Premium Essay

Applying Toc to Services

In: Other Topics

Submitted By Muralee
Words 2659
Pages 11
Abstract
Theory of constraints (TOC) is about thinking in logical, systematic, or structured processes similar to the PDCA learning loop and also about analyzing cause and effect, verifying basic assumptions, exploring alternatives and process improvement. The goal of TOC is to maximize the efficiency of a process selectively at the most critical points (constraints) and thereby maximize profitability. The purpose of this paper is to provide a comprehensive descriptive study on applying “Theory of Constraint” principles in improving the effectiveness of the service process that was limiting the entire service system. We have studied based on Schmenner’s classification of service organizations into four quadrants of service process matrix. Clear explanations supplemented by examples for each quadrant define how the theory works, why it works and what issues are resolved and what benefits are accrued.
Introduction
Operations management of services talks about how to plan, execute and improve service delivery so that more services are delivered faster and reliably with same/similar resources without compromising on quality. Services, in general, can be any of – Public Services, Professional Services, IT Services, Healthcare services, Banking/Insurance etc. Theory of Constraints, as proposed by Eli Goldratt, works well in a Manufacturing setup, but to replicate in a Service model requires adaption more than adoption. It should be accepted that trying to force a service organization into a factory model never quite delivers the results promised.
Service Organization broadly falls into two sub-categories – One that involves physical good and one that doesn’t. Information only service doesn’t involve physical goods and should be handled with utmost care. When we try to force an information-only organization into a manufacturing model we create processes where processes...

Similar Documents

Premium Essay

Prison Gangs in Canadian Prisons

...problems facing correctional staff and administrators. Does every gang pose the same threat towards the Canadian correctional system? This study is an attempt at comparing the various gang members admitted into the correctional system between January 1, 2006 and August 31, 2009. It examines the offence-related characteristics of 1,636 gang members compared to 1,649 non-gang member counterparts. The 5 distinct types of gangs studied are: Aboriginal, Asian, street, outlaw motorcycle (OMG), and traditional organized crime (TOC). This study revealed that there are, in fact, distinct characteristics to each gangs conduct in the correctional system: Aboriginals have highest misconduct, highest rates of previous incarceration; street gangs were similar in violence but had less previous prison sentences; OMG had lower involvement in violent offences, but had longest sentences. Aboriginal gangs being the most violent, then Asian and street, followed by OMG gangs and TOC as the least. The closer examinations of these security threat groups (STG) suggest that the correctional system should imply different strategies to counter prison misconduct with gangs. Instead of aiming at suppressing the gangs, efforts should be more focused in a rehabilitative manner, taking into account the different characteristics of each STG. Introduction The studies reported in the article “Are All Gangs Equal Security Risks? An Investigation of Gang types and Prison Misconduct” by Ruddel, R.,...

Words: 2013 - Pages: 9

Premium Essay

Theory of Constraints

...implemented the Theory of Constraints (ToC) continue to thrive and grow in difficult times, continuing to achieve real bottom line growth, whether by improving productivity or increased revenues. Since 1985, the Theory of Constraints has been delivering startling tangible results to companies worldwide. An independent study of Theory of Constraints implementations around the world found that huge results were consistently achieved: Lead Times Reduced 69% Cycle Times Reduced 66% Due Date Performance Improved 60% Inventory Levels Reduced 50% Revenue / Throughput Increased 68% This is a system improvement tool, which states that every system has one goal and it is achieved by many linked processes and out of those processes, one process acts like a bottleneck. So, this theory is utilized in order to remove that bottleneck and ultimately achieve higher productivity. Commonly these bottle necks can be easily understood by the example of assembling operation. There are 5 stations; each station has different times for assembling e.g 40 minutes, 50 and 60 minutes. Out of these stations, station with maximum operation time will be considered as bottleneck station, because at this station, a queue will be generated and ultimately it will affect productivity of system.  Concept of Theory of Constraint was given by Eliyahu Moshe Goldratt. Basically he was a physicist and work on production system design.  There are many benefits of TOC application, like * Enhanced......

Words: 1247 - Pages: 5

Premium Essay

Movie Theater

...| Evaluation Procedures | Course Description | Grading Scale | Course Objectives | Course Outline | Course Delivery Method | Policies | Course Materials | Academic Services | Selected Bibliography | Instructor Information | Instructor: Dr. Elliott S. Lynn (Bio) Email: Elliott.lynn@mycampus.apus.edu Phone: 732.300.5569 Office Hours: By Appointment Only TOC Course Description (Catalog) | Telecommunications networks are a critical component of the global economic and social infrastructures. Securing critical infrastructure is an established priority within Information Security Management. This course examines the field of secure telecommunications networks, including emerging threats, system vulnerability, network evolution, and network defense mechanisms. [3 Semester Hours] TOC Course Objectives | A successful student will fulfill the following learning objectives: * Examine the principles of network security and cellular architecture. * Evaluate emerging threats and system vulnerability. * Assess vulnerabilities in telephony, short messaging service (SMS), cellular data networks, and in Voice over IP (VoIP). * Identify the open questions posited by network evolution and defense mechanisms. * Evaluate the......

