scroll to top
Stuck on your essay?
Get ideas from this essay and see how your work stacks up
Word Count: 1,602
Introduction Over the last 20 years globalisation of economic activity has greatly intensified competition between manufacturers and this intensification has led many of them in search of new and innovative ways to increase their competitive edge Constraint management also known as TOC Theory of Constraints was one of the new systems that were introduced to help firms improve on their competitive standing Furthermore as the world advances time becomes an even more important factor to companies Customers demand shorter lead time and the window in which companies can launch a new product and capture market share is getting smaller With TOC it focuses not on input nor on output but throughput - the rate at which the system makes money Thus reduction in the time to manufacture and ship a product translate into faster throughput and higher revenues The theory was first put forward by Eliyahu Goldratt who set out to solve seemingly intractable problems in production scheduling Simply put the fundamentals behind the Theory of Constraints is that constraints determine the performance of any system and thus managers should focus on managing the constraints in a system rather that cutting costs We will discuss this in detail later in the article Next we will attempt to compare TOC with respect to other cost tools eg Absorption costing Activity based costing ABC Contribution margin analysis and etc We will concentrate on ABC and contribution margin analysis as these are popular cost techniques that are used and are also covered in out course Finally we will then look at the implementation issues that are associated with TOC The Theory of Constraints TOC is a systems-management philosophy developed since the early 1980s and it emphasizes that constraints are the ones that limit the performance of a system Thus to significantly improve the bottom-line of the company managers should concentrate on these constraints rather than on reducing product costs This is in line with the primary management
@Kibin is a lifesaver for my essay right now!!
- Sandra Slivka, student @ UC Berkeley
Wow, this is the best essay help I've ever received!
- Camvu Pham, student @ U of M
If I'd known about @Kibin in college, I would have gotten much more sleep
- Jen Soust, alumni @ UCLA