked against the present production planning and control system.
163
Guide, Vincent D. "Scheduling with Priority Dispatching Rules and Drum
Buffer-Rope in a Recoverable Manufacturing System;' International
Journal ofProduction Economics Vol. 53, No.1 (1997): 101-116.
Keywords: Remanufacturing, Scheduling, System Design
A recoverable manufacturing system seeks to minimise waste through a vari
ety of strategies, including remanufacturing. A number of priority dispatch
ing rules are examined in combination with DBR under a variety of utilisation
levels, via a simulation model of an actual remanufacturing facility. The find
ings indicate that simple priority dispatching rules work best to support DBR,
but that other factors must be considered when using DBR for scheduling in
a remanufacturing environment with changing demand rates.
164
Guide, Vincent D. and G. Ghiselli. "Implementation of Drum-Buffer-Rope
at a Military Rework Depot Engine Works:' Production and Inventory
Keywords: Application, Aviation, Military, Remanufacturing, Scheduling
This application of DBR in a military environment includes data on the re
sults of implementing DBR for production planning and control at a Naval
Aviation Depot. The steps taken during the adoption ofDBR by the depot are
presented in detail. The reduced work in process, increased inventory turns,
and decreased turnaround times indicate DBR provides a superior method
for production planning and control in this remanufacturing environment.
165
Gung, R. R. and H. J. Steudel. "A Workload Balancing Model for
Determining Set-up Time and Batch Size Reductions in GT Flow Line
Work-Cells:' International Journal of Production Research Vol 37, No.4
(1999): 769-791.
Set-up time and batch-size reductions-cornerstones of Quick Response
Manufacturing (QRM)-are often viewed as pathways leading to lower WIP
inventory levels and reduced manufacturing lead times. However, set-up time
and batch-size reductions may not always yield such improvements. Increased
workload due to the additional set-ups can lead to a violation of the system's
capacity constraints and cause system instability, which results in increased
manufacturing lead times and WIP inventory levels. A workload balancing
model in conjunction with a heuristic model is presented to determine the re
quired set-up time reduction schemes for different levels of batch-size reduc
tion. The model is based on Toe to balance the flow line and limit the
workload of each workstation such that each workstation meets the reserved
capacity constraint. It is shown that a reduction plan determined by the work
load balancing model will maintain the cell's system stability and improve its
performance. Incorporating the workload balancing and simulation models,
a general approach for selecting the most appropriate reduction plan is illus
trated through an example of a gear manufacturing cell. The implications for
management are that pre-established levels for set-up time and batch size re
ductions are not always effective, and that effective reduction plans need to be
preceded by system capacity and performance analysis to determine the ef
fects of such reductions prior to implementation.
166

Gupta, Mahesh, Sid Baxendale and Kathy McNamara. "Integrating TOC

and ABCM in a Health Care Company!' Journal of Cost Management Vol.

11, No.7 (1997): 23-33.


The authors present a multimethodology approach to management interven
tion. TOC and ABC are applied in an attempt to take advantage of the syner
gies of the combined approaches. The arguments against conventional cost
accounting are presented, along with the apparent strengths ofTOC and ABC.
The general philosophies behind these new methodologies are examined and
discussed. The multimethodology application to a health care organisation is
detailed. The authors conclude that the combined approaches were able to
create a strategic map for the company to use as the company grows. The' com
pany gained a new insight into product profitability, and a previously un
favoured product line proved to be the most profitable.
167
Gupta, Sanjeev. "Beat The Drum (Buffer, Rope)." Manufacturing Systems
Vol. 15, No.9 (1997): 86--88.
The DBR scheduling method has substantial benefits for the supply chain.
Maximised shop floor throughput and minimised inventory, while still re
sponding to unexpected spikes in demand, are achievable via use of this tech
nique. A detailed description of the DBR scheduling system provides
solutions for manufacturing environments (including complex, unstable en
vironments subject to volatile demand or supply). TOe's concepts of mea
surement and constraints are discussed to lead into a detailed exploration of
the use of DBR.
168

Gupta, Sanjeev. "Supply Chain Management in Complex Manufacturing!'

lIE Solutions Vol. 29, No.3 (1997): 18.

Keywords: Scheduling, Manufacturing

Enterprise resource planning and supply chain management (SCM) are in
creasing in popularity as a result of their effectiveness in complex manufac
turing operations. Unlike conventional MRP approaches, SCM does not rely
on goods stored in a warehouse instead moving goods across the vendors'
enterprises depending on customer orders and known constraints. Despite
the benefits of SCM, however, many manufacturers of complex industrial
products are still using traditional methods. A recommended SCM approach

is the DBR technique, a scheduling and execution method that stemmed from
Goldratt's studies on TOe. The TOC/DBR scheduling engines address com
plexity, exploit available capacity and synchronise the entire plant.
169
Gupta, Sanjeev. "Do You Need Software for DBR." APICS-The
Educational Society for Resource Management (1998).
Keywords: Manufacturing, Information Systems
The choice of whether or not to implement DBR is no longer the big question
facing manufacturing managers. The focus is now on the role of software in
deploying DBR. Using 5FS to identify the need for software provides details
on who should look to implement DBR/TOC-compliant software. Gupta dis
cusses situations where manual application of DBR becomes impractical.
However, for most manufacturers implementing DBR, results can come
quickly by simply focusing on understanding what DBR is and appreciating
what it takes to change.
170

Hall, Robert & Nicholas P. Galambos, & Margaret Karlsson. "Constraint
Based Profitability Analysis: Stepping Beyond the Theory of Constraints;'

Journal of Cost Management Vol. 11, No.4 (1997): 6-10.

Keywords: Accounting, Application, Multimethodology

Businesses must combine activity based management (ABM) with TOC to

maximise profitability in the company. Constraint-based profitability analy
sis (CBPA) is the analytical tool that creates an understanding of profitability
that goes beyond the aggregated numbers of the annual reports by helping
businesses understand the true profitability of the individual products they
manufacture for better internal decision making. CBPA helps managers in a
capacity constrained business determine the ideal product mix to maximise
profitability. An example shows how the Timken Company's Latrobe Steel
Division improved operating income by 20% using CBPA.
171
Hansen, Ray. "Implementation of the Theory of Constraints: What You
Should Know Before You Start." APICS-Constraints Management
Symposium: Proceedings (1998): 13-14.
Keywords: Implementation
The progress, popularity and pitfalls of TOC are discussed. As TOe's popu
larity develops, companies must be aware of consultants claiming expertise.
There is a need for a thorough analysis to implement change and focus efforts
via 5FS. Expertise is necessary to identify the correct techniques to apply.
Empowering employees is a valuable characteristic of a successful implemen
tation. Coaching skills are an essential element in the change process. Hansen
promotes a four-faceted implementation process, in order to overcome road
blocks to organisational development.
172
Hansen, Ray and Dawna Hansen. "Achieving Breakthrough Performance
It's Not Luck." APICS Constraints Management Symposium and Technical
Keywords: Continuous Improvement, Multimethodology, Thinking Processes
The authors claim the benefits of attending this presentation/reading the pro
ceedings are: the use of TOC to break paradigms in TQM and employee em
powerment; the use of TOC to achieve breakthrough performance in
Kaizen/lean production environments; making current reality faster and
more powerful through the use of Critical Relationships Diagramming; plus
enhancements to TOC measurements, leadership and current reality analysis.
The enhancements to the Thinking Processes are detailed and discussed. The
summary contains a quote from the Iacocca Institute; "incremental improve
ment of the mass production system of manufacturing would not regain
competitiveness for u.s. companies." The author claims TQM, IIT, Kaizen
merely allow organisations to harvest the low-hanging fruit of incremental
improvement. Breakthrough performance can be achieved by using TOC and
breaking the paradigms implicit in these approaches.
173
Harrison M. "MRP II and Finite Capacity Scheduling:' Works Management
(U.K.) December (1991): 20-23.
Keywords: Capacity Planning, MRP II, Production Planning
The author pinpoints what is said to be a major weakness of MRP II systems

for production planning. That is, their recognition of only machine capacity

as a constraint when overload situations develop. The author argues that

manpower, materials and other variables can affect capacity and shows how

the technique of "finite capacity scheduling" used in association with MRP

and MRP II can help. The paper gives fictitious examples.

174

Harrison, Mike. "The Selection of Planning and Scheduling Software for v
A-T & I Plants." APICS Constraints Management Symposium and Technical


Keywords: Multimethodology, MRP II, Scheduling, V-A- T Analysis

The author promotes the use of Finite Capacity Scheduling as a means of
gaining control where little existed before. Reference is made to the numerous
organisations that recognise their lead times are too long, inventories too
high, and DDP is poor. MRP II is criticised and comment made about the ten
dency for managers spending too much time fire-fighting and expediting. The
author states it is time for Finite Capacity Scheduling to be harnessed to the
bedrock of the company's database and transaction processing facilities pro
vided by the MRP II system. The work of Synchronised Manufacturing Ltd. is
mentioned, in reference to their consultancy which identifies appropriate
scheduling software for manufacturers. The specific typical problems inher
ent with V-A-T & I plants are outlined and reference made to the selection of
appropriate software.
175
Hayden, John E. Lt. Col. "A Primer on the Theory of Constraints." The
Mobility Forum: The Journal of Air Force Logistics Vol. 2, No.1 (I993):
28-29.
Keywords: Introduction, Military
Senior leaders of the Air Force Quality Council adopted TOC as a tool to be

used in implementing quality improvement throughout the Air Force. A brief

outline of TOC is presented.

176

Hein, Kevin. "Lucas Variety: Production Application." Best Practice Vol. 6,

No.2, (1998): www.goldratt.com/lucas.htm


Management at the Lucas Variety plant, in Detroit, applied TOC to focus im
provement efforts on the production of drums. The application yielded impres
sive results: 76% increase in output, 24% reduction in cycle time, over a 100%

improvement in delivery performance, and a reduction in the operating hours of

the plant. This application example leads into how to improve a system, and ul
timately the 5FSofTOC. Hein states that TOC is a focusing tool that can be used

in conjunction with TQM and other continuous improvement tools.

177

Hinneburg, Patricia A., William Lynch and Joseph Black. "Lean Logistics;'

APICS Constraints Management Symposium and Technical Exhibit:


Keywords: Application, Aviation, Logistics, Military, Reengineering

The three authors each present a section of this article. Firstly, Hinneburg re
lates how she was awakened to TOC after reading The Goal and meeting
Dr. Goldratt and Bob Fox. In her role in charge of an Air Force Logistics
Command, she was able to prepare her organisation for the implementation
of TOe. The article emphasises the importance of training, and discusses the
approach to the design of the training process. The implementation was suc
cessful and consequently it was realised other divisions of the organisation
could benefit from constraint management. Part II outlines the TOC educa
tion of a couple of Air Force officers, and their involvement in applying TOe.
The implementations were said to have dramatic results. The authors apply
the generic term "lean logistics" to the approach, separate from TOe. Detailed
information is given about the concepts applied. The third part of the article
describes TOC as a multipurpose tool set. The benefits of the application of
TOC and lean logistics are given.
178

Hobbs, O. Kermit Jr. "Applying TOe in a JIT Environment:' APICS
Constraints Management SIG Newsletter, (May 1996): 1-3.


The implementation of JIT manufacturing philosophies has provided

Amadas Industries with significant gains in productivity and quality. Two
years on, and the company has changed dramatically, but appearances indi
cated improvement had reached a peak. To overcome this hiatus in improve
ment, a study was carried out on the philosophies of Goldratt's TOe. These
philosophies were considered to be quite consistent with the approach of JIT.
This study also identified constraints, which were managed generating im
provements. The author considers that TOC provides an excellent comple
ment to JIT. This multimethodology approach has proven to be very effective
for Amadas Industries.
179
Hobbs, O. Kermit Jr. "Managing ]IT Toward Maturity." Production and
Inventory Management Journal Vol. 38, No.1 (I 997): 47-50.
Keywords: Application, Continuous Improvement, fIT, Manufacturing
Hobbs details the application of JIT, at Amadas Industries, Suffolk, VA. JIT
improved performance to a degree; however improvement stagnated after the
initial implementation. Some time later TOC was applied. TOe's continuous
improvement focus and constraint orientation produced the steady improve
ment their management was seeking. Thus, the organisation benefited from
the application of TOe, and some of those benefits are detailed.
180

Hodgdon, Bill. "Identifying and Elevating the Constraint Sales Skill:'

APICS-Constraints Management Symposium: Proceedings (1998): 62-63.

Keywords: Marketing, Sales Technique

This is an introduction to a constraints-oriented sales technique. Operations

and marketing solutions may be the answer for many organisations. In some
cases, sales may be the constraining variable. By learning the current and de
sired business results of customers, you have the best chance of meeting sales
goals. Success can be derived from helping the customer meet their own de
sired results. If you are in senior management or marketing, first determine
the key market segments to focus on. Then learn the current and desired busi
ness results of each market segment. Develop better products, services, poli
cies and train the sales force to achieve results.
181
Holmen, J. ''ABC v TOC: It's A Matter Of Time." Management Accounting
(U.S.) Vol. 76, No.7 (1995): 37-40.
A multimethodology accounting approach is implied in the subtitle "Activity
Based Costing and the Theory of Constraints Can Work Together." The au
thor outlines the ABC argument against traditional cost accounting as well as
the TOC argument against the entire cost concept. The crux of the argument
that TOC and ABC can work together is that their differences exist because of
a different time horizon in each approach. Holmen claims TOC is short-term
decision-focused and ABC is long-term focused.
182
Holt, James R. "A Candid Comparison of Operations Management
Approaches:' APICS-Constraints Management Symposium: Proceedings
(1998): 76-78.
This is a summary of the key differences between traditional batch, cell, TIT,
lean, TOC, and agile production control methods. A production simulation
model compares common measures (WIP, flow time, efficiency, throughput,
profit, and return-on-investment) for each of the control methods.
183

Houle, Dale T. and Tracey Burton-Houle. "Overcoming Resistance to

Change the TOC Way:' APICS-Constraints Management Symposium:


Keywords: Resistance to Change, Thinking Processes

Use of tools from the TOC Thinking Processes provides a detailed explana
tion of how to successfully implement changes. The common difficulties as
sociated with change are described within the five layers of resistance and
overcome with the five phases of buy-in. The five layers of resistance to change
are described and discussed, providing reasons on how they can slow down or
even stop change. The five phases of buy-in look at the use of the CRT, FRT,
PRT,NBR, and Evaporating Clouds. The trees are used at various stages to en
sure that the participants can act in sync and work cohesively to successfully
implement changes. No approach is fool-proof, but the application of the
Thinking Processes have shown some fairly significant results.
184
Houston, M. and J.Talbott. "Critical Thinking and The Goal." Management
Accounting (U.S.) Vol. 75, No.6 (1993): 60.
Keywords: Accounting, Education, The Goal
This brief article discusses using the philosophies presented in The Goal as
tools to teach accounting students how to solve real-world problems. Extracts
of several reports written by students who applied the TOC philosophies form
the body of this article. Topics covered include continuous improvement, ac
counting and bottlenecks. The authors conclude that The Goal has value in
teaching critical accounting thinking.
185
Hrisak, D. M. "Breaking Bottlenecks and TOC." Chartered Accountants
Journal ofNew Zealand Vol. 74, No.7 (1995): 75.
This one-page article gives a brief introduction to TOC, with specific refer
ence to the impact of system constraints and the IMA/PW book (263). The
TOC approach to accounting is described as using a variety of variable cost
ing in which direct labour is usually considered a fixed cost. Efficiency and
utilisation reports are not to be used in TOC accounting, although these in
dicators may be monitored for constraints. The author claims the real diffi
culty in implementing TOC is gaining everyone's cooperation and
commitment-both accountants and senior management.
186

Hurley, Simon F., Alan C. Wright and Jeffrey L. Foote. ''A Theory of

Constraints Approach to Common-Sense Continuous Improvement."

Chapter 15 in Advanced Manufacturing Systems and Technologies, 1998.

Keywords: Buffer Management, Continuous Improvement, Scheduling

Many of the managerial tools and techniques that promise to improve per
formance do not always deliver. The few successful MRP II implementations
in place today suggest that this method did not live up to expectations. The
Kanban element of JIT requires a long implementation lead-time that pre
cludes it as a quick improvement strategy. The objective of TQM is to delight
customers with high-quality goods and services. The bottom-line benefits
from TQM take several years to materialise. More than half of all TQM pro
grams are abandoned within the first two years. TOe contains an effective, ac
celerated improvement process. It has a sharper focus and a shorter
implementation lead-time than other improvement strategies such as TQM
and JIT.The first section of this chapter establishes a rationale for a successful
"ongoing improvement process." The second section examines DBR. The final
section looks at the enterprise as a whole, in terms of a process of ongoing
improvement.
187
Israni, Arjun. "Application of the Theory of Constraints in the
Semiconductor Industry." APICS Constraint Management Symposium and
Keywords: Application, Manufacturing, Semiconductor Industry
National Semiconductor has been able to release substantial hidden capacity
as a result of the application of TOe techniques, which have now become part
of the daily thinking in National's factories. The strategies adopted by
National to apply Toe at a selected pilot division are discussed. The unique
demands involved in implementing a worldwide, corporate program in the
complex semiconductor industry are outlined and discussed. The results of
the application are documented.
188
Jacobs, Brian, Kenneth R. Morrison and Charles W. White. "Completely
Synchronous Manufacturing for Automative Assembly-Some Lessons
Learned." Computers & Industrial Engineering Vol. 23, No. 1-4 (1992):
261-265.
Keywords: Automotive Industry, Manufacturing, Simulation
The advantages of SM include quick response to market demands, minimum
inventories, and high quality. The challenge faced in a synchronous assembly
plant environment is to ensure that both the technology or machines and the
individuals or teams are optimised together, for the best overall result. Some
simulation animation tools have been developed for illustrating some of the
concepts of synchronous assembly. Simulation of the synchronous plant
could be accomplished with a focus on the breadth of optimisation sought.
The impacts of local versus broad optimisation could be demonstrated and
the relative value of one focus versus the other could be assessed. A typical
asynchronous system is often simulated by creating entities at the start of the
model, following these entities through the logic, making decisions based on
probability distributions, and delaying operations according to other proba
bility distributions.
189

Jayson, Susan. "Goldratt and Fox Revolutionising the Factory Floor;'


Keywords: Accounting, Application, Manufacturing

In the 1970s, Goldratt invented a mathematical formula for scheduling work

flow. This formula formed the basis for his successful optimised production
technology software system to improve plant efficiency. Goldratt and his as
sociate, Bob Fox, are convinced that the growing imbalance of manufacturing
capabilities between the West and the East must be changed. Fox believes cur
rent cost accounting concepts lead to uneconomical practices and poor global
performance. However, the use of three global operational measures
throughput, inventory, and operating expense-allows a company to
determine the impact of factory floor decisions on its ability to make
money, thereby enhancing its competitive position. According to John
W. Annick, a project manager at General Electric, many businesses flounder
because management fails to provide leadership for solving problems.
Goldratt's efforts appear to be producing both a cultural revolution in manu
facturing and a recognition by accountants of the problems with cost
accounting.
190
Iebb, F. "Message in a Bottleneck: Theory of Constraints;' Management
Today (U.K.) (October 1996): 96-99.
Keywords: Application, United TechnologiesAutomotive
Iebb discusses the work of Goldratt who he says has moved on from the rather
disastrous sortie into scheduling software, known as Optimised Production
Technology, with the development of ideas on bottleneck management
encapsulated in TOe. Iebb explains that Toe boils down to the notion
that the throughput of an entire plant is the measure of a company's
success, and outlines five steps in a TOC action plan. The author believes
that TOC is basic common sense, but finds that its message has not
reached all those who should have received it. The article looks at an organi
sation which has embraced TOC, United Technologies Automotive
(U.K.), where the constraint in foam moulding has been overcome and an
accounting system to measure the productivity of the whole operation
has been introduced. Results of the application reveal improvements of as
much as 150%.
191
Joy, Louis W., III and Francis Smith. "Bottleneck Management and
Production Sequencing at EMC Technology;' APICS-Constraint
Keywords: Manufacturing, Multimethodology
An integrative priority and capacity planning and control methodology called
"Production Sequencing" takes the best attributes of MRP, Kanban, finite
scheduling, and demand-based flow techniques and blends them into a sin
gle, total shop floor management system. The components of Production
Sequencing are presented, along with how one company, EMC Technology
Inc., developed this system to drive productivity, quality, and customer service
improvements.
192
Kayton, David, Tim Teyner, Christopher Schwartz, and Reha Uzsov.
"Focusing Maintenance Improvement Efforts in a Wafer Fabrication
Facility Operating Under the Theory of Constraints;' Production and
Inventory Management Journal Vol. 38, No.4, (1997): 51-59.
Keywords: Application, Manufacturing, Semiconductor Industry
The process by which very large-scale integrated (VLSI) circuits are made is
one of the most complex processes in commercial use today. In particular, the
wafer fabrication stage, where the circuits are fabricated on wafers of silicon
or gallium arsenide using chemical and mechanical processes, involves hun
dreds of operations. The circuits are composed of multiple layers of material,
each of which requires similar processing. Hence, one lot of wafers may
visit a given workstation several times before being completed, leading to
reentrant product flows. The shop-floor control task in these facilities is com
plicated by a number of factors. Thus there is a need for systematic ap
proaches to shop floor control and maintenance management based on a clear
understanding of the dynamics of the production system and the potential
impacts of decisions. The TOC provides such a systematic approach. While

TOC concepts have been widely used in many different industries, their ap
plication in the wafer fabrication environment is not straightforward. This
type of application is discussed along with specific attention to considering
the impact of certain forms of system variability on the TOC production line.
193
Kee, R. "Integrating Activity Based Costing (ABC) with the Theory of
Constraints to Enhance Production Related Decision Making." Accounting
Horizons (December 1995): 48-61.
Keywords: ABC, Accounting, Multimethodology, Product Mix
Outsourcing is a process for restructuring a firm's operations to create a more
flexible, focused, and competitive production structure. Outsourcing involves
differentiating between commodity components and those that are strategic
to the firm's products. The author considers the outsourcing decision and that
TOC and ABC represent alternative paradigms for modelling a firm's pro
duction structure. ABC is described as an extension of traditional cost systems
and provides more accurate product cost information. Failings of ABC are
said to include an inability to explicitly reflect the physical usage of resources
by production activities and the capacity of these activities as well as the in
ability to identify constraints and predict their effect on the company. The au
thor comments that companies who have used both Toe and ABC have
reported benefits from the application. The point is made that the different
approaches can be integrated within a common framework, thus taking ad
vantage of the synergies which are derived from integrating the two
approaches.
194
Kee, Robert. "Integrating ABC and the Theory of Constraints to Evaluate
Outsourcing Decisions." Journal ofCost Management Vol. 12, No.1 (1998):
24-36.
Keywords: ABC, Multimethodology, Outsourcing
Outsourcing is a process for restructuring a firm's operations to create a more
flexible, focused, and competitive production structure. Outsourcing involves
differentiating between commodity components and those that are strategic
to the firm's products. Information developed from TOC and ABC may be in
tegrated to evaluate the economic consequences of outsourcing commodity
and strategic components. The TOC and ABC may be used to evaluate the
economic feasibility of outsourcing, the time frame over which it is feasible,
and the reason(s) why it is economically feasible.
195
Kendall, Gerald I. Securing the Future: Strategies for Exponential Growth
Using the Theory of Constraints. Boca Raton, FL: St. Lucie Press/APICS
Series in Constraints Management, 1998.
Keywords: Application, Book, Continuous Improvement
Today's managers encounter tremendous resistance in getting others to buy in
to change. The ongoing rounds of downsizing and upheaval have taken their
toll, leaving a legacy of scepticism. Therefore, managers must not only have
ideas, but must be experts at "selling" the correct answers, information,
and measurements to address issues of change. Securing the Future uses the
TOe, a breakthrough improvement methodology, to provide solutions
to today's management problems. It documents the step-by-step approach
to achieving a strategic vision of long-term competitive advantage, employ
ment security, and customer satisfaction. Using a combination of parable,
methodology, and case studies, this book presents an in-depth management
road map to exponential improvement in any organisation. If you are looking
for concrete ideas on how to build the intellectual capital your organisation
will need in order to thrive in years to come, Securing the Future will show you
the way.
196
Klein, D., J. Castellano, and H. Roehm. "Building a Continuous
Improvement Culture:' CMA Magazine (March 1994): 27-31.
Keywords: Application, Continuous Improvement, Statistical Fluctuation
A variation of constraint management was implemented at three companies
in Grand Rapids, MI. The article is written from the perspective of
external consultants who work with the manufacturers to implement
a process of continuous improvement. The nature of the consultation is
described as a series of steps through which the company and its em
ployees are guided through. The authors of this article have approached
continuous improvement from an organisational rather than production
process level.
197
Klein, D. and M. Debruine. "A Thinking Process for Establishing
Management Policies:' Review ofBusiness VoI.16, No.3, (1995): 31-37.
Keywords: Application, Manufacturing, Thinking Processes
A detailed look at why American companies are losing market share in the
highly competitive global marketplace. The authors present a systematic
thinking approach designed to overcome the challenges facing American
companies today. The main focus for this work is the application of the
Thinking Processes as a mechanism for solving many of the common prob
lems facing u.s. businesses. A thorough description of the Thinking Processes
is accompanied by considerable use of Trees and Conflict Resolution
Diagrams throughout the article. The balance of the article details the appli
cation of the Thinking Processes at Western Textile Products Company in
Missouri. The authors reach the conclusion that TOC and its Thinking
Processes can help u.s. companies remove outdated policies and leap frog
over their competition.
198

Knill, Bernie. "Does TOC Fit SCF?" Material Handling Engineering, Vol. 53,

No.8 (1998): 2.

Keywords: Application, Production Management

The author discusses the TOC as a good strategy for improving Supply Chain
Flow (SCF). The discussion provides information on TOC, factors that make
TOC relevant to companies, application of TOC to traditional supply chain
management.
199
Koutal, R. "Bottlenecks Can Be Found Using Quality Tools;' Quality
Progress (November 1995): 15.
Keywords: Quality
A reply to T. Gautschi's "Theory of Constraints Spots Weak Management" in
Design News, October, 1995, p. 166 (128). Koutal claims that many ofthe ex
isting quality tools can perform the same tasks for which Gautschi was pro
moting TOe.
200
Koziol, David. "How the Constraint Theory Improved a Job-Shop
Operation;' Management Accounting Vol. 69, No. 11 (1988): 44-49.
Keywords: Application, Job Shop, Manufacturing, Scheduling
When Valmont/ALS (Brenham, TX), a job-shop steel fabricator, was faced
with mediocre inventory turnovers, increasing amounts of overtime, and an
industry recession, its solution was to adapt the JIT formula to its operation.
After deciding to produce only to customer order, it was necessary to identify
the constraints (bottlenecks) in the operation. The scheduling system would
then allow for strategically sized inventory buffers to be placed directly in
front of the constraints. (A JIT site would have small buffers throughout the
plant.) The improvements resulting from the new method include lead time
for certain products cut to half the industry standard, smaller batch sizes
making it easier to change processes more quickly, quality efforts being redi
rected at processes rather than inspection: sales increasing without a propor
tionate increase in operating expense and reduced inventories.
201
Krausert, Bob. "What is Theory of Constraints All About?" APICS The
Performance Advantage Vol. 8, No. 10 (1998): 40.
Keywords: Implementation Issues
This article provides readers with some insight into the practical aspects of
constraint management. In The Goal the protagonist takes the actions needed
to reduce cycle times, lead times and inventory levels while increasing sales,
without increasing operating expenses. The question is: So why is it more dif
ficult for your company to do it?
202
Kroll, Karen. "The Theory of Constraints Revisited: Improving Production
Operations:' Industry Week Vol. 247, No.8, (1998): 20-21.
Keywords: Accounting, Performance Measures
When TOC was introduced in the mid-1980s, both business practitioners and
academicians credited it with pointing out the flaws in some of the calcula
tions commonly used to measure manufacturing performance. Today, its con
cepts are looking even more relevant as companies seek to improve their
bottom lines.
203
Kron, Penny. "Warren Featherbone Co:' Apparel Industry Magazine
(December, 1992): 24-28.
Keywords: Apparel Industry, Application
The Warren Featherbone Co. a 109-year-old apparel manufacturer is reaping
the benefits of improvements to its manufacturing and supply chain. These
benefits are derived from Quick Response which is based on Goldratt's TOe.
(Further discussion on this application is provided by Karen Schaffner: 317,
318,319).
204
Lambrecht, Marc. and Segaert Alain. "Buffer Stock Allocation in Serial and
Assembly Type of Production Lines:' International Journal of Operations
and Production Management Vol. 10, No.2 (1990): 47-61.
Keywords: Buffer Management, Comparison, Scheduling, Simulation
This academic paper addresses the role of inventories in production
processes, with the main focus on buffers. It is stated that a balanced line
rarely occurs because of the existence of precedent constraints, variability and

set-up times. The topic of buffer allocation is raised, with reference to the
placement, size, and the effect on work-in-process inventory. A model of a
production line is presented in which the Kanban system is used. Multiple
buffers exist and different experiments were conducted at differing buffer lev
els. The authors conduct a simulated comparison between a TOC (long-pull),
TIT, and Balanced Line approach to scheduling. Results of the simulation ex
ercise are detailed.
205
Lambrecht, Marc and Lieve Decaluwe. "]IT and Constraint Theory: The
Issue of Bottleneck Management." Production and Inventory Control
Journal (Third Quarter 1988): 61-65.
Keywords: Application, Bottleneck Management, Comparison, Scheduling
MRP is inadequate in scheduling production in that although MRP appears

to be a pull system, in the planning stage, it is clearly a push schedule in the

operational stage. The authors say scheduling that suits capacity should be
come normal practice. TIT and TOC abandon the security blanket of work- in
process inventory which hides inadequacies and variance within the system.

