22S: Theory of constraints Flashcards
a method of production flow management
optimized production technology (OPT)
compared to six sigma and lean manufactuirng, the theory of constraints concentrates its improvement efforts only on
the operation that is constraining a critical process or on the weakest component that is limiting the performance of the system as a whole
a production process coordinated to work in harmony to achieve the goals in the firm
synchronous manufacturing
Goldratts goal of any firm
the goal of a firm is to make money
2 ways to measure performance
- financial measurements
- operational measurements
3 measures of the firms ability to make money (financial measurement)
- Net profit
- Return on investment
- Cash flow
an absolute measurement in dollars
net profit
a relative measure based on investment
return on investment
a suvival measurement
cash flow
3 operational measurements
- throughput
- inventory
- operating expenses
the rate at which money is generated by the system thorugh sales (goods sold)
throughput
all the money that the systme has invested in purcahsing things it intends to sell
inventory
all the money that the system spends to turn inventory into throughput
operating expenses
money spend
value added
whats the goal of the firm from an operational standpoint
increase throughput while simultaneously reducing inventory and reducing operating expense
all the actions that bring a company closer to its goals
productivity
which is better balanced capacity or unbalanced capacity
unbalanced capacity
the ability to do the next process is dependent on the preciding one
dependent events
the normal variation about a mean or average (when one process takes longer that the average, the next process cannot make up the time)
statistical fluctuation
the normal variation about a mean or average (when one process takes longer thatn the average, the next process cannot make up the time)
statistical fluctuation
any resource whose capacity is less than the demand palced upon it. is a constraint within the system taht limits throughput
bottleneck
what to do if there is no bottleneck
system should be changed to create a bottleneck
the available time for production. this excludes maintenance and other downtime
capacity
any resource whose capacity is greater than the demand placed on it. it therefore should not be working constantly because it can produce more than is needed
nonbottleneck
