Theory of constraints

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Theory of constraints: a theory for operations management
Mahesh C. Gupta and Lynn H. Boyd
College of Business, University of Louisville, Louisville, Kentucky, USA
Purpose – The purpose of this paper is to suggest that the theory of constraints (TOC) can serve as a generaltheory in operations management. The paper first investigate linkages between TOC and the core concepts/components of operations management (OM) and show how OM concepts can be integrated with TOC using examples from the published TOC literature. A second important purpose is to show that TOC, as a theory, has properties essential for a good theory. Design/methodology/approach – Using a commonlyaccepted categorization of operations decisions (process, quality, inventory and capacity), traditional views, and approaches to operations decisions to those inherent in the TOC are compared. Findings – The paper concludes that the TOC provides approaches to operations decisions that avoid pitfalls of local optimization by reaching across functional boundaries in organizations. In addition, whilethe TOC appears to meet the criteria of a good theory, it has not been empirically tested for the most part. Originality/value – The TOC can serve as a unifying theory or theme for operations management, providing new insights for researchers and an organizing principle for teachers. Keywords Operations management, Management philosophy Paper type Conceptual paper

Theory of constraints

991Received October 2006 Revised December 2006, December 2007, May 2008 Accepted May 2008

1. Introduction In the quest to improve manufacturing performance, a number of broad-based operations management philosophies, e.g. total quality management (TQM), just-in-time (JIT), or lean manufacturing (LM), theory of constraints (TOC), and more recently, six sigma (SS) and supply chain management (SCM)have been proposed in the literature and are being implemented in practice. It is widely held that the successful implementation of these philosophies requires systems thinking, functional integration, and flatter organizational structures. From the operations manager’s perspective, these practices require managers to work on cross-functional implementation teams and participate in cross-functionaldecision-making processes. To do so, managers need a common language, the language of theory (Handfield and Melnyk, 1998). Areas such as marketing, finance, strategy, and organizational behavior are well grounded in theory-development methods but the need for theory-building, testing, and modification in operations management (OM) has been widely recognized (Meredith et al., 1989; Flynn et al., 1990;Swamidass, 1991; McCutcheon and Meredith, 1993). Westbrook (1995) suggested that OM academics must embrace creative tension between theory and practice and must develop new theories from the observation of actual practices. Theory development remains the most fertile research area in the field of operations management (Westbrook, 1995; Pannirselvam et al., 1999). A number of attempts have been madeto develop and propose theories and theory-like principles of

International Journal of Operations & Production Management Vol. 28 No. 10, 2008 pp. 991-1012 q Emerald Group Publishing Limited 0144-3577 DOI 10.1108/01443570810903122

IJOPM 28,10


operations management. These attempts include: trade-off theory (Skinner, 1969), the process-product matrix (Hayes and Wheelwright, 1979),the customer-contact model (Chase and Tansik, 1983), the TOC (Goldratt and Cox, 1984; Boyd and Gupta, 2004), the cumulative theory (Ferdows and DeMeyer, 1990), the theory of production competence (Cleveland et al., 1989; Vickery, 1991), priority management theory (Westbrook, 1994), the theory of TQM (Flynn et al., 1994; Handfield and Melnyk, 1998), the theory of swift and even flow, and the theory...
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