Two case studies are detailed as examples of TOC (referred to as "synchro
nised manufacturing" or "sync" applications). The findings from these appli
cations are that the TOC approach is more robust than TIT which is sensitive

to changes in the production plan. It is stated that the two cases show the im
portance of bottleneck or capacity management.

206

Latamore, Berton G. "For Real Customer Satisfaction, Try a Little TOC."

APICS The Performance Advantage Vol. 9, No.3 (1999): 30.


The author presents case studies of implementation of TOC in three manu
facturing organisations: Warren Featherbone Co. Inc., Ball Seal Engineering,

and Orman Grubb Company. Each of these manufacturers found that TOC

delivered positive results by reducing lead times and removing constraints.

207

Leach, Larry. The Critical Chain Project Managers' Fieldbook. Idaho Falls,

ID: Quality Systems, 1999.

Keywords: Book, Project Management

The Critical Chain Project Managers' Fieldbook provides the method to create

unprecedented project success. Critical Chain Project Management (CCPM)

manages the uncertainty that causes project failure and project team stress.
Unlike complex 1,OOO-page books reiterating complicated methods that
haven't worked for forty years, The Critical Chain Project Managers' Fieldbook
helps you focus on a simpler path to project success. The Fieldbook provides
practical procedures to build and use CCPM plans. It provides a straightfor
ward explanation of the TOC underlying CCPM. The text includes many fig
ures and examples that enhance understanding. Hundreds of project teams
have already used CCPM to achieve new performance levels, while improving
team satisfaction. University classes use The Critical Chain Project Managers'
Fieldbook as a text. The Fieldbook provides a basic reference for anyone inter
ested in improving project success. This includes, but is not limited to project
managers; project team members; managers of project managers; project
stakeholders, including customers; managers with workers assigned to project
teams; educators teaching project management; consultants; and other
specialists.
208

Leader, Alan H. "Human Problem Solving As A Sustainable Technology:'

14th Irish Manufacturing Conference, Dublin, Ireland: Proceedings, 1997.

Keywords: Decision Science, Problem Structuring, Thinking Processes
Decision making is a common activity of managers, and one that is fraught
with many dangers, often leading to the wrong actions being taken and prob
lems recurring. Leader examines the sources of such errors, and postulates
that managers typically fail to correctly identify cause and effect relationships
or follow them to their logical conclusions. He sets up an experiment to test
whether TOC Thought Processes provides a framework for managers to suc
cessfully overcome these errors, handle problems effectively, and be seen as
more competent and more professional. A survey of 175 international
TOC/TP practitioners provided confirming evidence from the 27 who had
completed a full TOC/TP analysis and implementation. No evidence from the
other 19 respondents is given.
209
Levinson, William A., Leading the Way to Competitive Excellence: The
Harris Mountaintop Case Study. Milwaukee WI: ASQ Quality Press, 1998
Keywords: Application, Book, Change Management, Manufacturing,
Multimethodology
Formerly a RCA manufacturing facility, the Mountaintop, PA,plant was pur
chased by the Harris Semiconductor Corporation to expand their manufac
ture of electronic components for military and commercial applications.
Chapters addressing different issues, relating to the application of TOC and

quality techniques, are presented by managers from the Harris Mountaintop
manufacturing plant. This book recounts the real story of Harris
Semiconductor's Mountaintop plant as it went through a radical turnaround
by adopting state-of-the-art management techniques including TOC (SFM),
TPM, and IYM. Understand the active role of management needed during
reorganisation, and learn the tactics that can eliminate tired paradigms. This
book teaches principles, not recipes, and chapters focus on the programs and
activities that, when used together, create synergy needed to successfully
transform an organisation.
210
Libby, Bill. "Reengineering, by the Book." Manufacturing Systems (April
1994): 52-55.
Keywords: Application, Reengineering
The reengineering of Cochrane Furniture, a manufacturer based in North
Carolina, is discussed. Their situation in early 1993 was quite precarious and
their future dependant on the stability of the local economy. A small down
turn would have been sufficient to put them out of business. Management de
cided a big change was needed. A senior manager read The Goal and sought
cooperation from other managers to reengineer Cochrane Furniture. External
input in the form of "coaching" was provided by Spectrum Management
Group. Numerous TOC techniques and tools were applied to the system.
Confidence in the manufacturing department's ability to meet the new short
lead times grew as the reengineering took place. The company became agents
of its customers' satisfaction, and no longer targets for complaints.
211
Lin, F. R., M. J. Shaw, and A. Locascio. "Scheduling Printed Circuit Board
Production Systems Using the Two-Level Scheduling Approach!' Journal of
Manufacturing Systems Vol. 16, No.2, (1997): 129-149.
Keywords: Due Date Assignment, Lot Sizing, Synchronous Manufacturing
In a multiple flow-line manufacturing system, such as a typical printed circuit
board (PCB) production system, scheduling tasks include determining due
dates of customer orders, assigning products to daily production, and releas
ing boards to production lines each day. The main challenge for the schedul
ing system is to coordinate different production resources so they can work
together to improve system performance. The Bi-Level Intelligent Scheduling
System (BLISS) was developed, using a two-level scheduling approach inte
grating product-level and board-level scheduling, to schedule jobs for PCB
manufacturing systems under a daily through weekly planning horizon. A

utility function is added to determine lot size, and four sequencing rules are
evaluated to find the most suitable rule for the scheduling schemes under
study. The lot sizing and sequencing decisions are integrated with the simula
tion module to generate more accurate schedules, with special emphasis put
on the need for coordination. Performance of the two-level scheduling ap
proach is evaluated and compared with that of using product-level or board
level scheduling alone under a variety of manufacturing scenarios. The
performance is analysed under various environments such as different de
grees of due date tightness, order variation, and product variation. Results
show the strength of the two-level scheduling approach, especially in "mis
sion-critical" situations of tight due dates, high variation of orders, and highly
changeable products. The findings also provide guidelines for applying those
scheduling schemes effectively and efficiently.
212

Lippa, Victor. "Measuring Performance with Synchronous Management:'

Management Accounting Vol. 71, No.8 (1990): 54-59.

Keywords: Accounting, Manufacturing, Performance Measurement

Synchronous management starts with the premise that a firm is in business to

make money and not simply to satisfy the customer, improve quality, deliver
goods in a more timely manner, or achieve technological breakthroughs faster
than the competition. Its strategic objective is to simultaneously increase
throughput while reducing inventory and operating expenses. Synchronous
management identifies the constraints to material flow and a T, I, OE-based
profit-improvement strategy for the manufacturing firm. A variety of tactical
actions are then synchronously implemented to address the constraints, with
a resulting synergistic impact on the firm's profitability. The firm that imple
ments a synchronous management approach must adjust its performance
measurements and decision-making criteria. Areas to consider when adjust
ing financial and non-financial performance measures include adherence to
schedule; manning requirements; stockout percentage; product line costing;
throughput; conversion cost; overtime; and current-versus-future-benefit
ratio.
213
Lockamy, A. III and James F. Cox III. "Using V-A-T Analysis for Determining
the Priority and Location of JIT Manufacturing Techniques." International
Journal ofProduction Research Vol. 29, No.8, (1991): 1661-1672.
Keywords: Manufacturing, Multimethodology, V-A-T
The authors take a multimethodology perspective and consider the benefits of

combining JIT and TOe's V-A-T analysis. A detailed description of V-A-T
analysis is presented, along with a thorough description of JIT. The authors
also outline the commonly held but erroneous belief of the emergence of JIT
and how it arrived in the u.s. V-A-T is proposed as a means of aiding the im
plementation of JIT.V-A-T is discussed as a stand-alone methodology, in iso
lation from the other TOC tools. The authors state V-A-T analysis can provide
a prescriptive model which defines those JIT elements which will provide the
most benefits to an organisation. V-A-T analysis is said to be a starting point
for JIT implementation, providing direction for the selection of initial tech
niques and approaches.
214
Lockamy, Archie III and James F. Cox III. Reengineering Performance
Measurement. Boston MA. Irwin Publishers, 1994.
Keywords: Book, Performance Measures
Ask most manufacturers to define the ideal manufacturing environment and
they will agree: it should be integrated, seamless, and highly efficient. This
book shows how to make the organisation's goals, not departmental objec
tives, the top priority by aligning the way each department plans and mea
sures its customer satisfaction strategies and actions. Reengineering
Performance Measurement demonstrates how it is possible to integrate busi
ness functions and meet organisational goals by creating cross-functional
performance measures for cost, quality, lead time, and delivery. Six thorough
case studies of practices at Yamaha, Northern Telecom, Colgate-Palmolive,
and others are featured. Each case study illustrates top performance measure
ment systems at work and provides sound guidance for effectively designing
or reforming your own system. Manufacturing executives and departmental
managers can minimise conflict and wasted resources once they understand
the relationship among organisational strategy, actions, and measurements.
Reengineering Performance Measurement shows you how to use performance
measurement systems to link business activities to company goals and, in
turn, create a seamless, highly effective business unit.
215
Louderback, Joseph and J.Wayne Patterson. "Theory of Constraints Versus
Traditional Management Accounting;' Accounting Education: Theory and
Practice Vol. I, No.2, (1996): 189-196.
This article discusses TOC Accounting issues. The authors define TOe's
Throughput measure differently from Goldratt's definition, and on this basis
they make the following claims: that the TOC Throughput is sales less mate
rial costs which equates to the concept of contributrion margin; TOC does
not recognise other costs as being variable at the unit level; TOC might
thereby conflict with traditional management accounting in decision applica
tions because traditional management accounting defines contribution mar
gin as selling price less all variable costs; and neither articles nor
cost/management accounting textbooks address this issue directly.
216

Low, James, T. "The Theory of Constraints and Activity Based Costing:

Does Cost Allocation Make Sense" Working paper: School of Business

Administration, Wayne State University, Detroit, MI, 1990.


217
Low, James. "Do We Really Need Product Cost; A Theory of Constraints
Alternative;' Corporate Controller Vol. 5, No. 19/10 (1992): 26-36.
Keywords: Accounting, Product Cost, Product Mix
The performance of cost and ABC accounting, as well as the concept of product
cost, are addressed. The argument for the need for product cost is said to be the
basis for managers to establish prices at which to sell products. Low considers this
argument to be invalid as the market establishes prices. Low also attacks the idea
that local optimisation will lead to global optimisation. TOC is offered as an al
ternative to the cost accounting paradigm. A description of the basic concepts of
TOC is given along with a comparison between the throughput world and the
cost world management accounting. The ABC approach is outlined over four
pages, with the technical complexity of the approach evident. The issue of prod
uct mix calculations is analysed. Product mix is determined via the TOC prod
uct mix algorithm, an alternative to an ABC approach. The financial results of the
two approaches are considered, with the TOC approach providing the best result.
218
Low, James T. and D. Laskey. "Throughput Accounting: Why It is Needed
and How to Do It." APICS Constraints Management Symposium and
Why has cost accounting become less relevant for decision making, and how
can it present a distorted picture that leads to incorrect conclusions, even for
such highly recommended operational decisions as reducing inventories?

This paper shows how a set of adjusting entries can serve as the basis for a sys
tem of throughput accounting reports that make sense from an operational

standpoint. The approach is said to still follow GAAP, while obtaining finan
cial reports that make sense. The author gives a thorough outline of the Toe

arguments against cost accounting, and includes financial reports treated in

different manners. These reports highlight the effect of absorption of over
head to inventory on reported profit.

219

Low, James T."Theory of Constraints: A Model for Applying the Theory to

Purchasing;' APICS The Performance Advantage No.1 (1993): 38.

Keywords: Purchasing, Strategic Linkages.

TOe provides a means of arriving at improved solutions that move a firm

closer to its goal and are by no means limited to manufacturing applications.

The logic processes can be used to resolve problems in any environment. This

example points out the potential for strategic links between purchasing man
agement and production operations management to affect dramatically the

profitability of the firm. The ability to identify and to understand strategic

links among the functional areas of the firm is likely to depend on an indi
vidual's understanding of TOe.

220

Low, James T. "Theory of Constraints: Strategic Linkages Between

Purchasing and Production Management." APICS The Performance

Advantage No. 12 (1992): 33-34.

Keywords: Continuous Improvement

Improvement is the goal of every business. In manufacturing, many firms

pursue the goal while remaining oblivious to how strategic linkages between

business functions can block the path to excellence. The strategic linkages that

exist between purchasing and production management are examined. TOe

recognises these linkages and offers a new focal point for improvement. The

5FS are discussed along with TOe accounting measures.

221

Luebbe, Richard and Byron Finch. "TOC and Linear Programming: A

Comparison;' International Journal of Production Research Vol. 30 No.6,

(1992): 1471-1478.

Keywords: Linear Programming, Product Mix Algorithm

Since initial work done by Goldratt in the mid-1980s, and as the concepts re
lated to the TOC have become more developed, many have concluded that the
TOC approach offers nothing in addition to what can be accomplished
through linear programming (LP). Through the use of an example, this paper
compares TOC to LP and clarifies the differences surrounding the TOC phi
losophy and the LP technique. The paper looks at an application of one of the
tools of the logistics and scheduling component, the TOC product-mix algo
rithm, and compares this to use of LP for product-mix decisions.
222
Luther, Robert and Brian O'Donovan. "Cost-Volume-Profit Analysis and
the Theory of Constraints" Journal of Cost Management
(September/October, 1998): 16-21.
Keywords: Accounting, Activity Based Costing, Multimethodology
In the enthusiasm for ABC, the new costing movement often neglects the crit
ical importance of volume and argues that the traditional focus on maximis
ing contribution is no longer relevant. Despite the changes in advanced
manufacturing cost structures, applying modified cost-volume-profit (CVP)
concepts in the modern environment does have continued significance.
Interesting implications follow from a reemphasis of the importance of gen
erating contribution through sales, and efficiency using the infrastructure of
a company to generate volumes. This article expands the traditional concept
of CVP analysis into modern manufacturing situations, incorporates TOC,
and introduces an approach termed "cost-constraint-profit analysis."
223
Lundrigan, Robert F. and James R. Borchert. The Challenge: Increasing
Profits Through Focused Management. Croton-on-Hudson, NY: North
River Press, 1988.
Keywords: Book, Manufacturing, Scheduling, Socratic Method
Following the format of the best-seller, The Goal, The Challenge is a business
novel that demonstrates fundamental principles of SM. The Challenge also
deals with the inherent resistance to change present within any organisation.
Following the characters through an unusual contest of productivity im
provement, the authors present an allegory of the manufacturing world that
will draw readers from all disciplines to a better understanding and apprecia
tion of the challenge and opportunities of Synchronous Manufacturing ap
plication. The Challenge not only challenges traditional manufacturing
maxims and the assumptions on which they have been based, but also
provides the reader an opportunity to repeat the process within his or her own

manufacturing operation.

224

Lynch, William E. and Robert Newbold. "A Practical Approach For

Implementing Critical Chain Management." APICS-Constraints


Keywords: ProjectManagement

A parable of a motor race provides the metaphor for relating the numerous

problems commonly facing project managers. Project managers are very fa
miliar with problems of late, over-budget, and under-performance projects.

The authors quote research which quantifies the extent of the problems faced

in IT projects. This paper introduces critical chain scheduling and manage
ment and some practical lesson in applying it. The traditional project sched
uling vehicles have serious problems. With the CC method we at last have a

vehicle in which we can put some confidence.

225

Mabin, Victoria J. "Using Spreadsheet Optimisation Facilities as a Decision

Aid within the Theory of Constraints Framework." GSBGM Working Paper

9/95, Victoria University of Wellington, New Zealand, 1995.

Keywords: Linear Programming, Product Cost, Product Mix, Spreadsheets

The gap between managers and MS models is bridged by demonstrating how

to use a computer spreadsheet to explore common managerial issues such as

product mix and resource allocation. This paper demonstrates how to set up

a spreadsheet to explore issues such as how to make the most effective use of

scarce resources. Using the optimisation capabilities of spreadsheets, this

question can be answered in minutes. Sensitivity and answer reports are gen
erated automatically, which give the user much information about the quality

of the solution. While Excel is used for this demonstration, the general ap
proach is similar for other spreadsheet packages such as Quattro Pro. The

paper also relates how the use of MS models can be embedded in the wider

TOC, for fuller benefit and understanding. This approach has been applied to

a local company that has gained fresh insights into its operations.

226

Mabin, Victoria J. "From Chicken Coops To Thinking Processes."

Operational Research Society of New Zealand: Newsletter, April 1996.

http://www.mang.canterbury.ac.nz/orsnz/apr96.html.

Keywords: Evolution, Thinking Processes

A general update for those unfamiliar with recent developments in TOe. The
background of Toe is briefly outlined along with mention of Goldratt's busi
ness novels. The Thinking Processes are discussed and explained. The IMA pub
lication by Noreen, et al., is recommended as a summary and critique of TOe.
227
Mabin, Victoria J. "Using the Theory of Constraints in Teaching OR/MS
Within Managerially Oriented Programmes." APORS Fourth Triennial
Conference, Melbourne, Australia 1997.
Keywords: Education, Operations Research
Toe has been under development for around 20 years, and now presents a

body of knowledge and a framework that is complementary to traditional

OR/MS approaches. Like OR in its infancy, it was developed for practical

rather than theoretical motivations, and has been presented in a form that ap
peals to a wide range of readers. It could be argued that this makes Toe bet
ter suited than OR/MS for inclusion on managerially oriented courses, such

as MBA programmes. Based on the experiences of the author in MS/OR and

TOe, in practice and in teaching, this paper suggests a number of ways in

which Toe can be used to enhance problem solving/decision making, oper
ations management, and quality and continuous improvement approaches, in

managerially oriented courses at both graduate and undergraduate level.

228

Mabin, Victoria J. and Tony Alvos. "Using OPT at Expozay International:'

APICS (Australasian Region) Third Conference Proceedings, Auckland

(October 1990): 166-170.

Keywords: Five Focusing Steps, Applications, Manufacturing, Apparel

Although the title uses the term OPT, this paper is actually about the applica
tion of ideas from The Goal, in particular the 5FS, to Expozay International, a
New Zealand-based swimwear manufacturer.
229
Mabin, Victoria J. and Steven J. Balderstone. Theory of Constraints (TOe):
Barriers Real and Imaginary." Operational Research Society of New
Zealand-Newsletter (March 1998): 7-10.
Keywords: Introduction, Barriers
A brief introduction to the philosophy of Toe followed by discussion of the
barriers to understanding and adoption of the methodology. The technical
jargon and eclectic terminology of Toe are identified as barriers to its use.
The language of Toe is not ingrained in our every day dialogue, as is the case
with more established approaches. TOe can be both naively simple and hard
to understand. Barriers resulting from representation of an alternate para
digm are discussed. The article ends with a brief outline of some of the results
of applications of the methodology, aimed at motivating those new to the
methodology.
230
Mabin, Victoria J. and Steven J. Balderstone. "Goldratt's Theory of
Constraints: Lessons from the International Literature." Operational
Research Society of New Zealand-33rd Annual Conference: Proceedings,
September, 1998.
Keywords: Application Results Data
Based on their extensive search of the literature, a summary of the results of
applications of Toe is presented. These results outline the influence of Toe
implementation on operational variables such as lead-times, DDP (Due Date
Performance), cycle-times and inventory levels. The influence on financial
performance indicators such as revenue and throughput is also discussed.
These results are generated from a sample of 80 case studies and vignettes of
applications ofTOC.
231
Mabin, Victoria J. and Jon Gibson. "Synergies from Spreadsheet LP used
with the Theory of Constraints: A Case Study." Journal of the Operational
Research Society Vol. 49, No.9, (1998): 918-927.
Keywords: Application, Linear Programming, Manufacturing,
Multimethodology, Product Mix, Spreadsheets
A case study relating to a food-processing plant is presented. The methods
used to address the case include spreadsheets combined with Goldratt's TOe,
both of which are accessible to practising managers. The paper demonstrates
how standard spreadsheet optimisation tools can be used within a TOe
framework to provide effective decision aids. The results from the case indi
cate real productivity improvements are possible from even small models of a
situation. The paper explores the interrelationships and synergies between LP
and Toe frameworks, and details the steps involved in using them in combi
nation, employing the 5FS and DBR, but not the Thinking Processes. The au
thors argue that traditional LP practice should be modified in light of the ease
with which LPs can be solved, and suggest that the Toe approach provides a
useful framework to guide LP use. The authors share some of the insights
gained both by the analysts and by the company, such as the realisation that
the traditional LP treatment of the product mix problem leads to inferior re
sults to a combined TOC/LP approach because of the way in which the prob
lem is framed. Note also Cox and Spencer (073) revisit the product mix
problem, further reframing the problem using the TOC TPs.
232
Mabin, Victoria J. and Deb Gilbertson. "The Application of Constraint
Management to Manufacturing and Services in New Zealand." In New
Directions In Management, edited by Still, Kouzmin, and Clarke, 193-213.
New York: McGraw-Hill, 1994.
Keywords: Application, Manufacturing, Services
This chapter performs three tasks: First, Constraint Management (TOe) is

described, then a manufacturing application is discussed in detail, and finally,

a service application is outlined. The chapter begins by introducing

Constraint Management, mentioning briefly its evolution and differentiating

TOC from the likes of JIT and TQM. The 5FS ofTOC are presented, as are the

often forgotten Nine Scheduling Rules of OPT. The body of this work details

how Constraint Management (TOC) was applied to a New Zealand swimwear

manufacturer. The company is briefly described before the authors proceed to

discuss the application ofTOC to the production process. Six constraints were

identified and the 5FS were applied repeatedly to them. The results of the ap
plication were quite dramatic. Six lessons learnt from the application are out
lined. Lastly the authors consider how constraint management philosophies

might have been applied in the science sector in New Zealand.

233

MacArthur, John B. "Theory of Constraints and Activity-based Costing:

Friends or Foes?" Cost Management Concepts and Principles (Summer

1993): 50-56.

Keywords: Accounting, ABC, Comparison

The TOC and Cost Accounting approaches to management accounting are
compared and contrasted. The TOC arguments against cost accounting are
presented, along with a description of both approaches. MacArthur mentions
Goldratt's main argument against the conventional approach and claims Cost
Accounting invariably leads to flawed decision making. The common prob
lems associated with local optimisation are discussed. The development of
ABC accounting is outlined, along with the justification for its development.
The author discusses his view of the limitations of TOC accounting, concur
ring with the views of R. S. Kaplan, stating that TOC has a short-run focus
which restricts its usefulness for decision making. This is said to result from
TOC treating nonvariable costs as fixed. The author concludes by claiming the
two approaches have complementary strengths.
234
MacArthur, John B. "From Activity-Based Costing to Throughput
Accounting:' Management Accounting (U.S.) Vol. 77, No. 10 (1996): 30-38.
Keywords: Accounting, Application, Synchronous Manufacturing
Management accountants need to be flexible enough to adapt their costing
systems to the information needs of managers. The article details the applica
tion of throughput accounting to a manufacturing organisation, Bertch
Cabinet Manufacturing, a wood cabinet manufacturer in the u.s. midwest.
ABC had formerly failed to deliver the results needed by management.
Synchronous Manufacturing was applied to the manufacturing facility. The
results of the application included reduced lead-time, improved production
performance, smoother and more predictable material flows, improved staff
morale and customer satisfaction. Sales revenues and profits also increased.
As the recent experiences of Bertch demonstrate, an accounting change to
meet user needs better can be a move to a simpler costing model.
235
Mackey, James T. and Vernon H. Hughes. "Decision-Focused Costing at
Kenco." Management Accounting (U.S.) Vol. 74, No. 11 (1993): 22-26.
Keywords: Application, Accounting, Performance Measurement
Sacramento, CA-based Kenco Engineering Inc. is a high-quality producer of
tungsten impregnated steel cutting edge tools for construction, road building,
and mining power equipment. The family-owned company averages $4 mil
lion to $6 million per year in sales. The company was so successful that man
agement felt little need to collect much cost data and have cost controls.
However, when the company experienced its first losses, president Dave Lutz
decided to implement cost standards. Vern Hughes was hired as a controller,
and he reconfigured the manufacturing process using TIT and TQM philoso
phies. Kenco's specially-engineered costing system has made the price negoti
ation process more efficient and has reduced raw material inventory carrying
costs, wages, and overhead. The system succeeds because it is market-driven.
Hughes demonstrated the benefits of continuous improvement and devel
oped an accounting system that focused operations management on the best
areas for improvement and provided accurate costs to support competitive
bidding. The article details the application of TOC and the results achieved.
236

Maday, Clarence J. "Proper Use of Constraint Management." Production &

Inventory Management Journal Vol. 35, No.1, (1994): 84.

Keywords: Reply, Product Mix, Linear Programming

A reply to the article by Plenert and Lee "Optimising Theory of Constraints

When New Product Alternatives Exist" (282). This article compared and con
trasted the TOC and LP solutions to the product mix decision faced by man
ufacturers. The P-Q product mix example used by Plenert and Lee is said to

follow a one-week time horizon and is therefore not realistic. Maday argues

that rarely would it be necessary to complete integer units each week. Thus the

use of Linear Integer Programming is questioned. Maday considers that mar
keting variables may be manipulated to achieve a more optimal product mix

than that found by Plenert and Lee. Maday states that Plenert and Lee have in
troduced a very specific set of constraints not explicitly covered by the Fox
Goldratt algorithm. The point Maday makes is that certain methods have

appropriate application in certain situations. The criticism of the TOC

product-mix algorithm is based on an application that lacks appropriateness.

237

Maday, Clarence J. "The Bottom Line:' Triangle Business Journal Vol. 10,

No. 19 (1995): 9.

