Theory of constraints

Given the definitions of throughput, inventory, operating expense and bottleneck as discussed in "The Goal," define these terms in the context of an organization (work, social or religious) of which you are a member.

In a discussion posting (“TOC”), you need to identify the most serious bottleneck that this organization faces and discuss the reasons for its selection. In addition, you should identify the most serious bottleneck this organization faces and apply the five-step process outlined in "The Goal" (p. 301) to break the bottleneck and increase the organization's throughput. (If you purchased the Kindle version, note that the five-step process is discussed toward the end of Chapter 36.)

The organization you select does not have to be engaged in manufacturing. It also doesn't have to be the entire organization. For large organizations, you can select a unit of the organization. It is important that you select an organization or a unit of a larger organization with which you are very familiar.

As a reference, here are the definitions discussed in “The Goal” (as defined by Goldratt and Cox, 2004):

Throughput: The rate at which the system generates money through sales.

Inventory: All the money the system invests in things it intends to sell – including facilities and equipment – which are likely to be sold off as scrap after they obsolesce beyond their useful lives.

Operating Expense: All the money the system spends to turn inventory into throughput.

Bottleneck: The theory of constraints likens each system (i.e., an entire organization or a unit of a larger organization) to a chain, or a network of chains. In any chain there is a weakest link which limits the performance of the entire chain. This weakest link is the system's bottleneck.

Also, please remember to clearly breakdown each of the five steps (e.g., Step 1: What is the bottleneck, etc.) in your conference posting to demonstrate your understanding of TOC.

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