Applying theory of constraints as a continuous improvement tool in a lean environment

Theory of Constraints (TOC), with its five steps for constraint elimination, is viewed as a continuous improvement process. The first step in the TOC methodology is to identify the constraint. In a lean environment, this step is not always trivial. This thesis proposes three new methods for this purpose. The first method, Flow Constraint Analysis, takes a holistic view and evaluates whether the customer's demand is being satisfied. This evaluation is made by comparing the takt times and the cycle times of resources in the manufacturing system in order to identify the constraint(s). The second method, Effective Utilization Analysis, can be employed to pinpoint the location of the system constraint to a specific process or station. The actual production throughput is compared against the ideal capacity of the system to locate the bottleneck. This method is based on the relationship between, work in process (WIP), bottleneck rate and lead time for a constant work in process (CONWIP) system. The third method, Quick Effective Utilization Analysis, can be used when there is little or no historical line performance data available. The second step in TOC is to decide how to exploit the constraint. A non-traditional option for exploiting the system constraint will also be explored in this thesis. This research attempts to perform the exploitation by getting the most from the constraining resource without additional investment.