Keywords: Accounting, Activity-Based Cost

The author provides information on constraint management. Constraint
management provides an alternative to cost allocation, including ABC alloca
tion as a means of managing the organisation. Constraint management also
provides a structured approach to solving problems. The five-step problem
solving approach of the TOC is outlined.
238
Maren, Michael. "The Monster Method: How Noel Lee Created the
Management System of the Future." Success Vol. 39, No.5 (1992): 42-49.
Keywords: Application, Manufacturing, Marketing
Monster Cable Products Inc. (San Francisco, CA) sells high-end audio cable
that costs 10 times as much as normal wire. Starting as a two-person opera
tion in 1977, the firm has grown in less than 10 years to employ hundreds of
workers, with sales over $20 million. Company founder Noel Lee stresses the
importance of a specific action plan targeted at one representative or one dis
tributor to boost sales. Monster Cable encourages salespeople to sell the con
cept and not the product. Salespeople are trained to lead customers to a small
display that has three groupings of three pieces of Monster Cable on it. The
setup has the customer choosing among concepts and not which cable to buy.
Monster Cable examines every aspect of a business to spot an opportunity to
make a sale. The company applied TOC to their manufacturing facility, after
management read The Goal. The application of components of TOC greatly
improved lead times and eased scheduling.
239
Marsh, Peter and Frank Griffiths. "Project Management." Supply
Management Vol. 2, No. 19, (1997): 48.
Keywords: ProjectManagement
In his business novel, Critical Chain, Goldratt suggests a solution to the prob
lem oflead times (or completion periods) for developers. Marsh and Griffiths
claim this solution is unethical and legally dubious and may not be effective.
The article is unusual in that it is one of the few responses to Critical Chain,
and also because it is written with a negative slant.
240

May, Neville. "Using the MRP II System for Constraints Management."


Keywords: Multimethodology, Scheduling

The different MRP II application functions and database are an aid to the
identification and management of constraints. Benefits from the use of the
MRP II application arise in the form of improved speed, ease of use, and on
going processing. Practitioners should educate themselves as to the capabili
ties and limitations of their current system prior to moving on to the latest
fad. The need and uses of the APS (Advanced Planning and Scheduling) in
conjunction with ERP systems are discussed. Strong emphasis is placed on the
use of systems already in place. The ERP systems can help obtain a true
TOC/DBR solution when all functions are used correctly.
241
McClelland, Bill. "A Policy Constraint with Serious Consequences: Not
Managing New Product Development and Introduction as a Companywide
Project." APICS-Constraint Management Symposium: Proceedings
(1998): 87-91.
McClelland was a key player in the application ofTOC techniques to a manu
facturing organisation that specialises in audio peripherals for personal com
puters. Inspired by reading The Goal, he undertook training through AGI,
gaining a new perspective on his business, encouraging him to eventually go

on to complete Jonah training. The FRT McClelland developed on the Jonah
course revealed how profitability could be achieved by letting go of the "Cost
World" assumptions. Senior management adopted his suggestion, sales in
creased and new investment was provided by a venture capital firm. Increased
business brought with it a series of new problems associated with distribution
and product quality. TOC principles were applied to project management and
policy issues. The author relates the application of CC techniques to internal
projects and the benefits derived from their use. The CRT and Evaporating
Clouds developed by the author are included with the article.
242
McClelland, Bill. "TOC Thinking Process Tools Applied To Project
Management." APICS-Constraints Management Symposium: Proceedings
(1998): 87-91.
Keywords: Application, ProjectManagement
Companies that develop, manufacture, and sell products are almost always in
the midst of conducting projects that require some level of participation from
every major function within the company. This paper describes how the lack
of global project management created many of the undesirable effects in a
company that is fairly typical of product development companies today. It
also describes how the proper application of TOC philosophy, the TOC
Thinking Process tools, and TOC project management techniques such as CC
scheduling can be used to make an organisation much more effective.
243

McIlvaine, B. "What Time Means to Manufacturing." Managing

Automation (U.S.) (November 1995): 37-40.

Keywords: Time, Scheduling, Quality, Manufacturing.

An interview which reflects on the evolution of manufacturing scheduling,

MRP software tools and Goldratt's TOe. The interview was given by Ken
Sharma, president of the software developer i2 Technologies, based in Texas.
The article promotes the value of quantifying the time value of capacity as a
means of minimising inventory stocks, and concludes that world-class man
ufacturers must seek to provide not only quality products, but products in
creasingly made-to-order and in quick time.
244
McMullen, Mark, Mike C. Patterson and Bob Harmel. "An Application of
the Theory of Constraints in a Small Machine Shop." International Journal
ofManagement Vol. 15, No.4 (1998): 483-489.

Goldratt's TOC is often cited as being a major factor (along with JIT and

TQM) in the rebirth of the competitiveness of the u.s. manufacturing sector.

In this paper, the authors explore the impact of the implementation of the

TOC on the performance of a small manufacturing company.

245

McMullen, Thomas B. "The Systems Industry is giving MRP (and ERP)

ImpIementors a Choice: Traditional or TOC Manufacturing Systems;'

APICS Constraints Management Symposium and Technical Exhibit:

Proceedings (1996): 124-129.

Keywords: Scheduling Software, MRP II

McMullen states the purpose of this paper is to focus the "TOC versus MRP"

and the "finite versus infinite" debates on a constructive outcome; to provide

the basis for agreement on a cost standard; to suggest TOC versions of RCCP,

MRP, and CRP; to highlight the reasons TOC systems are included in MRP II

and ERP systems; to encourage systems vendors to accelerate the pace of pro
viding well integrated TOC functions as co-standard features of MRP II and

ERP systems; to highlight the opportunity for the community of MRP II and

ERP professionals and their clients. The products of software companies

Computer Associates, i2 Technologies, and Systems Software Associates are

discussed.

246

McMullen, Thomas B. Introduction to the Theory of Constraints (TOC)

Management System, Boca Raton, FL: St. Lucie Press/APICS Series on

Constraints Management, 1997.

Keywords: Book, Continuous Improvement

If the answer isn't downsizing, it might be the TOC, says Torn McMullen.
Achieving quantum leaps in business performance requires commitment to
growth and continuous improvement. McMullen presents an excellent intro
duction to the TOC methodology. It's the executive overview, due diligence,
"get your arms around TOC in a single book" volume that's been missing: 230
pages with chapter titles, "What is TOC?" "Where Did it Corne Fromi,' "Why
Do People Say They Like It?," "Who's Used It?," "Where's It Headedi,' and
"How Do I Get Started?" It includes 35 pages of end notes with breezy essays
for perspective and guides for further reference. Highlights include: TOC
logic trees demonstrated with the story line of the movie Mission Impossible
(including detailed transition logic tree for that fast-moving Chunnel train
scene); TOC accounting introduced via questions from Det. Columbo, the
world's longest footnote (No. 45 in Chapter 3) that considers TOC from the
view of a long list of New Age and positive thinking viewpoints; and great
quotes. Whether you already understand TOC as a general-purpose manage
ment science, or haven't yet been introduced to TOC-this book's for you.
Don't miss it! say the publishers. McMullen's book certainly contains an eclec
tic mix of views on TOC, and is a worthwhile addition to the TOC library.
247

McMullen, Thomas B. "TOC Management System for Manufacturers."

APICS-The Performance Advantage Vol. 7, No.4 (1997): 52-56.

Keywords: Accounting, ABC, Manufacturing, Value Analysis

TOC is considered an approach to management of systems from the perspec
tive of a scientific discipline. Economic and management accounting issues

form the basis of this article. The author argues that allocation-based absorp
tion cost accounting, ABC, activity-based management and economic value
added (EVA) systems do not provide all that is necessary for manufacturing

decision-support and financial control. McMullen advocates the concept of

TOC value-added (TVA), defined as "all the monies that the system generates

through sales,"with direct labour being treated as a nonvariable cost. The au
thor lists and discusses a number of claimed advantages of TVA over EVA as

a management system.

248

McMullen, Thomas B. "TOC on Every Vendor Menu: De Facto Systems Co
Standards:' APICS-The Educational Society for Resource Management,

1997.

Keywords: Information Systems, Multimethodology, Scheduling

Excerpted from "The Systems Industry is Giving MRP (and ERP)
Implementers a Choice: Traditional and TOC Systems" presented at the 1996
APICS Constraint Management Symposium. McMullen discusses the evolu
tion from the traditional closed loop MRP to MRP II and ERP. MRP is said to
be still widely available and many companies have been significantly im
proved as a result of its use. MRP II and ERP have many features that are
needed and must be retained even as MRP/ERP systems are replaced by their
constraints based equivalents. Development of systems that include TOC
tools as part of MRP II/ERP are discussed with details of their characteristics.
TOC scheduling systems can and should be used in support of MRP II and
ERP management processes.
249

Miltenburg, J. "Comparing JIT, MRP and TOC, and Embedding TOC into

MRP." International Journal of Production Research Vol. 35, No.4 (1997):

1147-1169.

Keywords: Comparison, Multimethodology, Scheduling

The traditional MRP system for planning and controlling production systems

is being replaced more and more by TIT and TOe. Because TIT and TOC share

many elements with MRP and because MRP is very flexible, it is not difficult to

make MRP behave like TIT or TOe. Consequently manufacturers with MRP

systems need not dismantle them to implement TIT or TOe. A five-step techni
cal procedure for embedding TOC into MRP is presented in this paper along

with an illustrative example from a microelectronics plant. Next a simple pro
duction line is analysed using a Markov chain model to examine the types of

improvements each approach makes and the effect of these improvements on

the performance of the line. Performance measures are the mean and variance

of the output, shortage, inventory level, and cycle time of the production line.

Insights and reasons for the superior performance ofJIT and TOC are provided.

250

Mobbs, Rosy. ''A Controller Learns To Let His People Go." Business Review

Weekly (December 15,1997): 60.


Brian Menzies, partner and manager of Flair International Products, has used

Goldratt's management philosophy to bring about significant changes within

his bathroom cabinet manufacturing business. Menzies moved away from his

autocratic approach, a necessity of the growth of the business. Constraint

management techniques were applied to the business, resulting in a reduction

in lead-time from 39 days down to just three days. This represents a 92% re
duction, the highest reported lead-time reduction from a TOC application in

the furniture manufacturing industry.

251

Mock, Tony. "Radical Ideas or Just a Case of the Emperor's New Clothes?"

Management Accounting (U.K.) Vol. 73, No.9 (1995): 40-41.

Keywords: Critique, Education

Students on university courses and preparing for professional exams are being

introduced to such wonders as "synchronous manufacturing" and "backflush

accounting." While all these techniques may be used regularly by a few read
ers, they may be terms merely seen and occasionally dropped into conversa
tion by others. While one or two of these ideas have improved the informa
tion available to management and contributed to an increase in the
profitability of companies, several are merely established techniques given a
new gloss. It appears that many of the topics that come under the heading of
modern management philosophies and which appear in CIMA (and other)
exam syllabuses, once the veneer is removed there is either nothing under
neath or else one finds an old friend under a new name.
252
Moore, Lila. "Tiger Brand Knits Solid Technology;' Apparel Industry
Magazine Vol. 54, No. 12 (1993): 27-29.
Keywords: Apparel Industry, Application, Manufacturing
A family-owned, Canadian knitwear company, with an annual turnover of
$65 million, has found substantial benefits through implementation of
Synchronous Manufacturing. The company implemented a Synchronous
Manufacturing approach within and between operating divisions. This im
plementation has led to a 50% increase in throughput, and a 50% decrease of
work-in-process inventory, and a five-day quick response cycle on items.
Annual costs have been decreased by $325,000 through the modernisation of
dye operations. New markets are being explored as the company's focus looks
towards a sales driven organisation, setting a target to move into Europe and
Asia within five years. Tiger has a motto: Search out what's new, and be there!
253
Moore, Richard I. "Constraint Management: The Key to Accelerated
Improvement," Air Force]ournal ofLogistics (Fall 1991): 35-36.
Keywords: Continuous Improvement, Multimethodology
As a result of our TQM emphasis, establishing a "process of on-going im
provement" has become a standard phrase in the goals and objectives of al
most every organisation. In our haste to begin we have failed to define clearly
either "improvement" or "process." To improve the system, leaders must iden
tify the weak link in the system and find methods to strengthen it. The extent
that managers focus improvements efforts on system constraints ultimately
determines the degree of system improvement. Focused improvement is in
sharp contrast to the "improve everything" mentality. The approach can be
compared to the difference between laser-guided munitions and carpet
bombing. Targeting makes the difference.
254
Moore, Richard I. and Lisa Scheinkopf. "Theory of Constraints and Lean
Manufacturing: Friends or Foes?" Chesapeake Consulting Inc. (1998): 1-37.
http://www.chesapeak.com/LeanRequest.htrn
Keywords: Performance Improvement, Lean Manufacturing
Toe and Lean Manufacturing are two popular business philosophies that

have received a great deal of attention in recent years. Both philosophies focus

on improvement and advocate techniques to control the flow of material on

the shop floor. Both have demonstrated dramatic results of implementation

-profitability skyrockets, inventories and lead-times are slashed, and opera
tions are drastically simplified. TOe's concept of ongoing improvement by fo
cusing on the constraints may not be as inspiring as the Lean goal of seeking

perfection. However, TOe's constraint focussed approach is both logical and

pragmatic. Lean Manufacturing offers a different approach, that of trimming

organisational fat, by removing waste at every turn. The article compares and

contrasts these two effective approaches to performance improvement.

255

Motwani, J., D. Klein and R. Harowitz. "The Theory of Constraints in

Services: Part I-The Basics." Managing Service Quality (U.K.) Vol. 6, No.

1 (1996): 53-57.

Keywords: Service Organisations, Service Industries

TOe, developed for the manufacturing sector, can also be applied to service
and not-for-profit organisations in order to improve performance. The basic
philosophy of TOe focuses improvements on the weakest link in the organi
sational "chain." The authors describe the five steps to achieving ongoing im
provement using TOe, and suggest ways in which the technique can be
translated for use in the context of the service environment.
256
Motwani, J., D. Klein and R. Harowitz. "The Theory of Constraints in
Services: Part 2-Examples from Health Care." Managing Service Quality
(U.K.) Vol. 6, No 2 (1996): 30-35.
Keywords: Application, Health Care, Scheduling
An application of TOe philosophy in a nonmanufacturing context, continu
ing the discussion initiated in the previous issue of this journal. The authors
offer a model for viewing service organisations as a system based on the
processes involved in the operation of a health-care clinic. The authors use
this as a basis for identifying critical areas for improvement. The article ex
amines the contribution of TOe to nonprofit and service organisations,
focusing on the theoretical implementation of the DBR control technique to

the American Red Cross operation in Florida following Hurricane Andrew
and its actual application in two initiatives at the University of Michigan
Hospital. The authors conclude that the Toe philosophy and techniques de
veloped for manufacturing organisations can be adopted and used success
fully in service operations.
257
Motwani, J. and K. Vogelsang. "The Theory of Constraints in Practice-at
Quality Engineering Inc." Managing Service Quality (U.K.) Vol. 6, No.6
(1996): 43-48.
Keywords: Application, Engineering, Manufacturing
Toe operates on the fact that organisations must always have constraints
(weak links) that limit them from achieving higher performance in terms of
their goals. TOe's five-step focusing process was utilised in an engineering
firm to improve the overall productivity of its survey department. The paper
describes the five-step process: identify the system's constraints; decide how to
exploit the system's constraints; subordinate everything else to that decision;
elevate the system's constraints; and, if a constraint has been broken by eleva
tion, go back to the first step. The authors give a brief description of the case
study company, a u.s. engineering firm OMM Engineering, and discusses the
application of TOe, illustrating how the five-step focusing process can be used
to eliminate and elevate a constraint or bottleneck within an organisation.
258
Murphy, Robert E. "Breakthrough Performance in the Semiconductor
Industry." APICS Constraints Management Symposium and Technical
Keywords: Application, Harris Semiconductors
An application of Toe at Harris Semiconductor's plant at Mountaintop, PA,
is detailed in this article. The management at the plant regard Toe as a criti
cal means to achieve parity with competition in product cost, quality and dis
tribution. The author outlines the changes that occurred at the plant,
examining how Goldratt's three basic questions (what to change, what to
change to, and how to change) were answered. The results of the implemen
tation are related in the form of quantified operational and financial data. The
success of the Toe implementation at the plant has encouraged senior man
agement to apply the methodology to other Harris Semiconductor plants. For
a more in-depth analysis see Leading The Way to Competitive Excellence,
William A. Levinson, Ed. (209).
259
Murphy, Robert and William Levinson. "Full Speed, Straight Ahead?: A
New Look At Constraints Management Challenges Traditional Production
Policies." Manufacturing Systems (November 1995): 41-46.
Keywords: Application, Manufacturing, Scheduling, Semiconductor Industry
An outline of the principles ofTOC, and discussion about a TOC application
at a manufacturing facility. The authors present a thorough description of the
TOC manufacturing philosophy, and include some discussion of the TOC ap
proach to management accounting. A Herbie-type diagram is included to
help relate the influence of the constraint on the output of the production
plant. An introduction to the Harris Semiconductor application is included.
In the past, attempts to run the plant at near capacity merely increased inven
tory, increased lead times and reduced on-time deliveries. Management
needed to change its practices in order to become competitive. Constraint
management was applied and attitudes began to change. All manufacturing
employees now receive a four-hour training session in constraint manage
ment. DBR was applied to the production scheduling. Many of the standard
TOC methodologies were applied at Harris Corporation. The impressive re
sults of the application are outlined.
260

Murphy, Robert, Puneet Saxena and William Levinson. "Use OEE: Don't Let

OEE Use You;' Semiconductor International Vol. 19, No. 10 (1996):

125-132.

Keywords: Equipment Effectiveness, Manufacturing

Overall equipment effectiveness (OEE) is defined in terms of its four compo
nents: availability: operating efficiency: rate efficiency, and rate of quality.
These four major components highlight the six major losses that limit equip
ment effectiveness in any factory: breakdown losses, set-up and adjustment
losses, minor stoppage losses, operating speed losses, quality defect and re
work losses, and yield losses. However, it is not necessary to obtain 100% OEE
for every piece of equipment. Instead, attention should be focused on the con
straint or bottleneck operation. TOC is used to explain why, and the DBR
technique is used to explain how.
261

Netherton, Janice. "Banishing Bottlenecks;' New Zealand Business Vol. 9,

No. 11 (1995/96): 22-26.

Keywords: Accounting, Manufacturing, Scheduling

A general introductory article discussing the work of Goldratt, The Goal, TOC
and its benefits. The author states New Zealand manufacturers who are using
the philosophy keep the secrets revealed in The Goal close to their chests, re
luctant to divulge to competitors the reasons for their dramatically shortened
lead-times, their slashed inventories, and their ability to move fast and deliver
quickly while keeping their quality standards at the highest levels. TOC ap
proaches to management accounting and problem structuring are addressed,
along with a general discussion on the impact of system constraints.
262
Newbold, Robert C. Project Management in the Fast Lane: Applying the
Theory of Constraints. Boca Raton, FL: St. Lucie Press/APICS Series on
Keywords: Book Project Management
Project Management in the FastLane is aimed at project managers and anyone
else with an interest in TOe. It includes a detailed analysis of common prob
lems that cause projects to be late, over budget and under performance. It
then shows how TOC tools can be applied to achieve effective breakthrough
solutions in virtually any environment. The book has a detailed description of
Goldratt's Critical Chain scheduling approach, which is a powerful means of
dealing with various forms of uncertainty in project planning. Critical Chain
scheduling is probably the most significant development in project schedul
ing in the last 30 years. Application ofTOC to many other common problems
is described. This book is sure to help project managers rethink their man
agement approach and create dramatic improvements.
263
Noreen, Eric, Debra A. Smith, and James T. Mackey. The Theory of
Constraints and its Implications for Management Accounting, edited by
Clare Barth. First Edition. Great Barrington, MA: North River Press, 1995.
Keywords: Accounting, Applications, Book, Thinking Processes
This book provides a comprehensive analysis of the TOC approach to man
agement accounting. This important work was independently produced, and
sponsored by The Institute of Management Accountants (USA) and Price
Waterhouse (Paris, France). The similarities and differences between
Throughput and Cost Accounting are outlined. The TOC arguments against
ABC and cost accounting are discussed. Definitions for the various TOC ac
counting labels are provided. The book also reports on research conducted by
the authors who examined 21 companies that had applied components of the
TOC philosophy. The body of the work is dedicated to explaining the perfor
mance changes that resulted from the application ofTOC. An appendix pro
vides a comprehensive outline of the TOC Thinking Processes, complete with
a worked example drawing from the wisdom of Solomon.
264
O'Dea, Katherine and Gregg Freeman. "Logistics Engineering and
Constraint Management: A Common Sense Approach To Environment
Performance Improvement." Logistics Spectrum Vol. 29, No.1 (1995):
46-51.
Keywords: Application, Multimethodology
With increasing regulatory demands, organisations must pay homage to na
ture as well as concentrating on making profits. TQM programs are used
widely in total quality environmental management (TQEM), but not every
one is finding success in these methods. Constraint management is seen as a
complement to a logistics approach to continuous improvement by strength
ening the weakest link. Two sets of guiding principles are discussed; the SFS
and the improvement process itself. The Xerox Corporation is presented as an
example of an organisation that is successfully implementing constraint man
agement to improve their environmental performance standing.
265

Olhager, Jan and Bjorn Ostlund. "An Integrated Push-Pull Manufacturing

Strategy:' European Journal of Operational Research Vol. 45 (1990):

135-142.

Keywords: Application, Scheduling

The recent interest in Japanese manufacturing techniques includes the ac
knowledgement of demand "pull" strategy as an alternative to more tradi
tional production "push" practices. In many cases, the pull approach includes
a simple shop floor information system such as the Kanban system. The idea
of simplicity has been emphasised in many manufacturing firms and is then
often linked to a pull system. However, a pull strategy is not necessarily ap
plicable to all manufacturing environments. This paper discusses push and
pull systems and how these approaches can be combined in an integrated
push-pull manufacturing strategy. A case study in a semirepetitive, make-to
order environment illustrates some potential benefits from such an integrated
approach. The major issue is the linking of the manufacturing strategy to the
business strategy by changing the manufacturing planning and control focus.
This has resulted in improved competitiveness primarily in terms of delivery
dependability and production flexibility.
266
Olson, Christopher T."The Theory of Constraints: Application to a Service
Firm." Production and Inventory Management Journal Vol. 39, No. 2
(1998): 55-59.
Keywords: Application, Process Controls, Security Services
American Security and Alarm Company, Lubbock, TX, has been in operation
since 1978. Sales of burglar alarms are made through an on -site survey of the
property, consultation with the prospect on his or her needs and goals and, fi
nally, a recommendation accompanied by a bid. Included in the bid is an es
timate of how long from the date of acceptance the alarm will be installed and
completed. Once the sale is completed, immediate actions are taken to insure
prompt delivery of a high-quality product. Both the installation and the syn
chronous manufacturing process are presented.
267
Onwubolu, G. c., W. Haupt, G. De Clercq and J. Visser. "Production
Management Issues in Developing Nations;' Production Planning and
Control Vol. 10, No.2 (1999): 110-117.
Keywords: Developing Nations, Multimethodology
Globalisation has diluted the disparity between production management is
sues in developed and developing countries. However, pronounced differ
ences between production management in the first and third worlds still exist.
This paper points out both common issues and issues only detectable in de
veloping countries. Global competition has affected the way organisations
now do their business. The customer is now the focus of all businesses.
Businesses which enter global markets take these elements of value seriously.
Production and operations management is an important activity in the value
chain and helps to position a firm in the value chain system. This paper ex
amines the role the following activities play in production management in de
veloping countries: value chain management; lead-time compression;
appropriate technology manufacturing systems; quality issues; TOC; supply
chain and distribution management; contract design, manufacturing, and
marketing; concurrent engineering; configuration management and change
management. This paper concludes that production in developing countries
is challenging and exciting.
268

Osten, Sam and Mike Patterson. ''A Theory of Constraints Fable: Part I;'

Industrial Management (March/April 1996): 16-21.


Osten and Patterson have adopted the Socratic method to relate their views of
applying TOC to a production plant that is near collapse. The protagonist in
this short story is in a similar position to Alex Rogo, but instead of being a
plant manager he is applying for the job of plant manager. In this instance our
hero has already been trained in TOC, so the Jonah role is not needed. The job
applicants examine the plant, the process flow and times for each stage of pro
duction. In order to get the job of plant manager, the main character has to
present a business plan to the corporate heavyweights at the head office. The
story details our hero's efforts to formulate a plan to save the factory by using
the tried-and-tested TOC methodologies. To find out what happens next,
read Part 2, referenced below.
269

Osten, Sam and Mike Patterson. "A Theory of Constraints Fable: Part 2."

Industrial Management (May/June 1996): 4-7.


As the title suggests, this is Part 2 of our industrial drama where our heroic job
applicant is set to save the world from the evils of conventional cost account
ing and local optima production schedules. The Lego process simulation is
continually modified, in a process of continued improvement, until the num
bers come out right. A predictable ending sees our hero get the job over a well
educated (but ignorant of TOC) relative of a company executive who
submitted a business rescue plan based on conventional cost accounting. Our
hero and TOC prevail while nepotism fails. The application ofTOC in this in
stance returned a monthly profit of $25,000 for the plant. Mechanisms used
include the TOC product mix algorithm, DBR production scheduling, and we
assume the 5FS of continuous improvement.
270

Overall, Karl and Ken Papp. "What Do You Expect?" APICS Constraints

Management Symposium and Technical Exhibit: Proceedings, Phoenix,

Arizona, USA (April 26-28, 1995): 97-106.

Keywords: Application, Distribution, Manufacturing, Measurement Systems

The application of TOC to the Avery Dennison Corporation, an international
marketer, distributor, and manufacturer of labels, labelling, systems, pressure
sensitive materials, and office products. The authors outline the background of
the organisation in terms of its use of management paradigms. The application
ofTOC is outlined, detailing the changes made and the new measurement sys
tem adopted. The process of identifying the changes to make, the means of im
plementing those changes, and the challenges encountered by those applying
TOC at Avery Dennison are described. Finally, the benefits derived from the
application are outlined, along with future steps the organisation plans to take.
271
Parr, John B. "Constraint Management and Activity-Based Costing: Does
Cost Allocation Make Sense?" APICS Australasian Region 4th Conference
Proceedings, Melbourne November 6-8,1991.
Keywords: Accounting, Activity-Based Costing, Product Mix
Parr's article examines the TOC arguments against cost and ABC accounting,
and puts forward the alternative TOC approach. The basic concepts behind
TOC are outlined, along with several of the TOC accounting techniques. The
validity of the assumptions of ABC are examined: Firstly, the assumption that
we determine product prices based on the knowledge of their costs; and sec
ondly, assuming that in order to decentralise decision making in the organi
sation we should provide allocated cost information to operating managers in
order to guide their decision making. A products mix example is calculated
first using ABC, then the TOC product mix algorithm; TOC produces the bet
ter result.
272
Patterson, Mike. "The Product Mix Decision: A Comparison of Theory of
Constraints and Labour Based Management Accounting." Production and
Keywords: Accounting, Product Mix, Linear Programming
The purpose of this article is to compare how three different approaches
would solve a product-mix problem. The traditional management accounting
approach, which employs marginal analysis, is considered first of all. Next a
linear programming approach is taken. The data is formatted into a typical LP
and a result given. In this instance the LP result was far superior to the cost ac
counting approach as the products with the highest margins were dispropor
tionately heavy constraint users. TOC is outlined, including the TOC
approach to the product-mix problem. The throughput-per-constraint
minute method is detailed and applied. This algorithm resulted in a solution
which gave a very different result to the cost accounting approach, with a far
superior financial gain achieved. The result was also superior to the LP result;
however in this instance there was only about a 5% difference.
273
Paulson, Albert S. and Katherine J. Silvester. "A Rebuttal To The Five
Myths." Management Accounting (U.S.) Vol. 72, No.9 (1994): 8-9.
Keywords: Accounting, Product Cost, Reply
This is a reply to Germain Boer's article, "Five Modern Management
Accounting Myths." The first "myth" the authors discuss is the statement by
Boer that labour costs have been relatively significant in the past and that the
decrease, proportionally to the increase in overhead costs, has been steady
over the past 150 years. Paulson and Silvester argue, with data, that the change
in proportions has been dramatic and recent rather than a slow steady in
crease. The next issue debated is that of product cost and its influence over
pricing. Boer has argued that cost did not really influence price and put for
ward data to prove the lack of correlation. Paulson and Silvester disagree and
state that the data Boer used covered only a short period and therefore flawed
conclusions were reached. Paulson and Silvester claim that a simple linear re
lationship between cost and price does not usually exist over time or at a sin
gle point in time.
274
Peach, Bryce. "The Use of the Theory of Constraints Thinking Processes at
Courtaulds Coatings NZ." Technology for Manufacturing; Integrating
Manufacturing Research with Industry's Needs, Vol. 2 of Proceedings of the
Technology for Manufacturing Conference, Massey University, Palmerston
North, New Zealand (February 1996): 383-396.
Keywords: Application, Manufacturing, Thinking Processes
TOC is applied to a paint and coatings manufacturer. The TOC Thinking
Processes were first introduced to Courtaulds Coatings NZ in January 1996,
where they were primarily adopted by the industrial production division.
Issues discussed in this article include use of the TOC Current Reality Tree as
an invaluable aid to identify core problems. The use of Evaporating Cloud
technique focused efforts to structure win-win solutions without halfhearted
compromises, as identifying strategies to eliminate the core problems. The
5FS were used to implement the changes. A final analysis includes a semi
quantitative look at how the TOC has impacted on sales, productivity, opera
tional expenses, inventory, quality, and cash-flow. Sales doubled, direct labour
costs halved, and inventory turnover continued at the same rate. The morale
of staff at the plant is said to have improved considerably with staff more in
clined to make useful suggestions.
275
Peltu, M. "People Who Like People (BPR);' Computing (U.K.) (November
1995): 40.
Keywords: Application, BPR, Civil Engineering, Soft Systems Methodology
A civil engineering company, Balfour Beatty, adopted Goldratt's thinking
process method to help it tackle people problems first and systems issues sec
ond, in its business process reengineering programme. The article outlines the
principles proposed in Goldratt's two books The Goal and It's Not Luck and
explains how the methodology shifts the emphasis of the project away from
the traditional cost-accounting basis to one based on an overall corporate
goal. The author shows how the company used a series of logic trees tracing
cause-effect chains. Role activity diagrams were used to encourage managers
to think systematically about the roles played by various groups and individ
uals in the business processes.
276

Perez, Jose Luis. "TOC for World Class Global Supply Chain Management,"

Computers and Industrial Engineering Vol. 33, No. 1-2 (1997): 289-293.