Words: 2817 - Pages: 12

Premium Essay

Makalah Le High Steel

...Prakash 2011PGP907 Upasana Mukherjee 2011PGP922 Vemb V 2011PGP932 The task is to evaluate the best costing alternative for Lehigh steel. For this, an improvised costing system is developed which overcomes the assumptions of ABC and TOC costing and the optimum product mix for Lehigh Steel is calculated using the same Executive Summary Lehigh Steel is a manufacturer of speciality steels for high strength, high use applications. Its financial performance has generally trended wit but outperformed the industry as a whole. Following the general recessionary trend of the market, Lehigh Steel reported record losses in 1991 after posting record profits in 1988. This had led to an increasing need to rationalizing Lehigh Steel‟s product mix. Traditionally, Lehigh Steel has followed Standard Cost Method for cost accounting. Jack Clark, CFO of Lehigh Steel has given Bob Hall the task of implementing Activity Based Costing at Lehigh Steel. Mark Edwards, Director of Operations and MIS explored the implementation of Theory of Constrains (TOC) accounting for Lehigh Steel. The task is to evaluate the best costing alternative for Lehigh steel. For this, an improvised costing system is developed which overcomes the assumptions of ABC and TOC costing and the optimum product mix for Lehigh Steel is calculated using the same. Situation Analysis Company Analysis Founded in 1913, Lehigh Steel enjoyed a niche position as a manufacturer of speciality steels for high ......

Words: 4202 - Pages: 17

Premium Essay

Six Sigma Approach

...improvement, and a conceptual model is proposed that is consistent with the literature and has potential to support such an introduction. Although rooted in the supply chain realm, SCOR adherents see a role for the methodology as the gatekeeper – identifying the projects most likely to render ROI using SCOR, Lean or Six Sigma. There is already a natural link between Lean and Six Sigma at the program and project execution level. The model integrates the Balanced Scorecard, SCOR model (Supply Chain Reference model) and Six Sigma DMAIC (define, measure, analyse and improve) methodology in a two-level framework. This is a strategic-level cycle, developing focused projects to generate maximum business benefit, and an operational-level cycle, applying Six Sigma and lean tools in a DMAIC cycle to deliver supply chain improvements. Cautions and requirements for the success in practice of such a model are discussed and it is concluded that the model should be tested in practice to validate and develop further the methodology. Keywords: Six Sigma; Supply...

Words: 1950 - Pages: 8

Premium Essay

A Recall: a Lesson Learned from Project Management

...A recall: A lesson learned from Project Management First of all, a Project Management is defined as “the application of knowledge, skills, tools and techniques to project activities to meet project requirements”. A project is a one-time effort that produces a specific result, for example, a building or a major new computer system. This is in contrast to a program, which is 1) an ongoing process, such as a quality control program, or 2) an activity to manage a series of multiple projects together. In some countries, the term “program” refers to a software tool and the term ”programme” and can mean a TV or radio show. Project managers play a key role in helping projects and organizations succeed. They also own the plan. Plans can change. Having to change a plan does not mean you are not a good planner. But don’t change the plan just because! People, are the most important to know about plans projects, and project management. It is people who execute the plan. Good management of people will lead to successful projects. Understand each team member. Match roles to people. Gain people respect. Use your knowledge, not your power. Recognize the people needs and their long term development goals. Try to agree tasks and goals not mandate them. Leadership is not management. Customers are people too. Manage them too. If there is bad news, don’t hide them; deal with them and as long as possible try to communicate with your people. Scope, try to define the project scope as clearly as......

Words: 906 - Pages: 4

Premium Essay

Managers in the 21st Century

...Abstract Being a good manager is more difficult now than it ever has been. The corporate environment has changed dramatically over the past decade. Companies are more global and the employee culture is more diverse than ever before. Organizational structures are less bureaucratic more collaborative (Brown, nd). Today’s companies are full of technological distractions that would have been unimaginable to the 20th-century. The goal of a good manager is to achieve excellent results through planning, organizing, leading, and controlling (Jones and George, 2011). Managers are key elements as they are the ones who handle the most difficult company resource; people. An effective manager needs three kinds of skills, conceptual, human, and technical to help the organization perform more efficiently and effectively. All three skills can be learned by developing certain characteristics or personal traits. Traits such as having a clear vision, learning to delegate work, opening communication, spending time in developing skills, providing continuous feedback, rewarding employees, enjoying what you do, educating more, solid organizational skills, employing excellent ethics behavior, and being a great mentor and motivator. Along personal traits a manager needs to understand environmental factors that strongly influence modern organizations that are important to the company’s success. Parallel to these traits and environmental forces management’s approach has changed. Managers......

Words: 6699 - Pages: 27

Premium Essay

Hsbc Operational Management Report

...ASSIGNMENT 2 by (Name) Course Tutor University City and State Date Executive Summary HSBC bank is a financial institution, whose conceptualization age dates back to 1865 in Hong Kong. