The Goal and the Theory of Constraints Essay Sample

The Goal and the Theory of Constraints Pages
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Introduction

 The value received from reading ‘The Goal’ is that, a given system at one point or another it will face a constraint.  Most linguists would define a constraint as anything that prevents the system from achieving most of its goals. It is up to the system managers and users to restructure it so that it will continually meet its goal (Jeff et al. 2005). The system managers of the Apple Company restructured the goals of the company to fit the changing times by ensuring that the release of its brand iPhone met market demands. The Theory of Constraints (TOS) is an overall management philosophy that aims to continually achieve more of the goal of a system.

The goal described in the Goldratt Eliyahu M and Cox in his book “The Goal” is that a system should always achieve its goal if at all it’s to remain relevant to the organization. Therefore the managers of Apple should ensure a good marketing strategy that aims at achieving the goals of the company despite the many challenges that the market may pose (Jeff et al. 2005). For Apple Company to continually achieve their set goal then they should ensure that their system is up- to –date. However, according to the theory any given system will always find itself limited by a certain constraint in achieving its goal.

As managers of the company concerned with the system of achieving the goals of the company, they should therefore ensure that they restructure the system so that it overcomes the constraint (Jeff et al. 2005).

Lessons learned from the theory.

The following lessons are learned from the theory of constraints.

  • Commonly, system would not have many constraints.
  • Only a few constraints in any given system would show up.
  • Constraints can be classified as either internal or external.

In internal case, the system production cannot meet the demands in the market. If such a case occurs Apple Company should see to it that it identifies the constraint and uproots it as soon as possible. Alternatively, the managers of the company can subdue the constraint so that the supply of the system can meet the market demand.

Internal constraints to a system include;-

  1. The availability of equipments as well as the way the available one is used for instance; poor use or misuse of the equipment can limit the ability of the system to produce the expected good or services (Jeff et al. 2005). Therefore managers of the Apple Company should ensure that avoid the misuse of the equipments in their system.
  2. Lack of skilled personnel can to a great extend limit a given system. Sometimes the users of the system can develop a negative attitude towards the system for instance; if the system is a threat to their jobs or if it’s a health hazard. Apple should have skilled manpower in place.
  3. An organization may have existing policies which can also hinder the system from producing more or less.

From the external case, the system actually does the opposite of internal constraint. The system produces more than the available market can accommodate (Jeff et al. 2005). If this occurs the management of the system identifies the constraint and then they should workout a modality to create more demand for its products and services. In so doing one will be removing the constraint.

External constraints ca be caused by;-

  • Change in the economy.
  • Change in price of other related or substitute goods or services.

Application areas of the theory

The TOC Theory can be applied in

  1. Operation,
  2. Supply chain logistics
  3. Finance and accounting
  4. Sales and marketing
  5. Manufacturing operation

In the field of manufacturing the TOC Solution ensures that materials are pulled together in the particular system that a company adopts rather than forcing the system to accept the materials. If the Apple Company puts this into consideration in its manufacturing sector, it will have the right gear towards the utilization of materials. In supply chain logistics the TOC solution can be used to move to proxy to consumption model rather than the forecast model (Jeff et al. 2005). In this case Apple Company can opt for TOC Distribution or TOC- Vendor managed inventory.

In finance and accounting the TOC solution can be used in finance application where by critical thinking will be involved (Through accounting). When used in finance application, if a solution is obtained, it calls for one to evaluate the impact of investment throughout a particular business such as the investment of the iPhone by the Apple Company. According to Jeff et al. (2005) operating expenses and investment most act as the key measures of the theory of constraints in finance and accounting. Throughput can be calculated from (sales- total variable cost). In project management TOC can be used in critical chain project management. The idea of project management is developed from the fact that all projects looks A- plants all converge to a final deliverable. There must be internal buffers to protect synchronization points and a final project buffer to protect the overall project (Jeff et al. 2005).

In conclusion, The Goal and the theory of constraints go hand in hand in every business setup (Jeff et al. 2005). Apple Company must set up their goals bearing in mind that a constraint shall be experienced along the way of realizing their goals.

Reference

The Goal, Goldratt, Eliyahu M. and Cox, Jeff, (2005), North River Press, ISBN-0-88427-178-1

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