Keywords: Inventory Management, Supply Chain

Managing a global supply chain poses some unique challenges. TOC, a suc
cessful solution of the 1980s for the factory, can focus management into
achieving supply chain goals. The way in which TOC-based operational poli
cies are generated for the different links in a supply chain is explained. The way
in which implementation of these policies orchestrates the performance of the
supply chain to optimise delivery, responsiveness, and cost is demonstrated.
277
Petty, Nicola. "TOC-Religion or Management Tool!" Operational
Research Society ofNew Zealand: Newsletter (December 1997): 6-7.
Keywords: Critical Comment
This is an emotive response to the TOC presentations at the APORS '97
Conference. "Snake oil merchants plied their trade in the American frontier
towns, selling bottles of some unknown substance which they extolled as the
cure for whatever ails you. As a form of entertainment they had undoubted
value, but whether the product achieved more than a placebo effect is ques
tionable. As I sat through a tutorial on TOC, I felt more and more uneasy and
wondered if the presenter was, in fact, a snake oil merchant," the author
writes.
278
Phillips, Belinda. "Hitting the Bottleneck;' Health Management (February
1999): 16-17.
Keywords: Application, Health Sector
The author discusses the implementation of TOC in order to reduce waiting
lists in National Health Systems. It is argued that having a core group of man
agement involved in the implementation stage is more likely to succeed. TOC
did provide benefits and is not an expensive management tool.
279
Pinedo, Michael. "Commentary on 'An Exposition of Multiple Constraint
Scheduling as Implemented in The Goal System;' Production and
Operations Management Society Vol. 6, No.1 (1997): 25-27.
Keywords: Reply, Scheduling
This is a reply to Jacob v. Simons Jr. and Wendall P. Simpson III. "An
Exposition of Multiple Constraint Scheduling as Implemented in The Goal
System (Formerly Disaster?")", Production and Operations Management, Vol.
6, No.1, 1997: 3-22. Pinedo praises the descriptive and analytical work on the
procedures behind multiple constraint scheduling. However, two issues are
raised: firstly, the lack of depth in the comparisons of different software
scheduling systems, and lack of formality in the comparison; and secondly, a
number of unresolved issues concerning Goldratt's approach to scheduling.
The author concludes that the Simons and Simpson article is of value and
opens up a forum for discussion and new directions in research.
280

Plantz, Bruce. "Custom Kitchens in 10 Days;' Furniture Design and

Manufacturing, October, 1991.


281

Plenert, Gerhard. "Optimising Theory of Constraints When Multiple

Constrained Resources Exist." European Journal of Operational Research.

No. 70 (1993): 126-133.

Keywords: Linear Programming, Product Mix

R. E. Fox offered a procedure for the calculation of optimal product mix, re
ferred to by many authors as the TOC product mix algorithm. This article at
tempts to demonstrate that the TOC procedure is inefficient when multiple
constrained resources exist. The Fox model is based on a point-in-time eval
uation. Plenert claims linear-integer programming is a much better planning
tool and comes closer to achieving the TOC goal of maximising throughput.
A comparison is drawn between the two approaches, when applied to a com
paratively simple production process. Later, Plenert outlines an application of
the two methodologies to more complex manufacturing situations, which
contain multiple constrained resources. Plenert claims multiple constrained
resources occur quite regularly in process manufacturing or in discrete flow
manufacturing plants that use assembly plants or TIT lines.
282
Plenert, Gerhard and Terry Nels Lee. "Optimising Theory of Constraints
When New Product Alternatives Exist." Production and Inventory
Keywords: Linear Programming, Product Mix
The TOC approach to product mix decisions is outlined and includes a
worked example of the procedure. An Integer Linear Programming approach
is applied to the same scenario. Both the TOC and LP approaches yield the
same recommended product mix and consequently the same throughput.
The authors next consider the situation where management has to choose be
tween manufacturing one of two new products, which would be competing
for the same market ifboth were produced. They consider the LP approach to
be superior because it evaluates trade-offs and keeps the constrained resource
working at a near capacity level. The authors note that the time period used
in the scenario is significant as longer time periods will reduce any variability
between the two approaches, and over a longer time period the proper appli
cation of TOC would approach the optimal mix attained by the LF.
283
Plenert, Gerhard. "Which Is The Critical Choice?" APICS Online Edition
Vol. 6, No. 7 (1996): http://www.lionhrtpub.com/apics/apics-7-96/
plenert.html
Keywords: Comparison, Manufacturing, Multimethodology
Plenert presents a timeline of the development of inventory management sys
tems, including EOQ, MRP, TIT, and TOC/OPT. An evaluation and recom
mendation of which methodology manufacturers should apply is based on
which resources, materials, labour, or machinery, are most critical to the com
pany. This is determined through the analysis of the value-added component
of the manufacturing process. MRP systems are still most common despite
labour often being the least critical resource. The author claims manufactur
ing management is becoming more critical and new systems or combinations
of existing systems will be needed.
284
Posnack, Alan J. "Theory of Constraints: Improper Applications Yield
Improper Conclusions." Production and Inventory Management Journal
Vol. 35, No.1 (1994): 85-86.
Keywords: Linear Programming, Product Mix, Reply
This is a reply to the Plenert and Lee article titled "Optimising Theory of
Constraints When New Product Alternatives Exist" (282). Posnack states that
Plenert and Lee did not correctly apply the methods of TOC in their paper
and as a result arrived at improper conclusions. Posnack's argument is based
around the use of Linear Integer Programming which was justified because a
fractional unit of production is not completed. Posnack states a noninteger
solution would see the Toe solution give a better result than the linear pro
gramming approach. More importantly assessing just one aspect of Toe does
not do the philosophy justice. Posnack mentions the benefits of exploiting the
constraint, something that a pure LP approach does not mention.
285
Posnack, Alan J. "Protective Capacity: An AlI-Too-Secret Competitive
Weapon" APICS Constraints Management Symposium and Technical
Keywords: Manufacturing, Protective Capacity, Time-Based Competition
Posnack discusses the rapidly changing environment managers now face, ar
guing that organisations must now become time-based competitors. The
forces that exist within a production plant, such as dependent events and sta
tistical fluctuation, are discussed. The conflict between build-up of WIP in
ventory and meeting production objectives is discussed. The author presents
a conflict resolution diagram to relate what he refers to as the competitive
edge conflict. DBR scheduling and plant capacity are also discussed. This dis
cussion is tied into an argument for the use of protective capacity as a means
of gaining an advantage in time-based competition.
286
Ptak, Carol A. "MRT, MRP II, OPT, ]IT, and CIM-Secession, Evolution, or
Necessary Combination?" Production and Inventory Management Journal
Vol. 32, No.2 (1991): 7-11.
Keywords: MRP, MRP II, OPT, fIT, Multimethodology
The basic features of these five manufacturing planning and control tech
niques are outlined. The article examines the necessary coexistence, as op
posed to single usefulness, of these concepts. Ptak argues that the future
success of manufacturing cannot depend upon only one of the methodologies

and no single company's solution will solve other companies' problems.
287
Ptak, CarolA. "Performance Measures;' APICS-Constraints Management
Keywords: Performance Measures
"What gets measured gets improved." This common theme is embraced by
many organisations, and the author questions if appropriate measurements
are being used. Effective performance measures encourage the thought
process, extend capabilities, and provide feedback about the progress toward
the organisation's objectives. Measures such as T, I, & OE provide a common
framework from which everyone can work. Understanding the process is the
key to establishing good measures.
288
Pujadas, W. and F. Frank Chen. ''A Reliability-Centred Maintenance
Strategy for a Discrete Part Manufacturing Facility." Computers and
Engineering Magazine Vol. 31, No. 1-2 (1996): 241-244.
Keywords: Preventative Maintenance, Nonmanufacturing
A TOC-aligned maintenance decision support system is presented. The arti
cle begins by discussing the changes in maintenance practices over time. The
need for quantitative performance measures is discussed along with the
changing manufacturing environments that now exist. The relevance of the
maintenance schedule to applications of TOC is that the schedule suggested
by the authors is applied within a TOC framework. The authors do not state
exactly what they mean by this, so the reader is left to speculate that the sys
tem constraints, which would benefit the system as a whole from their in
creased reliability, are the focus of the maintenance effort, thus exploiting the
constraint. The authors state that ultimately the new maintenance strategy
contributes to a higher quality product manufactured at a significantly lower
cost. Results of field tests are reviewed.
289

Raban, S. and R. N. Nagel. "Constraint-Based Control of Flexible Flow

Lines;' International Journal of Production Research Vol. 29 (1991):

1941-1951.

Keywords: Multimethodology, Scheduling

An important framework for controlling a manufacturing system is pre
sented. Within this framework we developed the constraint-based method of
controlling a flexible flow line. Constraint-based control (CBC) combines the

powerful TOC with advantages using the hierarchical control algorithm and
adds mathematical rigour to TOe.
290
Radovilsky, Zinovy. "Estimating the Size of the Time Buffer in the Theory
of Constraints: Implications for Management." International Journal of
Keywords: Buffer Management, Buffer Size, OR/MS
Radovilsky uses queuing theory methods to solve an operations management
problem. A brief introduction to TOC is given, along with mention of the im
portance of pre constraint buffers. The problem of identifying the optimal
buffer size to protect the capacity constrained resource is approached via
queuing theory rather than by the BM method proposed by Goldratt.
Radovilsky proposes an alternative approach based on Queuing Theory.
Simple formulae to calculate the probability that a constraint will fall idle are
presented, along with formulae for calculating the optimal buffer size. The au
thor carries this further by including a throughput calculation based on this
optimal buffer size. It is concluded that the proposed formulae enable a man
ager to build the time buffer on the basis of a scientific estimate rather than
by trial and error, which may take many months to complete.
291
Rahman, Sharns-ur, "Theory of Constraints: A Review of the Philosophy
and its Applications:' International Journal of Operations and Production
Keywords: Critique ofLiterature, Literature Review
A review of TOC literature reveals that a vast majority of papers have con
centrated on the concept and its enhancement. The survey also reveals that
some have compared the concept with others such as materials requirements
planning and JIT and that articles published are fairly distributed between
TOC philosophy and its applications, with literature evaluating applications
numbering very few.
292
Ramsay, Martin 1., Steve Brown and Kambiz Tabibzadah. "Push, Pull, and
Squeeze Shop Floor Control With Computer Simulation." Industrial
Engineering (February 1990): 39-45.
Keywords: Comparison, Manufacturing, Scheduling, Simulation
The methodology and findings of a production simulation model used to

compare the performance of JIT, TOe, and MRP are presented. The title of
the paper comes from a description of each approach in terms of the way in
which each moves inventory into and through the production process. MRP
is a push system, JIT a pull and Toe a squeeze approach. The body of the ar
ticle is concerned with describing the workings of the model and covers such
variables as set-up times, buffer size/placement, and rules within which the
process must conform. Rules specific to each approach are detailed. It is stated
that the Toe "squeeze" approach maximised the production output and that
Toe is the most useful of the three approaches. The authors note that JIT and
MRP do not pay attention to the constraining resource of the system.
293

Raviv, A. "Optimal Staffing in Semiconductor Manufacturing-A Queuing

Theory Approach." Solid State Technology Vol. 41, No.4 (1998): 77.

Keywords: Manufacturing, Semiconductor Industry.

Equipment costs comprise more than 70% of the capital investment budget of
a new semiconductor manufacturing or test and assembly facility. Obviously,
equipment use must be one of management's primary concerns. Proper
staffing of equipment operators and maintenance technicians is complex, yet
it plays a major role in equipment utilisation and throughput. The classic ap
proach to manufacturing staffing is somewhat arbitrary and ad-hoc. This
paper presents a more scientific and proactive approach, based on the Toe
and designed with the objective of improving fab throughput. The models de
scribed are based on established industrial engineering principles, and have
been adopted by management teams in scores of fabs and test sites world wide.
294
Reimer, Glenn. "Material Requirements Planning and Theory of
Constraints: Can They Coexist? A Case Study!' Production and Inventory
Management journal (Fourth Quarter 1991): 48-52.
The Valmont Industries case study: An existing MRP II system was causing
several problems. The need to expedite orders was common, rescheduling was
often necessary, large work in process inventories and long lead times existed.
The article outlines the MRP II system and discusses how management went
about implementing TOe. DBR is outlined, along with a modified MRP sys
tem fitted into a TOe framework. The article details the scheduling approach
and buffer management used at the plant. The author concludes that Toe
and a modified MRP system can coexist, and the results of this application
prove this point. Due-date performance improved by 20%, delays were re
duced, work in process inventory was dramatically reduced, reject parts
dropped from 15% to 2%, earnings increased by 600% over a four-year pe
riod, and inventory turns increased from five to nine times in four years.
295
Rezaee, Zabihollah. "Synchronous Manufacturing: The Measure of
Excellence." CMA: The Management Accounting Magazine Vol. 66, No.7
(1992): 21.
SM assists management to determine the impact of proper inventory plan
ning and controlling methods as well as the utilisation of advanced manufac
turing techniques on productivity. The article addresses the impact of SM on
resource management and operational measures. The implementation of the
methodology is presented in the form of four steps: goal identification, utilis
ing proper performance measures, improving the performance of the entire
system, and undertaking managerial actions to move the organisation toward
its goal. SM techniques enable management to examine the link between de
cisions, actions, and bottom-line profitability.
296

Rezaee, Zabihollah and R.c. Ehnore. "Synchronous Manufacturing:

Putting the Goal to Work;' Journal of Cost Management (U.S.)

(March/April 1997): 6-16.

The objectives of SM are described as maximisation of throughput, minimi
sation of inventory, and control of operating expenses, with the aim of max
imising shareholders' return on investment. SM is compared with MRP II and
JIT systems, its relationship with Toe is assessed. Traditional management
accounting techniques are criticised (using examples) and contrasted with the
SM approach which treats material as (they claim) the only variable cost, does
not allocate overhead, sees inventory as a liability and uses performance mea
sures which promote efficient resource utilisation and customer satisfaction.
The authors explain how SM affects the approach to investment decisions and
market constraints and lists the advantages claimed by some of its major
users. The paper discusses the six steps involved in implementing an SM sys
tem: defining goals, establishing a team, choosing performance measures,
evaluatinglimproving performance, managing material flow, and undertak
ing proper managerial actions.

297

Roadman, Charles, H., James M. Benge, Lloyd P. McGinnis, Theodore P.

Yurkosky, David V. Adams, Glenn C. Cockerham and Steven H. Flowers.

"Theory of Constraints and the United States Air Force Medical Service;'

APICS Constraints Management Symposium and Technical Exhibit;

Proceedings, Phoenix, AZ (April 26-28, 1995): 107-115.

Keywords: Application, Health Care, Military, Thinking Processes

The application of TOC to a military health care facility was required to im
prove the efficiency of their old processes of management, as necessitated by
environmental change. The article details the use of the TOC Thinking
Processes to address the performance issues that were evident. The various
undesirable effects identified are presented for certain divisions of the med
ical service, along with an analysis of each division that implemented the
methodology. An evaluation of the tools of the Thinking Processes is pre
sented, along with conclusions about the value of applying TOC in their
organisation.
298
Roberts, Joseph and Daniel Tretter. "Competing with Crayolas:
Manufacturing as a Competitive Weapon at Binney and Smith;' National
Productivity Review Vol. 12, No.2 (1993): 183-191.
Binney and Smith (manufacturer of the Crayola brand) was given the chal
lenge to improve responsiveness and speed of delivery to its customers. The
company began to look internally at what could be done to reduce lead times,
increase flexibility, and improve customer service. Since manufacturing capa
bility was greater than that of overall sales, theoretically the company should
have been able to ship 100% on time, as requested by the customer. What got
in the way was the lead time that it took to get something through the pro
duction pipeline, the responsiveness, and the ability to change schedules. One
part of the solution to the problem was to form teams in manufacturing.
Focusing on the customer has been the key to the company's success. The re
sults have been double-digit growth during a very difficult business cycle.
Focusing on the customer is a step in the process of ongoing improvement,
and the first step is knowing the goal.
299

Rodrigues, Luis H. and John R. Mackness. "Teaching the Meaning of

Manufacturing Synchronisation Using Simple Simulation Models."

International Journal of Operations and Production Management Vol. 18,

No.3 (1998): 246-260.

Keywords: Scheduling, Simulation, Education

Visual interactive simulation models (VIS) can be effectively used in teaching
manufacturing synchronisation. This type of model can interactively and vi
sually present three synchronisation models, including the Just-in-Case (JIC),
JIT and TOe. The simulation models are useful in choosing the best syn
chronisation approach for a particular problem. A perfectly synchronised
manufacturing system is the process where components arrive at the work
centres in time for their production, so that excessive in-process stocks do not
build up causing delays to orders, inventory costs are minimised and cus
tomer service is improved by delivering orders on time, creating a possible
competitive edge. This article focuses on manufacturing synchronisation as a
way to guide companies in this journey to excellence, proposing a simple ap
proach to explain this concept and helping them in the selection of the most
appropriate synchronisation approach via visual interactive simulation
models. This approach has been used in Brazil for academic and practical
purposes.
300
Roehm, Harper A., Donald J. Klein and Joseph F. Castellano. "Springing to
World-Class Manufacturing." Management Accounting (U.S.) Vol. 72, No.9
(1991): 40-44.
Keywords: Application, Culture, Manufacturing, Scheduling
The experience of Grand Rapids Spring and Wire Company (GRSW)
illustrates how a small, traditional manufacturing firm created the culture
and trust with its employees necessary for its successful conversion to a
world-class manufacturing (WCM) operation. A facilitator was hired to
provide leadership and direction. Employee meetings were held to identify
the root problems, or constraints, of the company. Five major constraints
were identified, and employees and management worked together to
solve these problems. For example, a new procedure was developed for track
ing material failures at the suggestion of the employees. From the initial
commitment to move toward a WCM environment, GRSW management has
attempted to communicate fully with employees and listen to their sugges
tions. The firm's commitment to employee training and involvement helped

to create a culture at GRSW that supported the physical and production
changes.
301

Roehm, Harper A., Donald Klein and Joseph Castellano. "Blending Quality

Theories For Continuous Improvement:' Management Accounting (U.S.)

(February 1995): 26-32.

Keywords: Accounting, Multimethodology, Quality

The multimethodology approach taken at GRSW is outlined. GRSW blended
the philosophies of dominant management theorists such as Deming,
Goldratt, Juran, Schonberger, and Suzuki to create a new internal quality cul
ture. A Jonah consultant was employed to educate staff on the principles of
TOC via The Goal. Kiyoshi Suzuki was also consulted, and the company
adopted his philosophies of internal supplier and internal customer.
Minicompanies within the organisation were formed. Vision and missions
were established for each minicompany. Goals and quality specifications were
incorporated within the vision and mission statements. The TOC accounting
model was applied to the company, and other TOC techniques were applied
to each mini company. The Deming "Plan, Do, Check, Act" philosophy was
adopted. The article concludes by stating that a quality culture was established
within the organisation which would give the company a sustainable compet
itive advantage.
302
Ronen, Boaz and Yoram Eden. "Service Organisation Costing: A
Synchronised Manufacturing Approach." Industrial Management
(September/October 1990): 24-26.
Keywords: Accounting, Costing, Nonmanufacturing, Product Mix
Management accounting issues are discussed, and the TOC approach pre
sented as an alternative to traditional cost accounting. The irrelevance of di
rect labour as a cost driver is mentioned and many of the basic philosophies
of the TOC paradigm are outlined for the reader. The authors provide a
unique explanation of the impact of a constraint on a manufacturing organ
isation by claiming that the sale of a product as actually the sale of bottleneck
time. Two examples are presented to relate the concepts promoted by the au
thors: firstly, that a form of cost allocation be used, based on the system's con
straints; and secondly, a form of the TOC product-mix algorithm is proposed
as a means of identifying which services to offer in order to maximise profits.

The example used is one of the few nonmanufacturing examples of the TOC
product-mix approach.
303
Ronen, Boaz, Ron Gur and Shimeon Pass. "Focused Management in
Military Organisations: An Avenue for Future Industrial Engineering;'
Computers and Engineering Vol. 27, No. 1-4 (1994): 543-544.
Keywords: Application, Aviation, Focused Management, Military
This paper demonstrates the effectiveness of a multimethodology approach
which the authors call Focused Management. The applications involve Israeli
military units. The first case involves an Israeli Air Force Squadron which had
a problem with an imbalance between ready aircraft and available pilots.
TOe's DBR was applied to the scheduling problem. The drum was identified
as the number of planned missions. Throughput was defined as completed
missions. The buffer was extra scheduled aircraft and extra pilots. The rope
was defined as scheduling the aircraft and pilots to the various missions. The
results of the DBR application included a 15% increase in aircraft utilisation,
and a doubling of aircraft maintenance activities completed per day. The au
thors also discuss a logistics measurement application case. It is concluded
that techniques designed for industrial use are applicable to mission oriented,
nonprofit environments.
304
Ronen, Boaz and Shimeon Pass. "Focused Management: A Business
Oriented Approach To Total Quality Management." Industrial
Management (May/June 1994): 9-12.
Keywords: Continuous Improvement, FocusedManagement, Multimethodology
The implementation ofTQM within a TOC framework can focus the benefits
ofTQM, ensuring goal oriented results in a more timely manner. The authors
provide explanation of the principles of TQM and the benefits to be accrued
by organisations from its implementation. Focused management is also de
fined in relation to TQM. TOC is introduced and its basic principles ex
plained. TIT, Global Performance Measures and the Complete Kit are also
outlined. A combined implementation of these contemporary methodologies
is promoted and termed Focused Management. The benefits of this approach,
which is said to have been applied to over 40 organisations, include: improved
throughput 10-40%, reduction of lead-times by approximately 50%, and
reduction in quality nonconformance by nearly 50%.
305
Ronen, Boaz and Shimeon Pass. "Manufacturing Management
Information Systems Require Simplification:' Industrial Engineering
(February 1992): 50-53.
Keywords: Information Systems, Manufacturing
Many manufacturing information systems are unsuitable for manufacturing
environments as they were developed for financial applications.
Manufacturing data is said to be more difficult to manage than financial data
because of the issues of volume and speed. A list of differences between fi
nancial and manufacturing information systems is outlined by the authors.
The body of the article discusses the appropriateness of information systems
in light of the modern manufacturing environment. The most notable trend
in manufacturing information systems is a trend toward simplicity. The rele
vance of this article to those interested in TOC is found on the last page. TOC,
or management by constraints, reduces enormously the demands placed on
the information systems. The final section ofthe article discusses how an in
formation system should be developed.
306
Ronen, Boaz and Eli Schragenheim. "Drum-Buffer-Rope Shop Floor
Control:' Production and Inventory Management Journal Vol. 31, No.3
(1990): 18-23.
Some of the fundamental production scheduling concepts of TOC are ad
dressed, including descriptions of 5FS and DBR. The impact of the system
constraint is discussed. A simulated production process is detailed and DBR
applied to its scheduling. Buffer size and placement is discussed. The authors
mention the concept of assembly and shipping buffers. A simulation of a pro
duction process is outlined. The simulation of DBR applied to a production
process was successful in meeting the production targets and eliminating the
need for overtime.
307
Ronen, Boaz and Eli Schragenheim. "Buffer Management: A Diagnostic
Tool for Production Control," Production and Inventory Management
Journal Vol. 32, No.2 (1991): 74-79.
Keywords: Buffer Management, Information Systems, Manufacturing
BM enables managers to focus on the appropriate corrective actions to keep
the system performance intact, monitor the tradeoff between protection and
lead time, and assess the impact of major changes and/or improvements that
are to be implemented. Because it focuses only on what is crucial, BM uses
only a very limited number of data items, which greatly simplifies the proce
dure while maintaining its full effectiveness. There are, nevertheless, some in
formation-system and organisational ramifications. The information system,
computerised or not, should be able to plot the drum so that adding the lay
out of the buffer checkpoint can be done manually (or through an on-line sys
tem that records the arrival of materials to the buffer checkpoint). A buffer
manager should be appointed to check the buffer checkpoints and spread the
information to the relevant work centres. In case of an expediting mode, the
manager's task will be similar to that of an expediter.
308
Rosenberg, Barry. "Manufacturing's Future: Synch and Kaizen." World
Business Vol. 2, No.2 (1996): 15.
Keywords: Aerospace, Manufacturing
u.s. manufacturers, particularly in the aerospace industry, are developing
leaner, more profitable operations through the use of two new management
techniques-synchronous manufacturing and Kaizen. These approaches are
briefly discussed.
309
Roybal, Helene, Sydney Baxendale and Mahesh Gupta. "Using Activity
Based Costing and Theory of Constraints to Guide Continuous
Improvement in Managed Care" Managed Care Quarterly Vol. 7, No.1
(1999): 1-10.
Keywords: Activity-Based Costing, Health Care, Multimethodology
ABC and TOC have been applied successfully in many manufacturing organ
isations. Recently those concepts have been applied in service organisations.
This article describes the application of ABC and TOC in a managed health
care mental health and substance abuse organisation. One of the unique as
pects of this particular application was the integration of ABC and TOC to
guide process improvement efforts. The ABC model and the application of
TOe's 5FS are described. Emphasis was placed on unused capacities of activ
ities in the organisation.
310
Ruhl, Jack M. "ABM for Continuous Improvement, The Theory of
Constraints and Open Book Management." Journal of Cost Management
Vol. 9, No.3 (1995): 80-90.
Keywords: Activity-Based Management, Book Review, Continuous

Improvement
Ruhl reviews the book Using Activity-Based Management for Continuous
Improvement: A Step-by Step Approach by Tom Pryor and Julie Sahm.
311
Ruhl, Jack M. "Managing Constraints." The CPA Journal Vol. 67, No.1
(1997): 60-63.
The basic principles of TOC are outlined, with special attention to the ac
counting components. Ruhl considers the strengths and weaknesses of the
methodology in relation to more conventional approaches to management
accounting. Mention is made of Robert Kaplan's 1990 article criticising the
apparent short-term focus ofTOC accounting.
312
Ruhl, Jack M. ''An Introduction to the Theory of Constraints;' Journal of
Cost Management Vol. 10, No.2 (1996): 43-49.
TOC uses Throughput Accounting to measure performance and help a com
pany to make money. The article discusses the three elements of throughput
accounting in order of priority: throughput (rate at which money is generated
through sales); inventory (money used to buy items for the system) and op
erating expenses (money used to operate the company); and contrasts this ap
proach with traditional costing/cost reduction ideas. Constraints
(bottlenecks) are produced by dependent events and/or statistical fluctua
tions, and how they can be managed by the DBR system to improve through
put. The next article relates the theory to other cost management techniques
and to continuous improvement.
313
Ruhl, Jack M. "The Theory of Constraints Within a Cost Management
Framework;' The Journal of Cost Management Vol. 11, No.6 (1997): 16-24.
A continuation from the above article, "An Introduction to the Theory
of Constraints" that appeared in this journal (Vol. 10, No.2, 1996). This
second article explains how TOC relates to other management practices
such as continuous improvement, absorption costing, variable costing,
relevant cost analysis and ABC. The fundamental thesis of TOC is that
constraints determine the performance of any system. Thus, managers

should focus on managing the constraints in a system, rather than on

cutting costs.

