Page 455 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

Chapter
12

Theory of Constraints

12.1 Introduction

For all profit-earning corporations, it is natural that the goal of the cor-
poration is to make as much profit as possible for now and in the future.
Moneymaking is also a process; there is also a process management problem
in running, improving, and possibly redesigning this moneymaking process.
Naturally there are several questions about this moneymaking process:
1. How does this moneymaking process work?
2. What is the determining factor for the capacity of this process?
3. If we want to make more money, what is the most efficient way to
improve the process?
The theory of constraints (Golratt and Cox 1986, Goldratt 1990) tries to
answer these questions. Goldratt and Cox (1986) wrote a book titled The
Goal. This book is in a novel format and describes the life of a plant
manager who struggles to simultaneously manage his plant and his
marriage. The term “theory of constraints” is not mentioned, but the main
ideas of this theory are discussed in bits and pieces. The following terms are
often mentioned in The Goal:
• Bottlenecks
• Throughput
• Inventory
• Return on investment
• Cash flow
• Socratic way
• Fear of change
The Goal also reminds readers that there are three basic measures used in
the evaluation of the moneymaking process:

413
Copyright © 2005 by The McGraw-Hill Companies, Inc. Click here for terms of use.