How might a company's decision to implement Theory of Constraints impact employees?
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1. How might a company's decision to implement Theory of Constraints impact employees?
2. How can managers more effectively use budgets to manager their day-to-day operations?
3. What information do managers need to prepare a useful budget?
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Solution Summary
Response is 1,056 words plus six references. Includes a discussion of steps for identifying, exploiting and managing the systems constraints.
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1. How might a company's decision to implement Theory of Constraints impact employees?
The Theory of Constraints of Eliyahu Goldratt is a model that is the practical result of Eli Goldratt's work on "how to think". The Theory of Constraints (TOC) is an overall philosophy developed by Dr. Eliyahu M. Goldratt, usually applied to running and improving an organization. TOC consists of Problem Solving and Management/Decision-Making Tools called the Thinking Processes (TP).
In a number of books, Goldratt described certain thinking processes and their applications. Theory of Constraints is concerned with "Identification of Constraints & Bottlenecks" which will help management to improve the profitability of the organization. Central to the concept of TOC is the acknowledgement of cause and effect. The Thinking Processes of TOC give us a series of steps which combine cause-effect and our experience and intuition to gain knowledge. TOC is a verifiable philosophy. By knowing how to think, we can better understand the world around us; by better understanding we can improve.
TOC is applied to logically and systematically answer these three questions essential to any process of ongoing improvement:
* "What to change?"
* "To what to change?"
* "How to cause the change?"
These are the original Goldratt "process of ongoing improvement" (POOGI) steps for identifying, exploiting and managing the systems constraints, whether the system is manufacturing, distribution, sales, or project management.
1. Identify the system's constraint(s).
2. Decide how to exploit the constraint(s).
3. Subordinate everything else to the above decision.
4. Elevate the constraint.
5. If, in any of the above steps, the constraint has been broken, go back to Step ...
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