314

Russell, G. R. and T. D. Fry. "Order Review/Release and Lot Splitting in

Drum-Buffer-Rope." International Journal ofProduction Research Vol. 35,

No.3 (1997): 827-845.

Keywords: Job-Shop, Scheduling, Simulation Model

The DBR planning and control system is relatively new in the published liter
ature. As such, many issues relating to various operating policies have yet to
be resolved. In this paper, we look at three such policies. Firstly, we study se
lected order review/release (ORR) methodologies that have appeared in the
published literature to be used as the rope component in DBR. Secondly, we
study the impact of lot-splitting by breaking process batches into numerous
transfer batches. Lastly, the impact of capacity balance between the bottleneck
resource and non-bottleneck resources are modelled. A simulation model is
constructed for an existing V-plant that manufactures pliers. Results indicate
that the appropriate choice of each operating policy is a function of the shop
performance criteria felt to be important by management. No previous paper
has studied the feasibility of using the various ORR methodologies in a DBR
environment.
315
Salafatinos, Chris. "Integrating the Theory of Constraints and
Activity-Based Costing." Journal of Cost Management Vol. 9, No. 3
(1995): 58-67.
TOC is introduced as a management philosophy whose core idea is that every
system must have at least one constraint. A constraint is a factor that limits the
system from getting more of whatever it strives for, e.g., profits in a business.
The essence of managing involves managing constraints. Throughput
Accounting is a technical approach to solving production flow problems. ABC
is generally seen as a technique that focuses primarily on analysing overhead,
while Throughput Accounting focuses on the dynamics of the flow of pro
duction through a factory. Some of the methodologies of ABC and
Throughput Accounting, e.g., activity mapping are complementary and can
be used effectively as integrated elements of an advanced cost management
system.
316

Scarlett, Bob. "In Defence of Management Accounting Applications."

Management Accounting (U.K.) Vol. 74, No.1 (1996): 46-47.

Keywords: Accounting, Activity-Based Costing

CIMA's Stage 3 Management Accounting Applications (MAA) paper involves

the study of a range of management practices and associated management ac
counting techniques such as ABC Throughput Accounting, Life-Cycle
Costing, and Backflush Costing, which it is sometimes claimed, are modern,
new and radical. Tony Mock (1995) has questioned the value of these prac
tices and techniques and asked why they appear in the MAA syllabus. The use
of these practices and techniques are defended. The thrust of these techniques
is that they seek to deploy a more sophisticated understanding of cost behav
iour than that found in much traditional management accounting.
Exploration of MAA techniques gives many insights into how business oper
ations work and what accounting is all about.
317
Schaffner, Karen. "Jonah Takes on the Apparel Chain." Apparel Industry
Magazine (October 1992): 6.
Keywords: Application, Apparel Industry
Portions of a brief interview with Goldratt are related to the supply chain pro
ject conducted with Warren Featherbone Co. their suppliers and retailers.
318
Schaffner, Karen. "New Partnership Shatters Paradigms!' Apparel Industry
Magazine (November 1992): 6-7.
Representatives from fibre suppliers, fabric suppliers, and the apparel manu
facturer Warren Featherbone Co. and the retailer Merchantile Stores formed
a paradigm shattering partnership. Goldratt ran an "intellectual whitewater
rafting trip" in order to prompt the participants to "release the intuition of
management" in order to design and implement a quick response supply
chain.
319
Schaffner, Karen. "OR: In 12 Days, Six Lives Were Changed!' Apparel
Industry Magazine (November 1992): 7-8.
Further discussion about a supply chain improvement project in the apparel
industry.
320
Scheinkopf, Lisa. Thinking For Change: Putting the TOC Thinking
Processes to Use. Boca Raton, FL: St. Lucie Press/APICS Series on
Keywords: Book, Thinking Processes
After an overview of TOC and the types of constraints that exist in any or
ganisation, the reader is led through the two foundational thinking methods
(Sufficient Cause; Effect-Cause-Effect; and Necessary Condition Thinking)
on which the Thinking Processes are based. The Categories of Legitimate
Reservation (logic rules which help ensure that we use these methods cor
rectly) are also explained. Scheinkopf encourages the reader to then use these
steps as a field guide, learning the five processes as needed, based on his or her
own particular issues. However she also presents step-by-step guidelines for
each of the five Thinking Processes tools, before showing how the tools can be
used in combination. Throughout the book, she uses tangible, easy-to-under
stand examples to demonstrate the methods, and the order of exposition is
geared towards understanding and using the tools immediately rather than
following the order that the tools are taught in "Jonah" programs. A must for
anyone learning the TOC Thinking Processes, and a book with many new in
sights for those who already know them. On the back cover, Goldratt says"I'm
recommending this book to anyone who wants to learn more about the
Thinking Processes. I even recommend it to veteran 'Jonahs'."What more need
one say?
321

Schragenheim, Eli. "Organisational Learning the TOC Way;' APICS
Constraints Management Symposium: Proceedings (1998): 51-54.

Keywords: Organisational Learning

A lot of publicity has been given lately to the subject of organisational learn
ing in general, and to that of learning from experience in particular. TOC
deals quite a lot with improving the self-learning capabilities of people in gen
eral and of managers in particular. This paper presents two different ap
proaches to team-learning from experience. The first deals with actual
experience, and the other with virtual experience. The techniques are grouped
into a comprehensive control system through our own thinking. Any control
system is based on two ingredients: realisation that something might go
wrong; and a warning system to announce that something did in fact go
wrong. Isn't that what learning from experience is all about?
322

Schragenheim, Eli. 1999. Management Dilemmas: The Theory of

Constraints Approach to Problem Identification and Solutions. Boca Raton,

FL: St. Lucie Press APICS Series on Constraints Management, 1999.

Keywords: Book, Decision Making, Problem Solving, TOC Philosophy

Readers develop TOC know-how through a "virtual experience." An incredi
ble ability awaits managers who practice TOC techniques: they can take a
problem, look beyond the less important details, and directly identify the
source of trouble. They've been known to promptly resolve perplexing mat
ters while the uninformed remain stuck. So many more managers could gain
the benefit of TOC thinking-if they only took the time. Eli Schragenheim
now offers an informative and enjoyable self-learning method, proving how
TOC can be invaluable at a wide variety of workplaces. Management
Dilemmas: The Theory of Constraints Approach to Problem Identification and
Solutions conveys TOC methods through "virtual experience," stories of man
agers and the situations they need to resolve. Take note of the dilemmas
they're facing. Think about how you would respond under those circum
stances. Then, compare your reactions with Schragenheim's TOC-influenced
analysis. Associated with Goldratt (the founder of TOC) for seven years,
Schragenheim doesn't tell how the stories end. Instead, he encourages the
reader to tryout TOC techniques especially the need to arrive at the most pre
cise answer by raising the right questions. The conclusions you reach today
could greatly help your on-the-job thinking tomorrow!
323
Schragenheim, E. and James Cox III. "Process Flow Industry-Scheduling
Control Using the Theory of Constraints." International Journal of
The applicability ofTOC in the process-flow industry is addressed, and com
parisons drawn between TOC approaches and the current practice. The DBR
methodology is altered to meet the needs of the process flow environment.
Guidelines for the strategic location and size of the reduced WIP inventory
levels are provided.
324
Schragenheim, Eli and Boaz Ronen. "Buffer Management: A Diagnostic
Tool for Production Control," Production & Inventory Management
Journal Vol. 32, No.2 (1991): 74-79.
Keywords: Buffer Management, Inventory Management, Simulation

BM enables management to focus on the appropriate corrective actions
to keep the system performance intact, monitor the tradeoff between
protection and lead time, and assess the impact of major changes and/or
improvements that are to be implemented. Because it focuses only on what
is crucial, BM uses only a very limited number of data items, which greatly
simplifies the procedure while maintaining its full effectiveness. There
are, nevertheless, some information-system and organisational ramifications.
The information system, computerised or not, should be able to plot
the drum so that adding the layout of the buffer checkpoint can be done
manually (or through an on-line system that records the arrival of materials
to the buffer checkpoint). A buffer manager should be appointed to check
the buffer checkpoints and spread the information to the relevant' work
centers. In case of an expediting mode, the manager's task will be similar to
that of an expediter.
325

Schragenheim, Eli and Boaz Ronen. "Expediting as a Two-Edged Sword"

Journal ofSystems Improvement Vol. 1, No.1 (1995): 33-38.

326
Segerstedt, A. "Escape from the Unnecessary-Some Guidelines for
Production Management." Production Planning &- Control Vol. 10, No.2
(1999): 194-199.
Segerstedt emphasises the importance to a manufacturing company of de
creasing the product structures, both in width and depth thereby shortening
throughput times, standardising and reducing complexity, and identifying
bottlenecks in order to increase efficiency and profitability. Having once been
a production control and plant manager at Ericsson and Benzlers, the author
has drawn upon his experience in researching this paper. Other influences in
clude knowledge of well-known trends in production management, e.g.,
World-Class Manufacturing, Lean Production, Time-Based Management,
OPT, etc. The paper also stresses that it is difficult to present real new ideas
concerning production management, but nevertheless discussions and publi
cations of ideas and incentives to achieve an efficient production of products
and services must continue.
327
Sellers, Edward. "Focus is Key to Stamper's Success;' Tooling & Production
Vol. 59, No.6 (1993): 36-38.
Edward Sellers' success in turning HS Automotive (HSA) around from bank
ruptcy into a profitable company is described. In 1990, HSA was on the brink
of bankruptcy when Sellers acquired the company and applied SM to its op
erations. SM zeroes in on specific production problems that have direct bear
ing on profit. After five months, HSA reduced raw materials used by 33%,
delivery time by 58%, and manhours by 48%.
328
Sharman, Paul. "Is GM on the Road to Recovery?" CMA: The Management
Accounting Magazine Vol. 66, No.9 (1992): 16-19.
Keywords: Application, Automotive Industry, Manufacturing
GM made headlines with a massive restructuring plan which included

closing 21 North American plants and eliminating 74,000 jobs by the

end of 1995. Cost-cutting and the elimination of waste were objectives, as was

the need for further improvements in product quality. The implemen
tation of Synchronous Manufacturing at the GM Oshawa plant is

outlined. Synchronous Manufacturing was seen as vital to the survival

of the plant. A pull system for controlling inventory was adopted

and inventory levels reduced. Since the implementation the average

man-hours to make a car have reduced by 30%, and costs have reduced

by 20%. Other issues, such as improved supplier relationships, and

the importance of cross functional teams to the implementation, are

discussed.

329

Shaver, Kim D."Put Your Efforts Where Your Problems Are: You Can Let Go

Of Costs Stanley Finds." Furniture Today (August 1991): 20.


330

Shaver, Kim D. "This Quiet Revolution Shatters the Cost World: TOC's

Cash-Flow Approach Slices Inventory, Boosts Bottom Line;' Furniture

Today (August 26,1991): 20.


331

Sheridan, John. "Throughput With A Capital 'T;" Industry Week (March 4,

1991): 44-49.

Keywords: Interview, Evolution, Goldratt

Many organisations have benefited from the implementation of TOC
methodologies. Goldratt claims that organisations need to get on to the "red
curve of continuous improvement" rather than the "green path meteoric rise
then decline." The traditional cost accounting mentality almost invariably
leads to flawed decisions. The majority of this article is devoted to gemlike
Goldratt quotes interspersed with the author's explanations. The battle be
tween the comparatively new TOC based "Throughput World" and the tradi
tional "Cost World" dominate much of the article. The 5FS are detailed along
with references to Goldratt's works. Several soft management issues such as
the challenge to create the paradigm shift in people's thinking are discussed.
The difficulty is summarised by Goldratt who states that change evokes
fear: Every improvement is a change, and any change is a perceived threat to
security.
332
Shore, Kathryn. "From The Goal to It's Not Luck-the Theory of
Constraints Approach to Delighting the Customers and the Shareholders;'
APICS (Australasia) Eighth Conference Proceedings (1996): 91-93.
Keywords: Marketing, Thinking Processes
The need to delight customers and shareholders is seen as a key feature of the
process of ongoing improvement. Thinking Process techniques are presented
as a method of identifying how to expand the market, how to increase the cus
tomer's perception of value for our products, how to effectively segment the
market, and how to do these things in a way that the competitors cannot
quickly imitate. Details of the Samsonite Europe case are presented to illus
trate the concepts related.
333

Simatupang, T. M., S. F. Hurley and A. N. Evans. "Revitalising TQM Efforts:

A Self-Reflective Diagnosis Based on the Theory of Constraints."

Management Decision Vol. 35, No. 10 (1997): 746-752.


Competition is fiercer than ever before, and TQM is one type of competitive
edge that has been believed to be a powerful weapon to beat the competition.
However, profound efforts, sacrificed by firms for the sake of TQM, have not
reaped any real benefits, and such efforts seem to cause the firm to move away
from achieving its goal. The main objective of this paper is to demonstrate
that TQM, in conjunction with the focusing efforts of TOC, could signifi
cantly improve a firm's ability to compete. A self-reflective diagnosis based on
TOC is discussed to assist managers to contemplate their firm's practices. The
decision procedure captured in TOC is introduced to facilitate management's
view of the wider spectrum of TOC applications. A section entitled "The
Essence ofTQM Practice" shows a way to revitalise TQM efforts in sustaining
the firm's existence.
334
Simatupang, T. M. and A. J. White "A Policy Resolution Model for
Knowledge Acquisition in Quality Management" Total Quality
Management, Vol. 9, No.8 (1998): 767-779.
Keywords: Mental Models
Changes in organisational life force senior managers to rethink constantly
their solutions to managerial problems and to examine the whole process to
accumulate knowledge. This study explores the integration of policy and
practice as a response to change whereby the policy makers seem to accept
mind-shift while preventing mind-set. The objective of this study is to find a
new direction in quality management, by challenging existing policy through
changing construct reality in mental models. A policy resolution model is
proposed to reconstruct reality based on TOe. The first process of policy res
olution is appreciative policy aimed at generating supportive policies.
Inter~ctive policy is the second process, which provokes participants to buy
into the change process based on appreciative policy. Dialogue is introduced
as a process to acquire knowledge in a policy resolution model. Thus, the pol
icy resolution model allows senior managers to examine continually organi
sational practice and portray a realistic picture of organisational performance
that will satisfy the needs of the inquiry and offer ways for improvement.
335

Simons, Jacob V. Jr. Major and Lt. Col. Richard 1. Moore Jr. "Improving

Logistics Flow Using the Theory of Constraints." Logistics Spectrum Vol.

26, No.3 (1992): 14-18.

Keywords: Aviation Logistics, Military, Scheduling

Logistics systems generally involve the management of products flowing
through a system or processes. Consequently, logistics improvement efforts
are frequently concerned with improving flow rates or system throughput.
Many organisations are beginning to demonstrate remarkable improvements

by applying TOe. This article relates some of those successes and presents a
fundamental introduction to the theory.
336
Simons, Jacob V. Ir, Maj. and Lt. Col. Richard I. Moore, Jr. "The Theory of
Constraints Approach to Focussed Improvement." Air Force Journal of
Logistics Vol. 16, No.3 (1992): 1-5.
Keywords: Continuous Improvement, Military, Multimethodology
Two arguments provide justification for a new management approach, CM, to
become increasingly relevant to Air Force logistics. Firstly, CM provides a crit
icallink which may be missing in many of the improvement efforts being un
dertaken throughout the Air Force. Secondly, there is growing interest from
senior leadership of USAF logistics community. Air Force leaders are realising
that they must promote continuous improvement, innovation and initiative,
creating an environment for change, now a key goal of the Air Force. TQM is
seen as means of achieving continuous improvement within the Air Force;
however tools are needed to complement TQM as it is not giving the results
desired. The introduction ofTOC as a necessary complement to the valuable
tools of TQM, and is illustrated using the chain metaphor. The SFS and DBR
are presented and discussed in detail. TOC Thinking Process concepts such as
effect-cause-effect diagrams and Evaporating Cloud conflict resolution are
briefly explained and discussed.
337
Simons J.V.,W. P.Simpson, B.J. Carlson, S.W. James, c. A. Lettiere, and B.A.
Mediate. "Formulation and Solution of the Drum-Buffer-Rope Constraint
Scheduling Problem (DBRCSP)." International Journal of Production
Research Vol. 34, No.9 (1996): 2405-2420.
Keywords: Manufacturing, Information Systems, Scheduling
The current understanding of constraint scheduling is advanced in several
ways. Firstly, the article describes the need for constraint scheduling in DBR
systems. Then, the production scheduling problem DBR attempts to solve is
formally presented. Finally, the quality of solutions produced by the solution
algorithm incorporated by the Avraham Y. Goldratt Institute (and now main
tained by the TOC Center's Goal Systems Group), in their production soft
ware is evaluated on a set of benchmark problems involving multiple
constraints. The results show that generally good results can be obtained as
long as the constraints are scheduled in the best sequence.
338
Simons, Jacob V.Jr. and Wendall P. Simpson, III. "An Exposition of Multiple
Constraint Scheduling as Implemented in The Goal System (Formerly
Disaster?")," Production and Operations Management Vol. 6, No.1 (1997):
3-22.
Keywords: Scheduling, Sequencing
Since Goldratt first appeared on the scene in the late 1970s, his ideas con
cerning production management have generated a huge amount of interest,
controversy, and misunderstanding. These ideas have been proliferated under
several names such as OPT, DBR, SM, and TOe. Although there seems to be
general agreement on the importance of how capacity-constrained resources
are scheduled, research aimed at advancing the state of the art for the specific
problem addressed by DBR continues to be limited by prior misunderstand
ing and the lack of a rigorous examination by the academic community. This
paper seeks to advance the state of research on constraint scheduling in sev
eral ways. First, it presents a concise history of the evolution of DBR. It then
explains the use of rods in constraint scheduling. Next, it presents in detail
the solution algorithm incorporated by the Avraham Y. Goldratt Institute in
their production software and, finally, relates that algorithm to alternative
methods. In the process of these activities, several lingering misconceptions
are resolved.
339
Slater, Mitchell. "Revolutionary Management." Manufacturing Systems
Vol. 13, No. 11 (1995): 50.
SM is synonymous with reduced lead times, reduced inventories, and a high
degree of customer satisfaction. Aro Fluid Products, in Angola, IN imple
mented SM to reach its goal of a 24-hour turnaround. The program allows
Aro to compete more effectively by modifying the existing mindset regarding
production and delivery of products. Within a year, Aro reached its 24-hour
goal. The MPI Group uses a synchronous flow methodology to help manu
facturers improve their operations. According to Al Podzunas of MPI, each
department should be working toward the common goal of making the com
pany money. Instead, the measure of each department is usually different.
The holistic approach of SM depends on the rejection of individualised
perfection.
340

Smith, Debra A. "Theory of Constraints: Evolution of a Revolution:'

Springs Vol. 35, No.4 (1996): 31-38.

Keywords: Application, Evolution, Thinking Processes

Smith's article follows on from research into applications of Toe to 21 North

American and European companies: Part of the IMA's report "TOe and Its
Implications for Management Accounting" (Noreen, Smith, and Mackey,
1995 (263)). The first evolution of TOe, introduced through The Goal,
brought about the shifting of the bottleneck to outside the organisation.
However, many companies were unable to convert the techniques to all areas
of the organisation. This is shown as a potential pitfall ofTOC. This pitfall led
Goldratt to develop the Thinking Processes, allowing TOe to become a
broad-based management strategy tool. Logical trees and cause-and-effect
reasoning were introduced. Goldratt published It's Not Luck, displaying the
use of logic trees and the impact of the techniques on bottom line perfor
mance. Smith's research confirmed the importance of senior management in
volvement and commitment and the coordinated use of the operations
management and management accounting techniques. Smith mentions the
use of Toe techniques at Renton Coil Springs, who established a Toe work
shop for employees. The application resulted in a 48% increase in revenues for
the organisation within three months.
341
Smith, Debra. "Using the Theory of Constraints to Identify and Resolve
Conflicting Measures and Policies:' APICS-Constraints Management
Keywords: Accounting, Performance Measurements, Thinking Processes
Standard costing tools and techniques are the enemy of total quality
programs, ]IT implementations, and TOe, but there is a deeper underlying
issue. After a company has identified and removed the standard accounting
issues, a more serious stumbling block is exposed: management strategies/
policies translated into local measures and local actions. The tool to deal
with conflicting measures or policies is the Toe cloud. Using Goldratt's
method of building chronic conflict clouds and authority clouds allows an
individual to clearly understand the inherent conflict between two opposing
job actions required for an individual or department to fulfill their work
objectives.
342
Smith, Jeffery J. "Theory of Constraints and MRP II: From Theory to
Results;' www.rogo.com/cac/jfSmith, 1994.
Keywords: Accounting, Manufacturing, Multimethodology
The basis of the paper is to display how MRP II can be incorporated into a
TOC management system. However, the bulk of the content is dedicated to
outlining the methodologies of TOC. The key differences between TOC and
MRP II are discussed in relation to a manufacturing process. Topics covered
include: TOC accounting measures, capacity constrained resources, influence
of a constraint on system output, scheduling approaches ofTOC and MRP II
lead-times, transfer and process batch sizes, DBR, buffer size and placement
including discussion about assembly and shipping buffers, set-up reduction,
TOC advantages over IIT, combining TOC and MRP II, purchasing and rela
tionships with suppliers, inventory control, quality improvement, manage
ment education, resistance to change, identifying bottlenecks, master
production schedule, and creating buffers. Results of implementation ofTOC
at several manufacturing plants are presented.
343
Smith, Malcolm. "Innovation and the Great ABM Trade-Off;' Management
Accounting (U.S.) Vol. 76, No.1 (1998): 24-27.
Company accountants need to emphasize the importance of innovation, de
spite the financial implications it may have on quality, time and cost.
Management accounting deals with these goals by using activity-based man
agement (ABM) tools, such as TOC or TQM. None of the existing ABM tools
tackle the issue of innovation. IIT encourages innovation to improve bottle
neck situations, although only in the short term.
344

Spearman, Mark 1. "On the Theory of Constraints and the Goal System;'

Production and Operations Management Vol. 6, No.1 (1997): 28-33.

Keywords: Critical Analysis, Scheduling, Software

Spearman presents a critical evaluation of TOC and the scheduling software

The Goal System, expressing views both positive and doubtful. Two issues of
concern were raised: The incomplete nature of TOC and its inability to offer
a complete management paradigm. The author claims trade offs are often
made and Toe is said to lack assistance in these situations. Secondly,

The Goal System is a push system. The Goal System is less robust, and leads
to greater WIP inventory levels. However, it is more robust than MRP
type systems. With respect to The Goal System, the advances in produc
tion scheduling offered are: constraint based scheduling, intuitive scheduling
algorithms, and the requirements of buffers. These are discussed in detail
and provide an argument for The Goal System finding popularity in
scheduling.
345
Spencer, Michael S. "Using The Goal in an MRP System:' Production and
Inventory Control Journal (Fourth Quarter 1991): 22-27.
Keywords: Manufacturing, Multimethodology, Scheduling
A multimethodology use of MRP II within a Toe framework is presented.

The author provides an introduction to OPT and its evolution into TOe, re
ferring to The Goal (1984 edition). A description of how MRP II operates is

presented in considerable depth. The author discusses the basic theory behind

DBR and goes to great length to marry DBR and a MRP II scheduling system.

Much of the discussion is focused around the use of buffers in the production

process. The author is in favour of a multiple buffer system, incorporating as
sembly and shipping buffers.

346

Spencer, Michael S. "Warehouse Management Using V-A-T Logical

Structure Analysis:' International Journal ofLogistics Management Vol. 4,

No.1 (1993): 130-140.

Keywords: V-A- T Analysis, Nonmanufacturing

The management of a warehouse facility has often been viewed as a problem
in facility layout, inventory management, or logistics. Seldom has the man
agement of a warehouse been viewed as a process of succeeding operations
that can be analysed as a unique operating production system. Yet, ware
houses are process oriented and can show significant improvement in pro
ductivity by applying methods usually used in production environments. One
such method is called V-A-T analysis. This method examines the process, de
termines the logical structure of the process and defines critical control points
for management to use to improve the overall process performance. This ar
ticle describes the V-A-T analysis and applies the method to three different
types of warehouse facilities.
347
Spencer, Michael S. "Economic Theory, Cost Accounting and Theory of
Constraints: An Examination of Relationships and Problems."
International Journal ofProduction Research Vol. 32, No.2 (1994): 299-308.
Keywords: Accounting, Application, Economic Theory
Toe is a production planning and control system reported to improve man
ufacturing performance surpassing both MRP II and TIT systems. One re
quirement of Toe is the assumption of a cost-accounting system that is very
different from traditional cost accounting. This study examines the conflict
between traditional cost accounting and Toe accounting, presents a descrip
tion of how the Toe method operates at The Trane Company (Macon, GA)
and how the cost-accounting aspect of Toe was used to evaluate the addition
of a new product line proposed by marketing.
348
Spencer, Michael S. and James F.Cox III. "Master Production Scheduling in
a Theory of Constraints Environment:' Production and Inventory
Management Journal (First Quarter 1995): 8-14.
Keywords: Manufacturing, Master Production Scheduling, Multimethodology
A clarification of the role of master production scheduling within a Toe
context. Several questions are posed. For instance if MPS for Toe only sched
ules the constraint, how is the finished product scheduled? An example of the
Toe framed MPS is detailed and includes diagrams of hypothetical produc
tion lines, and information about the product range. DBR is linked to the
MPS: The MPS is essentially the rope component of the scheduling method
ology.'The buffer should be also linked to the MPS as it is said the MPS should
create a time buffer between material release and the constraint. Discussion as
to the size of the time buffer excludes some works which take a more quanti
tative approach to solving the problem. A seven-step process is recommended
for the development of the MPS within the Toe framework.
349
Spencer, Michael S. and James F. Cox III. "Optimum Production
Technology (OPT) and the Theory of Constraints (TOe): Analysis and
Genealogy." International Journal of Production Research Vol. 33, No.6
(1994): 1495-1504.
Keywords: Evolution, Manufacturing
A discussion of the differences between Toe and OPT. The origin of OPT is
traced to Goldratt in 1979, and mention made of the change in meaning of the
acronym in the 1980s. Application to job shop production was achieved by

modifying the OPT software in 1980.The concepts of reducing inventory and
excess capacity for most stages of production are mentioned as known at this
time. In conclusion the authors state that confusion over OPT, The Goal, and
TOC should be greatly reduced. This paper contains a list of published works
on OPT, TOC as well, and a comprehensive bibliography.
350
Spencer, Michael S. and Samuel Wathen. "Applying the Theory of
Constraints' Process Management Technique to an Administrative
Function at Stanley Furniture." National Productivity Review (July 1994):
379-385.
Keywords: Administration, Application, Scheduling, Nonmanufacturing ,
Stanley Furniture is a large established manufacturer with a centralised ad
ministration and decentralised production facilities. The article is centred
around an application of TOC to their largest plant, at Stanleytown, USA.
Management applied TOe's 5FS to the organisation. The article directs atten
tion to the application of TOC to administrative and service functions at the
plant. TOC principles had firstly been applied to the production processes.
The results of applying the 5FS and the DBR process included: lower work in
process, shorter lead times, less expediting, and quicker response times.
Ninety-five percent of orders were now shipped within 15 days of receipt,
with emergency next day completion available in some situations. The end of
the month syndrome that often occurred was eliminated which resulted in
more even work loads across the month and a saving in wages because of re
duced reliance on overtime.
351
Spoede, Charlene, Emerson Henke and Mike Umble. "Using Activity
Analysis to Locate Profitability Drivers: ABC Can Support a Theory of
Constraints Management Process." Management Accounting (May 1994):
43-48.
Keywords: Accounting, Multimethodology, Profitability Drivers, Simulation
The focus of this article is the management accounting processes in manufac
turing: specifically, the use of ABC within a TOC framework. The authors
consider the real potential of ABC to be its ability to generate the data neces
sary to support the TOC management process. ABC is regarded as able to pro
vide detailed information that describes the range, cost, and consumption of
activities throughout the organisation and to provide accurate cost inforrna
tion to managers to improve their decisions. However, the authors do express

doubts that ABC is capable of providing information useful to managers for
strategic and operating decisions. The work flow of a simulated production
plant is displayed and the authors discuss the influence of set-up times on the
rate of flow. Data on simulation results are detailed. The authors conclude
that it is necessary for modified activity analysis to give recognition to re
source constraints.
352
Srikanth, Mokshagundam 1. Regaining Competitiveness: Putting 'The
Goal' to Work, second/revised edition. Wallingford, CT: Spectrum, 1993.
Keywords: Book
Abstract unavailable, but see Srikanth and Cavallaro, 1990.
353

Srikanth, Mokshagundam 1. ''A Common Language of Quality:

Synchronous Manufacturing in the Aerospace Industry." Quality Vol. 33,

No.3 (1994): 20-25.

Keywords: Aviation, Quality

Many aerospace experts lament the state of the industry in view of the stag
nant commercial aviation market and the loss of military contracts. However,
some aerospace executives believe that the situation provides the industry
with many opportunities. The present situation has shown the obsolescence
of current practice and is forcing all companies to change in order to compete
profitably in the next 50 years. This competitiveness can only be achieved
through new management practices, including quality programs.
354
Srikanth, Mokshagundam 1. "Inventory Valuations: Making Accuracy
Relevant," CMA- The Management Accounting Magazine Vol 70, No. 6
(1996): 19-22.
Keywords: Accounting, GAAP
Managers should always strive to value inventories accurately regardless of
whether their inventory evaluation is only for compliance with GAAP or is
considered crucial to efforts to boost the organisation's performance and
profitability. They should be aware that the traditional inventory valuation
process is seriously flawed. Aside from being costly and time-consuming, this
approach does not generate any information that can be used to make intelli
gent decisions. Managers looking for an alternative to this process should se
lect a method that does not use GAAP thinking in making operational
decisions, views inventory as an investment in material, focuses on improving

the performance of inventory as an investment, and constantly strives to re
duce inventory.
355

Srikanth, Mokshagundam 1. and Harold E. Cavallaro. Regaining

Competitiveness: Putting 'The Goal' To Work. New Haven, CT: Spectrum,

1990.

Keywords: Book, Manufacturing

Going beyond the concepts first introduced in the best-selling business novel,
The Goal, Regaining Competitiveness develops the concepts and methodolo
gies of SM in a logical step-by-step manner. This book provides practical and
detailed analysis of the "case study" presented in The Goal. Action items ex
pand on the basic concepts to help the manager understand, analyse and
apply SM within his or her specific operation. Regaining Competitiveness pro
vides the logical next step for managers in all disciplines in their exploration
of the implications and potential of SM implementation.
356
Srikanth, Mokshagundam 1. and Albert E. Podzunas. Synchronous
Manufacturing: Principles for World-Class Excellence: Workbook.
Wallingford, CT: Spectrum, 1992.
Keywords: Book, Manufacturing, Scheduling

This work book is an accompaniment to Synchronous Manufacturing:

Principlesfor World-Class Excellence.

357

Srikanth, Mokshagundam 1. and Scott A. Robertson. Measurements for

Effective Decision Making. Wallingford, CT: Spectrum, 1995.

Keywords: Book, Performance Measurement

This book provides a new perspective on the importance of performance

measurements, a fresh look at how to drive financial performance, and some
effective tools to guide decision making. (Complete abstract unavailable)
358
Stein, Robert E. "Quality Focus In The Factory: An Application of the
Theory of Constraints." APICS Constraints Management Symposium and
Technical Exhibit; Proceedings, Phoenix, AZ (April 26-28, 1995): 141-144.
TOC is a means of focusing the various quality improvement tools currently
available. These tools are listed and a basic outline of some TOC principles is
presented. The author states TOC is a road map to find out what to change,
what to change to, and then to make the changes necessary.
359
Stein, Robert E. Reengineering the Manufacturing System: Applying the

Theory of Constraints (TOC). New York: Marcel Dekker, 1996.

Keywords: Book, Manufacturing, Reengineering, Information Systems,

Scheduling

Stein addresses several key shortcomings of existing manufacturing systems,

and several important aspects of the TOC solution, at greater levels of detail
than have been seen before. With the publication of Reengineering the
Manufacturing System, Stein has made an important contribution to the man
ufacturing systems portion of the emerging TOC literature. This book pro
vides answers to two very basic and important questions in today's systems
marketplace: What to reengineer? Answer: The infrastructure of manufactur
ing information systems. What to reengineer to? Answer: To the public do
main specification for integrated manufacturing decision-support, shop
control, and scheduling systems described in the book, The Haystack
Syndrome. Stein's book offers a more detailed look at the many work-centre
level "scheduling" tools available within traditional shop floor control sys
tems, and explains why there is simply no way they can perform as well as
TOe's company-level DBR and dynamic buffering solutions.
360
Stein, Robert E. The Theory of Constraints: Applications in Quality
Manufacturing (Quality and Reliability, Vol. 50), Second Edition, New York:
Marcel Dekker, 1997.
Keywords: Book, Manufacturing, Multimethodology, Quality
Guidelines for the implementation of TOC and insights into strategic issues
as well as entirely new and expanded information in each area are discussed.
The book describes the impact of establishing valid policy systems and sup
plies an efficient method of addressing the physical environment; defines a
TOC-compatible TQM program and outlines organisational and communi
cation tactics; demonstrates who is responsible for specific tasks and how
goals are to be accomplished; examines the impact of TOC on supply-chain
management; analyses established tools, including quality function deploy
ment (QFD), design for manufacturability, statistical process control (SPC),
and design of experiments (DOE) from a TOC perspective; furnishes ways to
make companies recession-proof; speeds up the implementation process so
that profits occur more quickly and continue to grow; and much more.
361

Stillahn, Brad. "Constraints Management From APICS: The Key To Success;'

APICS: The Performance Advantage Vol. 7, No. 9 (1997): Education

Notebook Section.


Stillahn is the owner of West Tape & Label, a company turned around as a re
sult of implementing constraint management. On joining APICS he pursued
qualifications and developed a thirst for knowledge on constraint manage
ment. This experience led Stillahn to apply the methodology to West Tape &
Label. Employees of the company were sent on training to further educate the
company's number one resource. A possible capacity improvement of 300%
was identified where a 10% improvement had been envisaged. West Tape is
now implementing DBR to reduce lead-time and improve due-date perfor
mance. The market is their current constraint, so West Tape is now aiming to
obtain improvements throughout the entire supply chain.
362

Stillahn, Brad. "Addressing The Market Constraint: A Case Study?'


Keywords: Marketing, Thinking Processes

West Tape & Label Inc. is a small manufacturing business that supplies retail
ers and small independent businesses with custom print labels. The approach
taken in It's Not Luck to addressing the market constraint concept provides the
road map for developing and implementing a new marketing approach. The
use of the Thinking Processes in the development and implementation of the
West Tape & Label market offer provided the organisation with the direction
needed to continue their process of ongoing improvement.
363
Swain, Monte, Jan Bell, and Shahid Ansari (Editor). Theory of Constraints
and Throughput Accounting. New York: Irwin/McGraw-Hill, 1999.
Keywords: Book, Accounting
(Abstract Unavailable)
364
Tanner, John and Earl Honeycutt. "Reengineering Using the Theory of
Constraints: A Case Analysis of Moore Business Forms?' Industrial
Marketing Management Vol. 25 (1996): 311-319.
Keywords: Application, Nonmanufacturing, Reengineering, Thinking Processes
TOC is discussed as a method of analysing process flows and reducing bottle
necks. Specifically this case serves as an analysis for better understanding the
role of a reengineered sales force. The aim of reengineering is to gain quan
tum leaps in productivity. Reengineering is regarded as starting over. The con
centration is not on what is, but what should be. Reengineering begins with

customer requirements as opposed to conventional industrial engineering

which is primarily concerned with improving operating efficiencies. TOC is

described as a framework for analysing work processes and resource flows in

an organisation or a sales channel. Moore had a history of bureaucracy stifling

productivity, with the sales process involving 47 hand-offs. Invoice to pay
ment time has been slashed from 52 to near five days, benefiting cash flow.

TOC has reduced the clerical work in producing a purchase order, for exam
ple, to 10% of the original figure.

365

Thorne, Kym and Smith, Malcolm. "Synchronous Manufacturing: Back to

Basics!' Management Accounting (U.S.) Vol. 75, No. 11 (1997): 58-60.

Keywords: Accounting, Manufacturing, Performance Measurement

The authors say that SM grew from the recent conclusion of a number of the
orists that Western manufacturers were no longer competing successfully

with their Japanese counterparts because they had lost sight of the funda
mental goals of a business. They say Goldratt and Cox devised an OPT for SM

based on TOC and established three operational measures crucial to achiev
ing the money-making goal: throughput defined as the completed products

actually sold; inventory defined as all work in process and materials in opera
tion; and operating expense defined as all labour and other material. SM re
lates strongly to the other major techniques for managing production and

inventory-TIT, MRP and MRP II. It is possible that adopting OPT and

Throughput Accounting for long-term strategic decisions may lead compa
nies to discard the product or products with the best long-term profitability.

These reservations reinforce the need for an increasing emphasis on TIT that

creates a continuous improvement environment within which problems of

scheduling and dispatching are greatly reduced.

366

Tollington, Tony. "ABC v. TOC: Same Cloth as Absorption v Marginal,

Different Style and cue' Management Accounting (U.S.), Vol. 76, No.4

(1998): 44-46.

The accounting response to the growth of advanced manufacturing tech
nologies and related management philosophies is restricted by the adherence
to obsolete costing methods, such as absorption costing, according to
Goldratt. However many accountants claim that Goldratt's TOC is a variant

on a marginal-costing theme. ABC costs activities based on resource con
sumption, and was designed as a way of generating accurate full product
costs. TOC is a holistic way of management thinking with the issue of time
and quality at its heart.
367
Umble, Michael M. and Charlene Spoede. "Making Sense of Management's
Alphabet Soup." Baylor Business Review (Fall 1991): 26-27.
Keywords: Management Philosophies, Multimethodology
There is potential confusion resulting from the emergence of so many new
management philosophies. The flavour of the month syndrome persists. The
popularity of TQM and TIT comes out of Japan, but they should not be solely
given credit for the success of Japanese business enterprises. The Achilles heel
of these two philosophies is said to be that they are concerned with improve
ment everywhere in the organisation. TOC is held up as an alternative which
places the focus on the constraints. TOC is also said to be an umbrella which
enhances the implementation of TQM and the like. Without a focused ap
proach we are only occasionally likely to stumble upon the correct decision.
The biggest gains will be achieved by attacking the constraint.
368
Umble, Michael M. ''Analysing Manufacturing Problems Using V-A-T
Analysis." Production and Inventory Management Journal Vol. 32, No.2
(1992): 55-60.
Keywords: Manufacturing, V-A- T
V-A-T analysis is a component of the logistics section of TOC, and recognises
that plants of different structure are prone to certain types of problems. The
value of V-A-T analysis is its ability to identify probable problems in manage
rial control of the production process. Umble states typical causes of problems
are large batch sizing, premature release of materials, and stealing common
parts to build ahead at final assembly. Often the biggest constraint in manu
facturing plants are not physical but are devastating policy and procedures.
369
Umble, Michael M. and Mokshagundam 1. Srikanth. Synchronous
Manufacturing, Cincinnati, OH: South-Western Publishing, 1990.
Keywords: Book, Manufacturing
The first comprehensive book to present the evolving principles of
Synchronous Manufacturing in a cohesive fashion. The authors have
launched an invincible campaign against American manufacturing's foreign

competitors in this one volume; combining the forces of case studies, appli
cation aids, and vital information heretofore unavailable in written form. The
discussions in the book provide the reader with a new perspective on opera
tions management as well as the ability to understand fundamental issues in
management of manufacturing operations, learn proven systematic methods
of analysing and improving manufacturing operations, identify ineffectual
managerial policies and practices, and apply the principles of SM. This book
is aimed at both the business and academic community, offering explanations
that can be real eye-openers. It has been endorsed by university academia as
the first, most comprehensive text on the subject of SM available.
370

Umble, Michael and Mokshagundam 1. Srikanth. Synchronous

Manufacturing: Principles for World Class Excellence. Wallingford, CT:

Spectrum, 1995.

Keywords: Book

371


Management: Profit-Based Manufacturing for the 21st Century, Vol. I,


Keywords: Book
372
Management: Profit-Based Manufacturing for the 21st Century, Vol. 2,
Keywords: Book
373
Umble, Michael and Elizabeth J. Umble. "How to Apply the Theory of
Constraints' Five-Step Process of Continuous Improvement" Journal of
Cost Management (September/October 1998): 5-14.
Keywords: Application
A constraint is any element that limits the performance of an organisation,
relative to its goal. Constraints can be either physical, market, or policy con
straints. The TOe is based on the concept that every organisation has at least
one constraint, but seldom more than a few significant constraints. To signif
icantly improve a company's bottom line performance, strategies must ad
dress the organisation's constraint. The TOC five-step process of continuous
improvement emphasises strategies that increase the throughput of the or
ganisation, as opposed to strategies which emphasise cost reduction.
374
Underwood, John W. Capt. "Applying the Theory of Constraints to Army
Logistics;' Army Logistician No.4 (1994): 13-17.
Keywords: Application, Military
Using a few fundamental concepts of TOC, the author has examined the the
ory upon which u.s. Army logistics are based. An application of TOC, to a
Motor Pool Unit, is presented to highlight the possible benefits of applying
TOC logistics techniques. These benefits include greater overall effectiveness
and efficiency, improved service, and the improvement in quality of life for
Motor Pool staff. The author presents details of application of the 5FS and dis
cussion about the need for appropriate bottom-line performance measures
congruent to the goal of the unit.
375
Velocci, Anthony 1. "Pratt Synchronises its Supply Chain: United
Technologies Corp's Pratt and Whitney Unit," Aviation Week & Space
Technology Vol. 138, No. 23 (June 7,1993): 154-155.
Pratt and Whitney is using synchronous manufacturing to reduce costs and
increase cash flow. The manufacturing system eliminated excess inventory but
must be precisely managed.
376
Velocci, Anthony 1. "Cultural Shift Key to Vendor Survival;' Aviation Week
& Space Technology Vol. 141, No. 22 (1994): 44-46.
Keywords: Aerospace,Aviation
According to numerous aerospace executives gathered at the recent Access 94
aerospace suppliers conference, the fundamental shift taking place in the u.s.
aerospace/defence supplier base will force those vendors who want to prosper
to adopt a single-minded focus: customer satisfaction. Vendors who resist this
shift in the face of increasingly demanding customer expectations will be
come uncompetitive. Prime contractors are finding that it is too costly to
maintain relationships with vendors who cannot continuously increase the
value of their products and services. As a result, contractors are partnering
only with preferred suppliers-companies that can keep pace as they them
selves strive to meet higher customer expectations. The views of several ven
dors concerning the push to shrink the supplier base are included. Changes in

the approach to doing business that are required to keep pace in the 1990s are

discussed.

377

Velocci, Anthony 1. Jr. "Small Vendor a Model for Lower-Tier Suppliers;'

Aviation Week & Space Technology Vol. 143, No.1 (1995): 71-72.

Keywords: Aerospace,Application, Manufacturing

Howmet Corporation's Thermatech Coatings Division has pursued a strategy

of combining innovative technology with continuous business-process im
provements throughout the organisation, otherwise known as SM. As a result,

the company has outperformed competitors and emerged as a preferred ven
dor to some of the aerospace industry's most demanding customers.

Moreover, it is the world's only supplier certified by original engine manufac
turers to provide a chemical vapour deposition coating process based on the

use of platinum aluminide, which has been shown to offer key advantages

over traditional coating processes. Thermatech exemplifies the kind of enter
prise that will characterise the survivors of the shakeout currently under way

in the supplier base worldwide.

378

Verespej, Michael. "The Self-Education of Bruce Hamilton;' Industry Week

(April 1, 1991): 16-22.

Keywords: Application, Manufacturing, Participative Management

Bruce Hamilton is an employee of United Electric Controls. Hamilton made
changes to their manufacturing process based on TOe. He purchased 450
copies of The Goal for the employees of his organisation as a means of creat
ing an impetus for change. Hamilton saw the value of the adult population,
and their combined intellects. He created Goal workshops as he recognised
the minds of those in production were the key resource that would unlock the
secrets of productivity. TOC methods were used to reduce lead-times from 16
weeks to two weeks, lot sizes from 200 units to 10 units, finished inventory by
75%, set-up times from 90 minutes to three minutes, stockroom employees
from 26 down to five, and 30 production control employees down to 12.
Dramatic reductions in work in process inventory were achieved.
379
Verma, R. "Management Science, Theory of Constraints, Optimized
Production Technology and Local Optimization." Omega-International
Journal ofManagement Science Vol. 25, No.2 (1997): 189-200.
Keywords: Linear Programming, Product Mix, Scheduling

Verma's study addresses the performance of several approaches to production
planning. The analysis utilised a controlled laboratory experiment to compare
and contrast the performances of Management Science (MS), TOC/OPT and
Local Optimisation (LO). Test subjects were given hint sheets supposedly
based on MS, TOC/OPT and LO approaches. Verma concludes that analysis
of the results show that production planning by MS and TOC/OPT ap
proaches improved the performance more than the LO approach; MS was
found to improve the performance more than TOe.
380
Vollum, Robert B. "SFM/TOC Implementation Insights." APICS
Constraints Management Symposium and Technical Exhibit: Proceedings
(1996): 21-26.
An application of the SFM methodology, highlighting the substantial philo
sophical difference between the throughput world and the cost world. The
principles of managing flow are related and the issue of managing setups is
discussed as an example of the philosophically different approach taken by
TOe. Other issues examined include productivity, protective capacity
(buffers), opportunity time, and the impact of an application ofTOC/SFM. A
firehouse analogy is presented as a means of relating some of the conflicting
philosophies of the traditional and TOC methodologies. The author presents
material which is intended to make the paradigm shift from the cost world to
the throughput world go more smoothly.
381
Wagoner, Michael T. "Application of the Theory of Constraints to Printed
Circuit Board (PCB) Manufacturing in a Captive Shop Environment!'
Keywords: Application, Boeing, Manufacturing, Thinking Processes
A detailed look at the application ofTOC to the Boeing Printed Circuit Board
Centre (PCB), located in Kent, WA. During the early 1990s, the strategic value
of the centre was questioned as there were unacceptable scrap rates and poor
delivery performance. This paper illustrates the journey of the PCB centre to
enter the throughput world, while working within policy constraints. A deci
sion was made in 1993 to upgrade the factory facilities in an attempt to im
prove capability and competitiveness. The use of the CRT, Evaporating Cloud,
and FRT were critical to developing a common understanding of where the
centre was and where it was going. None of the constraints identified were
physical factory constraints, but actually the support infrastructure. The im
provements yielded by the application include a 35% increase in throughput
and a 95% on-time delivery performance.
382
Wahlers, J. and James F. Cox, III. "Competitive Factors and Performance
Measurement: Applying the Theory of Constraints to Meet Customer
Needs." International Journal of Production Economics Vol. 37, No. 2-3
(1994): 229-240.
Keywords: Application, Manufacturing, Performance Measurement
A discussion is presented on the selection of appropriate competitive factors and
performance measurements in order to guide operations management. TOC is
recommended for use, in conjunction with the new competitive factors and per
formance measures, as a means of responding to market demand. A case study is
presented where the company in question changes its competitive focus and its
performance measurement system in response to customer requirements in
terms of lead time and delivery promises. The accounting system was changed
from traditional cost accounting to Toe accounting. Lead times and Due Date
Performance (DDP) improved to the extent that the organisation gained a com
petitive advantage, becoming the preferred supplier in their industry. The paper
explores the relationships between the various factors discussed in the case.
383
Wayman, Willard A. ''As Excess Capacity Is Exposed, How Do You Increase
Productivity?" APICS Constraints Management Symposium and Technical
Keywords: Application, Manufacturing, Excess Capacity
Morton International, a manufacturer of air bag inflators, implemented prin
ciples of TOe. The resistance to accepting idle time that emerged from the
implementation of TOe is discussed. The resistance resulted from use of the
traditional measurement of local efficiency of equipment and labour. A con
sequence of this measurement system was a buildup of inventory. The process
of applying Toe to one of the Morton plants is outlined. The body of this ar
ticle relates the psychological response of line workers who were not used to
the extended periods of idle time called for in the new schedule. Some results
of the Toe implementation are detailed.
384
Weston, E. C. Ted. "Functional Goals are Often in Conflict with Each
Other." Industrial Engineering (November 1991): 25-29.
Keywords: Accounting, Manufacturing, Computer-Integrated Manufacturing
Computer Integrated Manufacturing (CIM) is a multimethodology concept

which incorporates a range of contemporary management philosophies. CIM
would be most effective if applied within a TOC framework. The task of iden
tifying a system's constraints may not be a trivial process. Managers must be
willing to communicate importance of identifying what to change in the or
ganisation to achieve its goals. Discussion is allocated to the accounting and
organisational behavioral implications of implementing TOe. In summary, it
is stated that underlying TOC principles are necessary to achieve significant
progress from the implementation of CIM.
385

Westra, Douglas, Mokshagundam 1. Srikanth and Michael Kane.

"Measuring Operational Performance in a Throughput World."


Keywords: Accounting, Application, Performance Measurement

Foldcraft Company was eager to restructure their organisation to bring re

sources in line with customer demand in a way that permitted more produc
tive operation. Foldcraft formed a business process redesign team that
included five key managers, 11 process users, and change management con
sultants brought in from the outside. The consultants specialised in SM, an
approach to performance improvement that views a manufacturing business
as an uninterrupted flow of material from suppliers to customers. The team's
first step was brown-paper mapping the total business process, focusing on
product flow and the business processes that support it. The team discovered
the degree to which the company's existing financial and operational perfor
mance measures shaped the entire working environment. This measurement
system was rooted in standard costing, a management accounting approach
whose usefulness Foldcraft knew was eroding rapidly in today's environment.
Switching to a performance measurement system based on synchronous
manufacturing boosted cash flow 500% and caused a ripple effect of other
measurable improvements.
386
Whalen, Charles E. Jr. "Manufacturing: Key To Prosperity." Apparel
Industry Magazine Vol. 56, No.3 (1995): 114-116.
Keywords: Apparel Industry, Application, Manufacturing, Supply Chain
For some time, the U.S. has been losing its ability to generate economic wealth
through manufacturing. In the past 20 years, nearly two-thirds of its apparel
competitors in children's wear have gone out of business. U.S. manufacturers
must rethink the way manufacturing views itself, and remind Americans how
critical manufacturing is to the u.s. The Warren Featherbone Co. has initiated
changes in operations within its supply chain. At first glance, the chain ap
pears to be made up of separate components. However, after analysing it with
business strategist Goldratt, Featherbone became convinced that this supply
chain must be viewed as a single entity. If virtual integration of the supply
chain-quick response-works for the apparel industry, similar alignments
exist for all other manufacturing segments.
387
Williams, K. "Watching the Theory of Constraints in Action." Management
Accounting (U.S.) Vol. 76, No. 11 (1995): 17-18.
Keywords: Continuous Improvement, Training, Thinking Processes, Education
The author of this article attended a TOC training course. The program was
sponsored by the Avraham Y. Goldratt Institute and was conducted at
Massachusetts Institute of Technology. Many of the basic principles of TOC
were related via various educational tools. Topics covered included the TOC
approach to management accounting and the Thinking Processes as a prob
lem structuring tool. The continuous improvement philosophy inherent
within TOC formed a major component of the program.
388
Wilson, Ken. "Getting a Handle on Complex Manufacturing:' APICS- The
Performance Advantage (U.S.) (March 1997): 64-66.
Keywords: Aerospace, Application, Manufacturing
Ketema A & E of California, manufacturers of high-precision components for
military and commercial aerospace vehicles, introduced appropriate methods
to successfully manage its resource chain and manufacturing flow operations.
The methodologies used were based on the application of TOC/DBR.
Software allowed Ketema to proactively manage the work-flow, analyse the
employee and resources required to service the flow, and identify the weak
links in the flow in advance of a particular order receipt. Utilising TOC/DBR,
Ketema A & E reduced WIP by 40% within two months, reduced lead-times
by 30-60% depending on the product, and reduced lot sizes.
389
Wilson, Peter, Howard Devlin and Greg Roche. "How BHP Implemented
Supply Chain Management Across Its Asian Roll Forming Business."
APICS (Australasia) International Conference Proceedings: Surfers
Paradise, Australia, May 1998.
Keywords: Application, Supply Chain Management

BHP, the world's 14th largest steel maker, operates 18 roll forming plants in
the Asian region. Growth has meant that the supply chain for each of the busi
nesses and the region as a whole has quickly become more complex. An up
grade of the logistics system was an integral part of preparing these businesses
for an increasingly competitive market. A pilot implementation of SM
methodology was performed at one of BHP's Malaysian factories. This pilot
implementation facilitated the development of the SMT's SM
Implementation Kit. The kit was then used as the basis of learning for all of
the sites. The materials management module provided positive business re
sults. These included reduced lead times, a 50% inventory reduction produc
ing a cash injection and interest savings, and customer service levels increased
from 70% to over 90%.
390
Wolffarth, Gregg. "Organisational Issues and Strategies to Consider When
Implementing Computerised DBR." APICS-Constraints Management
Keywords: Enterprise Resource Planning, Multimethodology, Scheduling
This article claims that the introduction ofDBR scheduling methodology into
your organisation will result in the emergence of a number of issues regard
ing processes, politics, and behaviour of personnel. The intent of this article is
to help the reader gain insight from one company's implementation of a DBR
software solution concurrently with a new enterprise resource planning
(ERP) system. It assumes that the reader already possesses a rudimentary
knowledge of the Toe and DBR, and presents actual issues in a real-world sit
uation, allowing the reader to benefit from cycles of learning.
391
Wu, Shih-Yin, John S. Morris and Thomas M. Gordon. ''A Simulation
Analysis of the Effectiveness of Drum-Buffer-Rope Scheduling in
Furniture Manufacturing." Computers & Industrial Engineering Vol. 26,
No.4 (1994): 757-765.
Keywords: Scheduling, Simulation
Simulation has proven to be an important computer tool in analysing new
manufacturing approaches. In this paper, the authors use simulation models
to compare a new approach to manufacturing with current practices. The new
approach is referred to as the DBR method of synchronous manufacturing.
The authors discuss the DBR approach and demonstrate the application of
DBR in a furniture manufacturing case example. Simulation models are used
to compare the DBR approach with the typical system of production control
referred to as a cutting approach. The simulation analysis indicates consider
able savings in makespan are possible when DBR is used in place of the cut
ting approach.
392
Yahya-Zadeh, Massood. "Product-Mix Decisions Under Activity-Based
Costing with Resource Constraints and Non-Proportional Activity Costs;'
Journal ofApplied Business Research Vol. 14, No.4 (1998): 39-45.
Keywords: Activity-Based Costing, Product-Mix Decisions, Scheduling
There are potential drawbacks for companies adopting ABC as a management
and decision-making tool. ABC relies heavily on the assumption of propor
tional activity cost structures. Further, it ignores resource and technological
constraints. The author argues that both problems can be addressed through
the integration of ABC with the operational decisions based on Goldratt's
TOe. The proposed approach offers the added benefit of mitigating the
short-run bias of the TOC approach in product-mix decisions.
393
Yahya-Zadeh, Massood. "Integrating Long-Run Strategic Decisions into
the Theory of Constraints." Journal of Cost Management Vol. 13, No.1
(1999): 11-19.
Keywords: Multimethodology, Product Mix, Strategic Decisions
This article starts with the argument that TOC is a powerful short run max
imisation tool, which focuses on maximisation of throughput, taking tech
nology, product mix, and other parameters as given. Ignoring technological,
product, and market parameters can be a prescription for long run disaster.
TOC need not, however, be interpreted in this narrow manner. It should be
viewed as a broad management philosophy encompassing short-run and
long-run strategic decisions. Incorporating product mix and capacity modi
fication decisions into the framework ofTOC is possible. This article demon
strates how this can be achieved.
394
Yenradee, Pisal. ''Application of Optimised Production Technologies in a
Capacity Constrained Flow Shop: A Case Study in a Battery Factory."
Computers and Industrial Engineering Vol. 27, No.1 (1994): 217.
Keywords: Application, Scheduling, Simulation
An application of the OPT principles and some simple scheduling rules with
out the sophisticated OPT software in a four-stage capacity constrained flow
shop is demonstrated by using a medium-sized battery factory as a case study.

The throughput and inventory performances of OPT policy are evaluated and

compared with those of push and pull policies by using a simulation study.

The performances of OPT are attractive. Although the OPT policy has rela
tively low inventory level, it can still maintain relatively high throughput rate.

395

Yurtsever, T. and N. G. Pierce "Computerised Manufacturing Monitoring

and Dispatch System" Computers and Industrial Engineering Vol. 35, No.

1-2 (1998): 137-140.

Keywords: Semiconductor Industry

The authors present a discussion of the development and implementation of

Motorola's Graphical Manufacturing Monitoring System (GraMMS), that

provides real-time graphical monitoring of manufacturing data including

work-in-process (WIP), equipment, throughput, and dispatch rankings.

GraMMS consists of four main applications, namely: Dynamic Dispatch, WIP

Monitoring System (WMS), Equipment Management System (EMS), and

Throughput Monitoring System (TMS). GraMMS provides Motorola semi
conductor wafer fabs with instant data-driven decision support and trend

analysis as well as a short-interval scheduler via discrete-event simulation.

The Dynamic Dispatch system is a combination of simulation and heuristics

based on concepts from TOe. This competitive advantage increases output,

decreases cycle time, and improves resource utilisation.

396

Zmirak, John. "The Power of 'The Goal:" Success (January/February 1994)

91-93.

Keywords: Application, Book Reviews

TOC and the work of Goldratt is introduced, through the eyes of several man
agers who have applied TOC methodologies to their organisations. T. Edward
Sellars of HS Automotive, Joe Steurer of JOFCO Inc., and Martha Philips of
Prernark's Food Equipment Group, all detail the benefits of applying
Goldratt's philosophies to their organisations. In each instance the quantifi
able results of the implementation are presented. The article concludes with
comment about Goldratt's business novels The Goal and It's Not Luck.
The Theory of Constraints

Book List

034
Burgess, Susan H. and Mokshagundam L. Srikanth. Regaining Control: Get Me To The
Shipping Dock On Time. New Haven, CT: Spectrum, 1989.
036

Campbell, Robert J. Competitive Cost-Based Pricing Systems For Modern Manufacturing.

Westport, CT: Quorum Books, 1992.

052
Cohen, Oded and Domenico Lepore. 1999. Deming and the Theory of Constraints. Great
Barrington, MA: North River Press, 1999.
067 '
Covington, John. Tough Fabric. Severna Park, MD: Chesapeake Consulting Group, 1996.

073

Cox, James F III and Michael S. Spencer. The Constraints Management Handbook. Boca

Raton, FL: St. Lucie Press/APICS Series on Constraints Management, 1998.

082
Dettmer, William H. Goldratt's Theory of Constraints: A Systems Approach to Continuous
Improvement. Milwaukee, WI: ASQC Press, 1997.
083
Dettmer, William H. Breaking the Constraints to World-Class Performance: A Senior
Manager's/Executive's Guide to Business Improvement Through Constraint Management.
Milwaukee, WI: ASQC Press, 1998.

132

Goldratt, Eliyahu M. The Haystack Syndrome: Sifting Information out of the Data Ocean.

Croton-on-Hudson, NY: North River Press, 1990.

133
Goldratt, Eliyahu M. Theory of Constraints: What is This Thing Called the Theory of
Constraints and How Should It be Implemented? Croton-on-Hudson, NY: North River
Press, 1990.
147
Goldratt, Eliyahu M. It's Not Luck. Great Barrington, MA: North River Press, 1994.

151

Goldratt, Eliyahu M. Critical Chain. Great Barrington, MA: North River Press, 1997.

153

Goldratt, Eliyahu M. and Jeff Cox. The Goal, 2nd rev. ed. Croton-on-Hudson, NY: North

River Press, 1992.

154

Goldratt, Eliyahu M. and Robert E. Fox. The Race. Croton-on-Hudson, NY: North River

Press, 1986.

195

Kendall, Gerald I. 1998. Securing the Future: Strategies for Exponential Growth Using the

Theory of Constraints. Boca Raton, FL: St. Lucie Press/APICS Series in Constraints

Management, 1998.

207

Leach, Larry. The Critical Chain Project Managers' Fieldbook. Idaho Falls, ID: Quality

Systems 1999.

209
Levinson, William A., ed. Leading the Way to Competitive Excellence: The Harris
Mountaintop Case Study. Milwaukee, WI: ASQ Quality Press, 1998.
214

Lockamy, A. III and James F. Cox III. 1994. Reengineering Performance Measurement.

Boston, MA: Irwin Publishers, 1994.

223

Lundrigan, Robert F. and James R. Borchert. 1988. The Challenge: Increasing Profits

Through Focused Management. Croton-on-Hudson, NY: North River Press, 1988.

246

McMullen, Thomas B. Introduction to the Theory of Constraints (TOC) Management

System. Boca Raton, FL: St. Lucie Press/APICS Series on Constraints Management, 1997.

262

Newbold, Robert C. ProjectManagement in the FastLane: Applying the Theory ofConstraints.

Boca Raton, FL:St. Lucie Press/APICS Series on Constraints Management, 1998.

263

Noreen, Eric, Debra A. Smith and James T. Mackey. 1995. The Theory ofConstraints and its

Implications for Management Accounting, First Edition. Edited by Clare Barth. Great

Barrington, MA: North River Press, 1995.

The Theory of Constraints Book List 185
320

Scheinkopf, Lisa. Thinking For Change: Putting the TOC Thinking Processes to Use. Boca

Raton, FL: St. Lucie Press/APICS Series on Constraints Management, 1999.

322

Schragenheim, Eli. Management Dilemmas: The Theory ofConstraints Approach to Problem

Identification and Solutions. Boca Raton, FL: St. Lucie Press/APICS Series on Constraints

Management, 1999.

352

Srikanth, Mokshagundam L. Regaining Competitiveness: Putting The Goal to Work

Second/rev Edition, Wallingford, CT: Spectrum Publishing Co.

355

Srikanth, Mokshagundam L. and Harold E. Cavallaro. Regaining Competitiveness: Putting

The Goal To Work. New Haven, CT: Spectrum, 1990.

356

Srikanth, Mokshagundam L. and Albert E. Podzunas. 1992. Synchronous Manufacturing:

Principles for World-Class Excellence: Workbook. Wallingford, CT: Spectrum, 1992.

357

Srikanth, Mokshagundam L. and Scott A. Robertson. Measurements for Effective Decision

Making. Wallingford, CT: Spectrum, 1995.

359
Stein, Robert, E. Reengineering the Manufacturing System: Applying the Theory of
Constraints (TOC). New York: Marcel Dekker, 1996.
360

Stein, Robert E. The Theory ofConstraints: Applications in Quality Manufacturing (Quality

and Reliability, Vol. 50), 2nd Edition. New York: Marcel Dekker, 1997.

363

Swain, Monte, Jan Bell, and Shahid Ansari, editor. Theory of Constraints and Throughput

Accounting. New York: Irwin/McGraw-Hill, 1999.

369

Umble, Michael M. and Mokshagundam L. Srikanth. 1990. Synchronous Manufacturing,

Cincinnati, OH: South-Western Publishing, 1990.

370

Umble, Michael and Mokshagundam L. Srikanth. 1995. Synchronous Manufacturing:

Principles for World Class Excellence. Wallingford, CT: Spectrum, 1995.

371

Umble, Michael and Mokshagundam L. Srikanth. 1997. Synchronous Management: Profit
Based Manufacturingfor the 21st Century, Wallingford, CT: Vol. 1, Spectrum, 1997.

372
Umble, Michael, & Srikanth, Mokshagundam L.. Synchronous Management: Profit-Based
Manufacturingfor the 21st Century, Vol. 2, Wallingford, CT: Spectrum, 1997.
Relevant Books Not Covered in the Abstract Section

Henke, Emerson and Charlene Spoede. Cost Accounting: Managerial Use of Accounting
Data. PWS-Kent Publishing Co: Boston, 1991.

Goldratt, Eliyahu M. Project Management the TOC Way. Croton-on-Hudson, NY: North

River Press Publishing, 1999 (forthcoming).

Smith, Debra. The Measurement Nightmare: How the Theory of Constraints can Resolve
Conflicting Strategies, Policies, and Measures. Boca Raton, FL:St. Lucie Press, 1999 (forth
coming).
Keyword Index

Activity-Based Costing
026,033,036,037,040,061,063,079,099,116,123,166, 181, 193, 194,222,237,309,310,
315,316,392.
Accounting
002,022,024,026,027,032,033,036,037,039,040,041,048,049,055,057,061,063,071,
072,073,076,089,090,091,092,093,094,108,109,116, 118, 123, 137, 139, 146, 155, 156,
166,170,181,184,185, 189, 193,202,212,215,218,222,233,234,235,237,247,261,263,
272,273,295,296,301,302,311,312,313,315,316,341,342,343,347,309,354,363,365,
366, 385, 384.
Applications
002,003,004,007,008,009,010,011,014,017,018,019,024,026,027,028,030,031,035,
037,042,045,054,057,060,062,074,075,076,078,077,086,087,089,091,104,107,121,
127,164,170,176,177,178,179,187,190,192,196, 197, 198,200,203,205,209,210,217,
228,231,232,234,235,238,241,242,244,250,252,256,257,258,259,263,264,265,266,
270,274,275,278,294,297,298,300,306,327,317,318,319,328,339,340,347,350,361,
364,373,374,375,377,378,381,382,383,385,386,388,389,394,396.
Books
005,034,036,052,067,073,082,083,153,154,132,133, 147, 151, 195,209,214,223,246,
262,263,320,322,352,355,356,357,359,360,363,369,370,371,372.
Book Reviews
005,089,096,098,115,156,310,396.
Buffer Management
008,020,024,078,100,157,186,204,290,307,324.
Continuous Improvement
024,040,082,083,104,105,133,142,153,154,179,186, 195, 196,220,246,253,298,304,
336,387.
Education
023,047,184,227,251,299,387.
Information Systems/Software
004,053,054,075, 169,225,231,245,248,305,307,337,359,384.
Linear Programming
023,024,131,225,231,236,272,281,282,284,379.
Manufacturing
001,003,008,009,010,011,013,014,015,016,018,020,021,024,026,027,034,035,037,
038,042,043,044,046,048,055,056,057,059,062,063,070,074,075,076,080,085,086,
087,088,090,091,100,102,104,106,109,121,124,129, 153, 154, 132, 134, 135, 138, 149,
167,168,169,176,178,179,187,188, 191, 192,200,204,206,211,212,213,223,228,232,
241,244,247,250,252,257,258,259,260,261,268,269, 270, 271.5, 274, 283, 285, 292, 293,
294,295,296,298,300,305,306,307,308,314,323,324,327,328,337,338,339,342,303,
348,349,355,356,359,360,361,365,368,369,375,377,378,380,381,382,383,384,386,
388.
Multimethodology
016,017,021,024,025,026,029,033,036,040,042,052,054,056,061,079,080,099,116,
125,129,131,166,170,172,174,178,181,191, 193, 194,213,222,240,248,249,253,264,
267,283,286,289,294,298,301,304,309,315,333,336,342,345,348,351,358,360,367,
390,393.
Nonmanufacturing/Services
009,031,032,048,077,094, 126, 180,232,255,256,257,266,288,297,302,309,346,350,
364.
Performance Measurements
002,024,029,030,041,057,070,090,104,120,125,132, 133, 190,212,214,235,270,271,

287,296,341,357,365,382,385.

Product Mix

022,023,024,026,073,114,122, 131, 193,217,225,236,271,272,281,282,284,302,379,

392,393.

Project Management
012,024,115,127,224,242,262,207.
Quality
008,021,052,054,080,090,199,243,301,333,358,360.
Remanufacturing
019,099,107,161,162,163,164,177.
Scheduling
001,008,014,024,028,034,037,042,043,044,046,047,048,056,058,073,078,077,100,
106,113,114,117,120,124,125,126,129,153,132,150, 157, 160, 161, 162, 163, 164, 165,
167,168,173,174, 182, 186,204,205,223,240,243,245,249,256,259,261,265,268,269,
279,289,290,292,294,299,300,306,314,323,335,337,338,344,345,359,379,390,391,
392,394.
Simulation Modelling
016,020,044,047,059,088,099,126,161, 162, 188,204,268,269,292,299,306,314,324,
351,391,394.
Keyword Index 189
Socratic Method
135,136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146,223.
Thinking Processes
005,006,009,024,030,060,068,073,080,081,082,083,084,097,104,112,125,133,147,
148,151,172, 183, 197,208,226,263,274,297,320,332,340,341,362,381,387.
Industry Groupings Index
Apparel Industry
203,228,232,252,317,318,319,386.
Automotive Industry
009,010,017,035,039,074,188,190,327,328,396.
Aviation/Aerospace Industry
003,011,013,019,027,099,107, 164, 177,303,308,335,353,375,376,377,388.
Furniture Industry
086,210,250,350,390.
Health Sector
278,309.
Military
019,078,099,161,162,164,175,177,297,303,335,336,374.
Semiconductor Industry
187,192,209,258,259,260,293,395.
Author/Co-Author Index

Acord, Terry

001
Adams, David V.

297
Adelman, Philip J.

002
Albert, Mark

003
Aldred, Katherine

004
Alvos, Tony

228
Anderson, Duncan M.

005,006,007
Andrews, C.

008
Angst, David R.

009
Ansari, Shahid

363
Antonio, E. J.

016
Ardahji, Ray B.

017
Atkinson, Anthony A.

018
Atkinson, Thomas, H.

019
Atwater, J. Brian

020,021,022,043,044,045
Aquilano, Nicholas J.

048
Balakrishnan, Iaydeep

023
Balderstone, Steven J.

024,229,230
Bailey, Rona, N.

126
Barlevy, Rami

025
Baxendale, Sidney J.

026,166,309
Becker, S. W.

008
Beckett, William

027
Bell, Jan

363
Benge, James M.

297
Betz, Herbert J.

028
Black, Joseph

177
Blackstone, John H.

029,123, 124, 125
Borchert, James R.

223
Boyd, Lynn H.

030,071
Bramorski, T.

031
Brewer, P.

040
Brignall, Stan

032
Brown, Steve

292
Buchwald, Steve

033
Burgess, Susan

034
Burton-Houle, Tracey

183
Callahan, Joseph

035
Campbell, Robert J.

036,037,038,039,040
Carlson, B. J.

337
Caspari, John

041
Castellano, Joseph F.

196,300,301
Cavallaro, Harold E.

355
Chakravorty, Satya

020,021,042,043,044,045,046,047
Chase, Richard B.

048
Chen, F. Frank

288
Coate, Charles J.

049
Cockerham, Glenn C.

297
Cohen, Oded

050,051,052
Coman, Alex

053,054,055,056
Constantinides, Kim

057
Conway, Richard

058
Cook, David

059
Cooper, Majorie J.

060
Cooper, Robin

061
Cosco, Joseph

062
Coughlan, Pamela

063
Covington, John W.

064,065,066,067,068
Cox, James, F., III

030,069,070,071,072,073, 102, 103, 118,213,214,
323,348,349,382
Cox, Jeff

153
Cybart, Barb

074
Dang, Khiem

027
Danos, Gerard

075
Darlington, John

063,076
Decaluwe, Lieve

205
De Clercq, G.

267
Demmy, W. Steven

078, 077, 079
Demmy, Barbara Sue

077
Author/Co-Author Index 195
Dettmer, William H.

080,081,082,083,084

Debruine, M.

197

Devlin, Howard

389

Di Bono, Paul

085

Donlin, Gina E.

086

Draman, Rexford H.

087

Duclos, 1. K.

088

Dugdale, David

089,090,091,092

Eden, Yoram

093,094,095,302
Edwards, N.

096
Egbelu, P. J.

016
Elmes, David

097
Elmore, R. C.

296

Elton, Jeffrey

098
Evans,A. N.

333

Fargher, J. S. W.

099

Fawcett, Stanley

100

Finch, Byron J.

101,102,103,104,221

Floyd, Barry

105

Flowers, Steven H.

297

Foote, Jeffrey 1.

186

Ford, Roger C.

106

Forth, Karl D.

107

Foster, Benjamin P.

108

Fox, Robert E.

109, 110, Ill, 154

Franks, Richard L.

112

Franks, Stephen

113

Fredendall, 1. D.

114

Freedman, Julian

115

Freeman, Gregg

264

Frey, Karen J.

049

Fritzsch, Ralph, B.

116

Fry, Timothy D.

117,118,119,314

Funk, Paul

120

Gadbios, Michael

121

Gagne,M.

022

Galambos, Nicholas, P.

170

Gardiner, Lorraine, R.

029, 124, 125

Gardiner, Stanley, C.

029, 123, 124, 122, 125

Garner, Karen M.

126

Garrison, William P.

127

Gautschi, T.

128
Ghiselli, G.

164
Giauque, William

129
Gibson, John

231
Gilbertson, Deb

232
Glasserman, Paul

130
Godfrey, John R.

131
Goldratt, Eliyahu M.

132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142,
143,144,145,146,147,148,149,150,151,152,153,154
Gordon, Thomas M.

391
Grackin, Ann

155
Graves, Chris

156
Greco,M.

157
Greenfield, David

158
Gronseth, Steve

159
Griffiths, Frank

239
Grosfeld-Nir, Abraham

160
Guide, Vincent D.

161,162,163, 164
Gung, R. R.

165
Gupta, Mahesh

026,166,309
Gupta, Sanjeev

167, 168, 169
Gur,Ron

303
Gurd, Bruce

156
Hall, Robert

170

Hansen, Ray

171,172

Hansen, Dawna

172

Harmel, Bob

244

Harowitz, R.

255,256

Harrison, Mike

173,174

Haupt,W.

267

Hayden, Lt. Col. John E.

175

Hein, Kevin

176

Henke, Emerson

351

Hinneburg, Patricia A.

177

Hobbs, O. Kermit

178,179

Hodgdon, Bill

180

Holmen, J.

181

Holt, James R.

182

Honeycutt, Earl

364

Houle, Dale T.

183

Houston,M.

184

Howe, W. Gerry

071,072

Hrisak, D. M.

185

Hughes, Vernon H. 235

Hurley, Simon F. 186,333
Israni, Arjun. 187
Jacobs, Brian.

188

James, S. W.

337

Jayson, Susan

189

Iebb, F.

190

Jones, Colwyn

089,090,091,092
Joy, Louis w., III.

191

Kane, Michael

385

Karan, Kirk R.

119

Karlsson, Margaret

170

Kayton, David

192

Kee,R.

193,194

Kendall, Gerald I.

195

Klein, Carl F.

009

Klein, Donald J.

196,197,255,256,300,301

Knill, Bernie

198

Koller, Gideon

056

Koutal, R.

199

Koziol, David

200

Krausert, Bob

201

Kroll, Karen

202

Kron, Penny

203

Lambrecht, Marc, R.

204,205
Laskey, D.

218

Latamore, Berton G.

206

Lea, B. R.

114

Leach, Larry

207

Leader, Alan H.

208

Lee, Terry Nels

282

Lepore, Domenico

052
Lettiere, C. A.

337

Levinson, William

209,259,260
Libby, Bill

210
Lin, F. R.

211

Lippa, Victor

212

Locascio, A.

211

Lockamy, Archie, III

070,213,214
Loe, Terry W.

060
Louderback, Joseph

215
Low, James T.

216,217,218,219,220
Luebbe, R.

104,221
Luther, R.

222
Lundrigan, Robert F.

223
Lynch, William E.

177,224
Mabin, Victoria J.

225,226,227,228,229,230,231,232
MacArthur, John B.

233,234
Mackey, James, T.

235,263
Mackness, John R.

299
Madan,M.

031
Maday, Clarence J.

236,237
Maren, Michael

238
Marsh, Peter

239
May, Neville

240
McClelland, Bill

241,242
McIlvaine, B.

243
McGinnis, Lloyd P.

297
McKinney, Bryan L.

009
McMullen, Thomas B.

245,246,247,248
McNamara, Kathy

166
McMullen, Mark

244
Mediate, B. A.

337
Mills, T.

040
Miltenburg, J.

249
Mobbs, Rosy

250
Mock, Tony

251
Moore, Lila

252
Moore, Richard I.

253,254,335,336
Morris, John S.

391
Morrison, Kenneth R.

188
Motwani, J.

031,255,256,257
Murphy, Robert, E.

258,259,260
Nagel, R. N.

289

Netherton, Janice

261

Newbold, Robert

224,262

Noreen, Eric

263

O'Dea, Katherine

264

O'Donovan, Brian

222

Olhager, Jan

265

Olson, Christopher T.

266

Onwubola, G. C.

267

Osten, Sam 268,269
Ostlund, Bjorn 265

Overall, Karl 270

Papp, Ken 270
Paresa, Barbara 019

Parr, John B. 271
Pass, Shimeon 304,305

Patterson, J.Wayne 215
Patterson, Mike 244,268,269,272

Paulson, Albert S. 273
Peach, Bryce 274
Pearson, John 100
Peltu,M. 275
Perez, Jose Luis 276
Petrini, Arthur B. 078

Petty, Nicola 277
Phillips, Belinda 278
Pierce, N. G. 395
Pinedo, Michael 279
Plantz, Bruce 280
Plenert, Gerhard 281,282,283

Podzunas, Albert E. 356
Posnack, Alan J. 284,285

Ptak, C.A. 286,287
Pujadas, W. 288
Raban, S. 289

Radovilsky, Zinovy 290

Rahman, Shams-ur 291

Ramsay, Martin L. 292

Raviv,A. 293

Ray, Joe 159

Reimer, Glenn 294

Rezaee, Zabihollah 295,296

Roadman, Charles, H. 297

Roberts, Joseph 298

Robertson, Scott A. 357

Roche, Greg 389

Rodrigues, Luis H. 299

Roe, Justin 098

Roehm, Harper A. 196,300,301

Ronen, Boaz 053, 054, 055, 056, 093, 094, 095, 105, 160, 302, 303,
304,305,306,307,324,325
Rosenberg, Barry 308
Roybal, Helene 309

Ruhl, Jack M. 310,311,312,313
Russell, G. R. 314
Salafatinos, Chris 315

Salhus, Vicki 087
Sawaya, William 129
Saxena, Puneet 260
Scarlett, Bob 316
Schaffner, Karen 317,318,319
Scheinkopf, Lisa 254,320
Schragenheim, Eli 306,307,321,322,323,324,325
Schwartz, Christopher 192
Segaert, Alain 204
Segerstedt, A. 326
Sellers, Edward 327
Sessum, Joseph 046
Shank, John 057
Sharman, Paul 328
Shaw,M. J. 211
Shaver, Kim D. 329,330
Sheridan, John 331
Shore, Kathryn 332
Simatupang, T. M. 333,334
Simons, Maj. Jacob v. [r 335,336,337,338
Simpson, Wendall P., III 337,338
Slagmulder, Regine 061
Slater, Mitchell 339
Smith, Debra A. 263,340,341
Smith, Francis 191
Smith, Jeffrey J. 342
Smith, Malcolm 343,365
Spearman, Mark L. 344
Spencer, Michael S. 088,345,346,347,348,349,350
Spoede, Charlene 351,367
Srikanth, Mokshagundam L. 034,352,353,354,355,356,357,369,385
Steel, Daniel C. 119
Stein, Robert E. 358,359,360
Steudel, H. J. 165
Stillahn, Brad 361,362
Sullivan, M. Cathy 108
Swain, Monte 363
Tabibzadah, Kambiz 292

Talbott, John 079, 184
Tanner, John

364
Teynor, Tim

192
Thorne,Kym

365

Tollington, Tony

366

Tretter, Daniel

298

Umble, Elizabeth J.

373

Umble, Michael M.

351,367,368,369,370,371,372,373

Underwood, Capt. John W.

374

Uzsoy, Reha

192

Velocci, Anthony L.

375,376,377

Verespej, Michael

378

Verhoeven, Penelope R.

047

Verma, R.

379

Visser, J.

267

Vogelsang K.

257

Vollum, Robert B

380

Wagoner, Michael T.

381

Wahlers, J.

382

Wang, Yashan

130

Ward, Terry J.

108

Wathen, Samuel

350

Wayman, Willard A.

383

Weston, F. C. Ted

384

Westra, Douglas

385

Whalen, Charles E.

386

White,A. J.

334

White, Charles W.

188

Williams, K.

387

Wilson, Ken

388

Wilson, Peter

389

Wolffarth, Gregg

390

Wright, Alan C.

186

Wu, Shih-Yin

391

Yahya-Zadeh, Massood

392,393

Yenradee, Pisal

394

Yurkosky, Theodore P.

297

Yurtserver, T.

395

Zmirak, John

396
Publication Source Index

Accountancy
089
Accounting Education: Theory and Practice
215
Accounting Horizons
193
Air Force Journal of Logistics
078,175,253,336
Apparel Industry Magazine
064,157,203,252,317,318,319,386
APICS (Australasian Region) Conference Proceedings
033,228,271,332,389
APICS--Constraints Management Symposium Proceedings
002,009,019,025,066,068,070,081,084,113,127,159, 171, 172, 174, 177, 180, 182, 183,
187, 191,218,224,240,241,242,245,258,270,285,287,297,321,341,358,362,380,381,
383,390
APICS--Online Edition
069,075,283
APICS--The Educational Society for Resource Management
169,178,248
APICS--The Performance Advantage
069,075,149,150,152,158,201,206,219,220,247,361,388
Army Logistician
374
ASQCPress
082,209
Automotive Industries
035
Aviation Equipment Maintenance
107
Aviation Week & Space Technology
011,013,375,376,377
Bankers Magazine
031
Baylor Business Review
367
Best Practice
176
Bobbin
065
BPICS
134
Business First (USA)
074
Business Performance
051
Business Review Weekly
250
Chartered Accountants Journal of New Zealand
185
CMA- The Management Accounting Magazine
018,196,295,328,354
Computer Aided Production Management
050
Computers and Engineering
106,288, 303
Computers & Industrial Engineering
016,188,276,391,394,395
Computing
275
Corporate Controller
217
Cost Management Concepts and Principles
233
CPAJournal
311
Datamation
105
Publication Source Index 205
Design News
012, 128
DSIR Physical Sciences Report 58
126
Engineering and Management Press
121
European Journal of Operational Research
265,281
Furniture Design & Manufacturing
001,086,280
Furniture Today
329,330
Harvard Business Review
098
Health Sector
278
Human Systems Management
053,055
lIE Solutions
004,085,168
Industrial Engineering
010,017,120,292,305,384
Industrial Marketing Management
364
Industrial Management
043,071,087,093,094,125,268,269,302,304
Industry Week
135,136,137,138,139,140,141,142,143,144,145,146, 202, 331, 378
International Journal of Management
244,290
International Journal of Logistics Management
117, 119,346
International Journal of Operations and Production Management
044,046,124,204,291,299
International Journal of Production Economics
088,163,382
International Journal of Production Research
054,114,162,165,213,221,249,289,314,323,337,347,349
International Journal of Production Research (U.K.)
029,021
International Journal of Purchasing and Materials Management
123
International Journal of Retail and Distribution Management

122
Journal of Accounting & EDP
109
Journal of Applied Business Research
108,116,392
Journal of Air Force Logistics
175
Journal of Business Strategy
027,062
Journal of Cost Management
022,040,166,170,194,222,296,310,312,313,315,373,393
Journal of Insurance Issues
095
Journal of Manufacturing Systems
211
Journal of the Operational Research Society
231
Journal of System Improvement
112,325
Logistics Spectrum
264,335
Managed Care Quarterly
309

Management Accounting (U.S.)

026,037,038,039,057,061,079,115,181, 184, 189,200,212,234,235,273,300,301,343,

351,365,366,385,387

Management Accounting (U.K.)

049,063,076,090,091,092,251,316
Management Accounting Research
032
Management Decision
333
Managing Automation
243
Managing Service Quality
255,256,257
Management Science
160
Management Today
190
Manufacturing and Service Operations Management

130
Manufacturing Engineering
014
Manufacturing Systems
167,155,210,259,339
Material Handling Engineering
198
Modern Machine Shop
003
National Productivity Review
099,298,350
New Zealand Business
261
New Zealand Manufacturer
015
Omega-International Journal of Management Science
379
Operational Research Society of New Zealand-Conference Proceedings
230
Operational Research Society of New Zealand-Newsletter
226,229,277
Production and Inventory Control Journal
205,345
Production and Inventory Management Journal
020,028,030,042,056,059,072,077,100,101,102,118, 129, 164, 179, 192,236,266,272,
282,284,286,294,306,307,324,348,368
Production and Operations Management
048,058,338,344
Production and Operations Management Society
279
Production Planning and Control
267,326
Quality
353
Quality Progress
080, 199
Review of Business
197
Semiconductor International
260
Simulation
161
Simulation & Gaming
047
Solid State Technology
293
Southwestern Marketing Association
060
Springs
340
Success
005,006,007,238,396
Supply Management
096,239
Tooling & Production
327
Total Quality Management
008,334
Triangle Business Journal
237
VVorksManagement
173
VVorld Business
308
VVorld VVide VVeb
110,111,342
Book Publishers
ASQCPress
082,083,214
Chesapeake Consulting Group
067
Dryden Publishers
104
Irwin Publishers
214
Irwin/McGraw Hill Publishers
363
McGraw Hill Publishers
232
Marcel Dekker Publishers

359,360
The North River Press Publishing Corporation
052,132,133,147,151,153,154,223,263
South-Western Publishing Company
369
The Spectrum Publishing Company Inc.
034,352,355,356,357,370,371,372
St. Lucie Press/APICS Series on Constraints Management
073,195,246,262,320,322
Quality Systems
207
Quorum Books
036
Glossary

ABC
Activity-Based Costing
ABCM
Activity-Based Cost Management
Action
Part of the Thinking Processes. An activity defined in a transition tree which is used to ob
tain an intermediate objective (Stein, 1997: 291).
Additional Cause
One of the categories oflegitimate reservation within the Thinking Processes. Explaining
that an additional cause which adds to the size of the observed effect must exist. The causes
magnify the size of the observed effect and neither cause by itself can totally explain the
size or extent of the effect (Noreen et al. 1995: 161).
A-Plant
Part of V-A-T analysis. Type A, or Assembly, plants are characterised by convergent as
sernbly points. A large number of components or raw materials are converted by the pro
duction process into one or a few end products.
Assembly Buffer
Part of Drum-Buffer-Rope Scheduling. Used to ensure that those assembly operations di
rectly fed by the constraint do not wait for materials to arrive from nonconstrained legs
within the net. It also determines the release schedule for raw material into those opera
tions that feed the assembly buffer. (Stein, 1997: 291).
Bananas
Part of the Thinking Processes. Bananas are ellipse-shaped objects that sit across two or
more arrows in CRTs and FRTs. Depict multiple concomitant causes of the observed effect.
Behavioural Constraint
Whenever a behaviour is in conflict with reality and results in a negative impact on the
global measurements of the company, it is said to be a behavioural constraint. Probably
the most prevalent cause of the behavioural constraint is linked to the measurement sys
tem (Stein, 1997: 13-15).
Bottleneck
The stage in a process with the lowest output capacity. The slowest stage in a production
line.
Buffer

The buffer, within Drum-Buffer-Rope, is inventory or time that protects the physical con
straint from running out of work. Guards against the negative impact of statistical fluctu
ation on system performance.

Buffer Management (BM)

Buffer Management is a system proposed by Goldratt for controlling the size of work in

process inventory buffers, to protect the system constraint (Goldratt, 1990: Ch20).

Capacity Constrained Resource (CCR)

Not necessarily a bottleneck, but a resource that may become a bottleneck if it is not care
fully managed (Umble and Srikanth, 1990).

Categories of Legitimate Reservation (CLR)

A set oflogic rules. The rigorous foundation upon which the Thinking Processesare built. The

CLR verify and validate of causal relationships identified by tree builders (Dettmer, 1997).

Causality Existence .

One of the categories of legitimate reservation within the Thinking Processes.

Questioning the existence of the causal link between the cause and effect by use of the

IF ... THEN statement; by explaining that although we agree that both C and E exist, there

is no direct link between the stated cause and observed effect (Noreen et al. 1995: 161).

Cause Insufficiency

One of the categories of legitimate reservation within the Thinking Processes. Explaining

that an additional non-trivial cause must exist to explain the existence of the observed ef
fect. If either of the hypothesised causes do not exist, then the observed effect will also not

exist (Noreen, et al., 1995: 161).

Clarity

One of the categories of legitimate reservation within the Thinking Processes. Not fully

understanding the cause-effect relationship or the entity. Requesting an additional expla
nation of the cause-effect relationship or entity (Noreen, et al., 1995: 161).

Cloud

See Conflict Resolution Diagram

Communications Current Reality Tree

Part of the Thinking Processes. A modified version of the CRT, used to communicate the

cause-effect relationships leading to undesirable effects.

Conflict Resolution Diagram (CRD or Cloud)

(aka Evaporating Cloud) Part of the Thinking Processes. A logic tool used to help solve

conflicts in a win-win manner. This tool is used to resolve conflict(s) which emerge within

the problem structuring process. A means of promoting the examination of assumptions

that underpin alternative approaches or views.

Constraint

Goldratt defines a constraint as "anything that limits a system from achieving higher per
formance versus its goal" (Goldratt 1990: 4).

Constraint Management

(aka Theory of Constraints)

Core Problem

Part of the Thinking Processes. An entity found at the lowest levels of the CRT. The Root

Cause that leads to the majority of the undesirable effects.

Glossary 213
Cost World

The dominant accounting paradigm. A reliance on reducing costs to improve organisa
tional performance, rather than increasing throughput. The tendency to optimise local

measurements at the expense of global performance.

Critical Chain (CC)

Part of Critical Chain Project Management. That set of tasks which determines the over
all duration of a project. Usually it requires taking resource capacity into account. It is typ
ically regarded as the constraint or leverage point of a project (Newbold, 1998: 264).

Current Reality Tree (CRT)

Part of the Thinking Processes. A cognitive representation used to answer the question

"what to change" in the system. The CRT is the first tree constructed when using the

Thinking Processes and is applicable to problem solving situations where complex systems

are involved. A means of structuring a complex problem. (Identifies root causes of unde
sirable effects.)

Desirable Effect (DE)

Part of the Thinking Processes. Effects that are beneficial, in relation to the goal of the or
ganisation. Identified in the FRT.

Dice Game

A simple game from The Goal that uses dice and matches to relate the negative effects of

statistical fluctuation and dependent events on the performance of a production line.

Drum

Part of Drum-Buffer-Rope Scheduling. A name given to the rate of production of a phys
ical constraint. The beat of the drum dictates the rate that material should flow into the

system.

Drum-Buffer-Rope (DBR)

The TOC production scheduling technique.

Dry Tree

A Thinking Processes tree that has been scrutinised for validity, using the categories of le
gitimate reservation, by someone trained as a Jonah, and others in the organisation.

DDP

Due Date Performance

Effect -Cause-Effect

Part of the Thinking Processes. An earlier method that looked for core causes by continu
ally establishing cause-and-effect relationships and supporting each relationship with an

additional effect (Stein, 1997: 294). See Predicted Effect (Entity) Existence.

Elevate

Part of the Five Focusing Steps. Elevating the constraint, the act of increasing the ability of

the constraint in the creation of throughput by means other than exploitation.

End-of-Month Syndrome

The tendency for manufacturing plants to use high levels of overtime at the end of the

month to get products shipped on time. A result of traditional approaches to production

scheduling. (See Hockey-stick effect)

Entity

Part of the Thinking Processes. Statements on trees, used to identify either a cause or an

effect.

Entity Existence

One of the categories of legitimate reservation within the Thinking Processes.

Questioning the existence of the entity (cause or effect) by explaining that the cause or the

effect does not actually exist (Noreen et al. 1995: 161).

Evaporating Cloud

(see Conflict Resolution Diagram)

Exploit

Part of the Five Focusing Steps. Step Two, a leverage point is exploited by leveraging

more out of it (Newbold, 1998: 264). The process of increasing the efficiency of the con
strained resource without obtaining more of the resource from outside the company

(Stein, 1997: 294).

Feeding Buffer

Part of Critical Chain Project Management. A feeding buffer is placed at each point where

a non-Critical Chain task joins the Critical Chain. This buffer protects the Critical Chain

from disruptions on tasks feeding it, and allows for early task starts (Newbold, 1998: 264).

Finished Goods Inventory (FGI)

An accumulation of finished items produced by the manufacturing line. Not yet sold to

clients.

Five Focusing Steps (5FS)

The Five Focusing Steps of continuous improvement. A means of improving system per
formance versus its goal. Identify the system's constraint; Decide how to exploit the sys
tem's constraint; Subordinate everything else to the above decision; Elevate the system's

constraints. If in the previous steps a constraint has been broken, go back to Step 1,but do

not allow inertia to cause a system constraint.

Fixed Cost

Part of Throughput Accounting. Costs that don't change, in the short-term, in relation to

changes in volumes produced by the system. Usually includes Labour, which is a diver
gence from the view of labour expense in the "cost world."

Floating Bottleneck

When a bottleneck moves, but not as the result of an explicit decision. A chaotic, difficult

to manage, situation (Noreen et al. 1995: 145).

Flying Pigs

Part of the Thinking Processes. Flying Pigs, in TOC parlance, are injections which initially

look impossible. They don't have a clear means of implementation already identified.

Future Reality Tree (FRT)

Part of the Thinking Processes. This is a tool that helps examine and communicate the ex
pected effects of proposed changes or "injections." It is similar to a CRT, except it deals

with future events and effects (Newbold, 1995: 265).

Gating Tasks

Part of Drum-Buffer-Rope and Critical Chain. Tasks that control the flow of materials into

a system, because there are no tasks that precede them.

Global Measure

Measures of performance that promote goal congruent behaviour. Or alternatively, those

measurements used to measure effectiveness from outside the company (Stein, 1997: 295).

Glossary 215
Goal

The reason the system exists. The owner of a system defines its goal. The goal of most pub
lic companies is to make money now and in the future (Newbold, 1998: 265). "The goal of

a manufacturing plant is to make money" (Alex Rogo to Jonah, The Goal Goldratt and

Cox, 1986: 58).

Herbie

Part of TOC production scheduling. The name of a character in Goldratt's business novel

The Goal. Herbie is the Boy Scout who is the slowest walker in the Scout troop, thus slow
ing progress toward completion of the trek. Herbie is a colloquial name for a system con
straint or bottleneck.

Hockey Stick Effect

Related to the End-of-Month Syndrome. The name comes from the shape of a graph

showing production output for a month. The line is flat for most of the month and climbs

steeply upward at the end.

Identify

The first of the Five Focusing Steps. Identify the system constraint.

Inertia

The last of the Five Focusing Steps. Don't let inertia become a system constraint.

Injection

Part of the Thinking Processes. A change suggested to eliminate the existence of undesir
able effects identified in the CRT, or conflict in a Cloud.

Intermediate Objective (10)

Part of the Thinking Processes. Entities of the Prerequisite and Transition Trees.

Intermediate objectives represent a transitional step that must be achieved before the main

objective can come to fruition.

Inventory (I)

Part of Throughput Accounting.

Inventory Dollar Days (IDD)

Part of Throughput Accounting. This formula provides a measure of excess inventories.

The IDD is calculated by multiplying the excess inventory days by the value of the unit of

inventory, as follows: Excess Inventory (units) x $ Value per Unit = IDD.

JIT

Just-In-Time

Jonah

The elusive character from The Goal, who leads Alex Rogo to find his own solutions via

the Socratic method. The name given to a person who has completed the Jonah training

course through the Avraham Y. Goldratt Institute.

Jonah's Jonah

A person qualified to train others to be Ionahs.

Local Measure

Performance measures used at the department level to guide activity (Stein, 1997: 295).

Local Optima

The outcome of a philosophy that promotes the optimised performance of individual

components of a system. Based on the erroneous view that the sum of the local optima will

equal the system optimum.

Logistical Constraint
Any time problems occur that originate from the planning and control systems within the
company, there is said to be a logistical constraint (Stein, 1997: 13-15).
Management Skills Workshop
A training course run by the Avraham Y. Goldratt Institute.
Market Constraint
Whenever market demand is less than the capability of the company's resources, a market
constraint exists. While market constraints have many causes, most exist due to manage
ment policies (Stein, 1997: 13-15).
MRP
Material Requirements Planning
MRPII
Manufacturing Resource Planning
Murphy
From "Murphy's Law," a colloquial term for statistical fluctuation, or what can go wrong
will go wrong.
Negative Branch Reservation
Part of the Thinking Processes. This tool is used to show the connections between a pro
posed action and expected negative consequences. Originally part of the FRT.
Nine Rules of OPT
A set of rules for production scheduling, part of the early stages of development of TOe.
Objective
Part of the Thinking Processes.The left-hand side entity of the Conflict Resolution Diagram.
Obstacle
Part of the Thinking Processes. Something that will negate or reduce the effect of the in
jection and its impact on the undesirable effect.

Operating Expense (OE)

Part of Throughput Accounting. One of the three main measures of TA. Operating

Expense measures how much money the system spends on turning Inventory into

Throughput.

Optimised Production Technology (OPT)

A production scheduling software application based on constraint management princi
ples, developed by Goldratt and colleagues at Creative Output. The first stage in the evo
lutionary process of TOe.

OR
Operations Research
Oxygen
Part of the Thinking Processes. A concept for examining the cause-effect validity between en
tities. Without oxygen, fire will not burn. Without this entity this effect will not be observed.
Policy Constraint
Any rule, written or unwritten, that has an unfavourable impact on system performance.
Predicted Effect (Entity) Existence
One of the categories of legitimate reservation within the Thinking Processes. Using an
other effect (E) to show that the hypothesised cause does not result in the initially ob
Glossary 217
served effect. On the other hand, if the original cause also results in the additional effect,

then this supports the original cause-effect relationship (Noreen et al. 1995: 161).

Prerequisite Tree

Part of the Thinking Processes. This tree is used to identify any obstacles to the imple
mentation of solutions to the core problem, starts with one of the injections.

Process Batch

A distinct group of parts processed at a resource.

Process of On-Going Improvement (POOGI)

(see the Five Focusing Steps)

Product Cost

A "cost world" accounting concept.

Product Mix Heuristic/Algorithm

A means of identifying the optimal product mix, based on knowledge of the system con
straint and ranking products in descending order of Throughput per Constraint Minute.

Project Buffer

Part of Critical Chain Project Management. A project buffer is placed after the final task

of a project in order to protect the project completion date from delays, especially delays

along the Critical Chain. This is the most important buffer to place and to monitor

(Newbold, 1998: 266).

Protective Capacity

Part of Drum-Buffer-Rope production scheduling. Capacity used to protect the capabil
ity of a resource or group of resources in meeting the schedule (Stein, 1997: 297).

Raw Materials Inventory

A physical resource about to be converted into work-in-process inventory.

Recession Proofing

A methodology designed to ensure that the company will continue to grow, regardless of

the economic environment in which it exists (Stein, 1997: 297). Conceptually similar to

the principles of Sir Stafford Beer's Viable Systems Methodology.

Resource Buffer

Part of Critical Chain Project Management. A buffer that ensures resources will be avail
able and that tasks on the critical chain can commence at the scheduled time.

Root Cause

Part of the Thinking Processes. An entity in a CRT for which there are no postulated

causes. Usually a starting point for a branch that leads to a undesirable effect.

Rope

Part of Drum-Buffer-Rope Scheduling. The Kanban connection between the constraint

and the gating operation.

Shipping Buffer

A buffer of finished goods used to protect adherence to shipping deadlines.

Socratic Method

Named after Socrates. A means of teaching concepts via a series of questions and answers.

Statistical Fluctuation

(see Murphy) The natural variation evident in the performance of manufacturing

operations.

Subordinate

The third step of the Five Focusing Steps. Supporting the performance of constraint op
erations.

Synchronous Manufacturing

A subset of the Theory of Constraints. Concerned with manufacturing scheduling and

performance measures. Represents a stage in the evolution of TOC prior to the develop
ment of the Thinking Processes and Critical Chain.

System Optima

A philosophy of making decisions and aligning measurements to improve the perfor
mance of the system as a whole, rather than components of the system d. Local Optima.

Recognising local decisions have a systemwide impact.

Tautology

One of the categories of legitimate reservation within the Thinking Processes. Being redun
dant in stating the cause-effectrelationship. The cause is actually a reworking of the effect,thus

being redundant. If a tautology exists,you can state the cause as being the effectand the effect

as being the cause. Therefore, the cause does not lead to the effect (Noreen et al. 1995: 161).

Theory of Constraints (TOC)

The name given to the management philosophy developed mainly by Dr. Eliyahu M.

Goldratt. TOC contains three interrelated components: Logistics and Scheduling,

Throughput Accounting, Thinking Processes.

Thinking Processes

A system improvement/problem structuring methodology designed to answer three ques
tions: what to change, what to change to, and how to change. Contains a set of tools, some

of which can be used independently, or as a complete interrelated system.

Throughput (T)

Part of Throughput Accounting. Throughput is Sales Revenue less Totally Variable Costs.

Throughput Accounting (TA)

One of the three major components of TOe. A management accounting system, when re
lated to the dominant paradigm "cost world" represents a philosophical dichotomy.

Throughput Dollar Days (TDD)

Part of Throughput Accounting. The amount of money tied up in a particular activity or

project, is multiplied by the number of days that money is tied up. Thus, we have a single

quantitative value to represent two different dimensions, money and time, which impact

on a decision.

Throughput Lever

A leverage point that helps to produce more throughput. Most of the powerful leverage

points are throughput levers (Newbold, 1998: 268).

Throughput World

Relating to Throughput Accounting. A term that captures the philosophies of goal con
gruent measures and the objective of increasing revenue to increase profit, rather than de
creasing costs.

T-Plant

Part of V-A-T Analysis. Type T plants are characterised by divergent assembly points at

final assembly.

Glossary 219
Transfer Batch

A group of parts moved from one operation to the next.

Transition Tree

Part of the Thinking Processes. This tree is the plan of action. It details how the interme
diate objectives will be attained thereby overcoming the obstacles facing the implementa
tion of the injections.

TQM

Total Quality Management

TQMII

A multimethodology combination of TOC focusing techniques and Total Quality

Management (Dettmer, 1995).

Underlying Assumption

Part of the Thinking Processes. Concepts and assumptions underlying cause-effect arrows

used in Conflict Resolution Diagrams.

Undesirable Effect (UDE)

Part of the Thinking Processes. Identified when starting to construct the CRT. UDEs are

viewed as being unfavourable results of a system's performance, and the CRT seeks to de
termine the cause of these UDEs.

V-A-T

A classification and analysis system, taxonomy, used to identify common problems in

manufacturing plants of similar types.

V-Plant

Part of V-A-T Analysis. Type V plants are characterised by the existence of divergence

points throughout the production process. One or a few raw materials are transformed by

the production process into many distinct end products.

Wet Tree

A tree, from the Thinking Processes, that has not been scrutinised for validity, using the cate
goriesof legitirnate reservation, by someone trained as a Jonah, or others in the organisation.

Work-in-Process Inventory (WIP)

Partially completed units of production that are either waiting between processes or are

being worked on in a process.

Partial List of Doctoral

Dissertations

and Master's Theses

Doctoral Dissertations
Atwater, Brian. 1991. The Impact ofProtective Capacity on the Output ofan Unblocked Flow
Line Process. Doctoral Dissertation, University of Georgia.

Guide, Vincent Daniel R., Jr. 1992. A Simulation of Present Production Planning and

Control Versus Synchronous Manufacturing at a Naval Aviation Depot. Doctoral

Dissertation, University of Georgia.

Lockamy, Archie III. 1991. A Study of Operational and Strategic Performance Measurement
Systems in Selected World Class Manufacturing Firms: An Examination of Linkages for
Competitive Advantage. Doctoral Dissertation, University of Georgia.
Spencer, Michael S. 1992. Production Planning and Control Systems in Repetitive
Manufacturing: A Comparative Analysis Based on the Product-Process Structure. Doctoral
Dissertation, University of Georgia.
Wahlers, James 1. 1993. A Study ofPerformance Measures in a Synchronous Manufacturing
Environment. Doctoral Dissertation, University of Georgia.
Masters Theses
Balderstone, Steven 1. 1999. Examining the Theory of Constraints: A Source of Operational
and Financial Performance Improvement For Manufacturers. A Thesis. Master of
Management Studies (Decision Sciences), Victoria University of Wellington, New Zealand.
Godfrey, John R. 1997. Synergies Between the Theory of Constraints and Linear
Programming, Master of Management (Organisational Systems), Monash University,
Victoria, Australia.
TOC Internet Resources

Consulting Groups
http://www.aptconcepts.coml
APT Concepts
http://www.goldratt.com/
The Avraham Y. Goldratt Institute
http://www.goldratt.com/australasia
Avraham Y. Goldratt Institute, Australasia
http://www.goldratt.com/brasil
Avraham Y. Goldratt Institute, Brasil
http://www.goldratt.com.mx
Avraham Y. Goldratt Institute, Mexico
http://www.moralestoc.com
Avraham Y. Goldratt Institute Associate
http://www.goldratt.es
Avraham Y. Goldratt Institute, Spain
http://www.toc.co.uk
Avraham Y. Goldratt (UK) Ltd.
http://www.chesapeak.com/
Chesapeake Consulting. Inc.
http://www.prochain.com
Creative Technology Labs
http://www.focusedperformance.com
Focused Performance
http://www.FocusS.mcmail.com/
Focus 5 Systems Ltd, European distributors of Pro Chain
http://www.goalsys.com
Goal Systems International
http://www.hansenassociates.com/
Hansen & Associates
http://www.mst-toc.it
Methods for Systems Training
http://www.tbmcm.com/homepage.htm
McMullen & Associates
http://www.pdinstitute.coml
The Product Development Institute
http://www.smt-toc.com
SMT's web site
http://www.stgamericas.com
STG Americas
http://www.stg.co.uk
STG Scheduling Technology Group Limited
Partial List of Doctoral Dissertations 223
http://members.aol.eom/FStoneEnt/index.html
Fran Stone Enterprises
http://www.tseworld.com
Technology Systems Corporation (TSC)
http://www.thru-put.eom
Thru-Put Technologies
http://www.toee.eornlindex.html
The TOC Center
Academia and Education

http://www.emg-toe.eornl
The Constraint Management Group
http://darkwing.uoregon.edu/-nfargher/sesn18b.html
A University of Oregon TOC page
http://vaneouver.wsu.edu/fae/holt/em526/em526.htm
Washington State University, Dr. James R. Holt
http://bregman.uh.edu/Dr-B/Home.shtml
Dr. B's TOC interactive practice session.
http://www.sytsma.eornlhtrnltheory.htm
Sid Sytsma
http://www.nwfl.net/suerkenltoe/
TOC for Education
http://www.ciras.iastate.edu/toe/index.html
Ciras Constraint Management
http://www.apics.orglsigs/CM/sem3top.htm
The APICS Constraints Management (CM) Special Interest Group
Personal
http://users.aol.eom/easpariO/toe/MAIN.HTM

John Caspari

http://www.srv.net/-Ileaeh/TOC/TO C-top.html

Larry Leach

http://www.rogo.eornleae/

Dave Shucavage

http://www.saigon.eornl-nguyent/toe.html

Tu Dinh Tguyen

http://www.ehief.eo.il/toe/index.html

Resources and information about the Theory of Constraints.

http://www.mtp.semi.harris.eom/

The company at the centre of the case study "Leading the Way to Competitive Excellence."

http://www.eorbett-toe.com/englindex3.htm

Thomas Corbett

http://ourworld.compuserve.comlhomepages/thomas_b_mcmuIlen_jr/theoryof.htm

Thomas McMullen

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The World

Titles in the Series

Securing the Future:

Strategies for Exponential Growth Using the Theory of Constraints

Project Management in the Fast Lane:

Applying the Theory of Constraints

The Constraints Management Handbook

Thinking for a Change:

Putting the TOC Thinking Processes to Work

hy Lisa .I. Scheinkopf

The Theory of Constraints Approach to

Problem Identification and Solutions

The Measurement Nightmare:

How The Theory of Constraints Can Resolve

Conflicting Strategies, Policies, and Measures

The CRC PresslAPICS Series on Constraints Management

Boca Raton London New York Singapore

Library of Congress Cataloging-in-Publication Data

Includes bibliographical references and index.

ISBN 1-57444-276-7 (alk. paper)

I. Production management-Bibliography. 2. Theory of constraint s.

Trademark Notice: Product or corporate names may be trademarks or registered trademarks ,

Visit the CRC Web site at www.crcpress.com

© 2000 by CRC Press

No claim to original U.S. Government works

Why, this book?

books available on TOe. The multi-search approach is indicative of the extent

Map of the book

Apologies to those we've missed

Thanks to those who've helped

bibliography and preparation of the manuscript. Our colleagues at Victoria

Victoria J. Mabin, Ph.D., B.S.e(Hons), Jonah

Steven J. Balderstone, MMS, BCA, NZ Dip. Bus., Jonah

This book is dedicated to

all past, present and future users

of the Theory of Constraints,

Chris, Rebecca, and Emily

Table of TOC Application Data . . . . .. . . .. .. . . . . . . . . . . . . . . .. . . .. . . .. 22

Bibliographies and Abstracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 31

The Theory of Constraints Book List. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 183

Keyword Index.. .. . . 187

Industry Groupings Index. .. 191

Author/Co-Author Index...... 193

Publication Source Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 203

Partial List of Doctoral Dissertations , 221

TOC is also known by various other names, including Constraint(s)

approaches, such as Soft Systems Methodology (SSM) and Strategic Options

A very favourable picture of TOC

The Theory of Constraints (TOC)

Operations Strategy Tools

Net Profit Throughput Throughput Dollar Days

ROI Inventory Inventory Dollar Days

Cash Flow Operating Expense

Where have they been published?

Publications are growing with a big jump in 1998

Distribution of Articles across Journals

Number of Articles on TOe per Journal

60 journals featured a single article on TOC!

A fair degree of duplication

Good ideas not taken up by others

Comparisons with other methods

simulations comparing TOC with other scheduling methods, typically

than the earlier TOC material to problem-structuring and problem solving, a

times (measured by lead-times, cycle times or due date performance) im

and developments include the application of CC in multiproject environ

industry suppliers. The customers place a premium on accuracy and flexibil

well-suited to current market conditions in the aerospace industry. The man

Major U.S. aerospace companies are using a carrot-and-stick approach to ob

Barlevy, Rami. "Theory and Practice of Material Constraints:' APICS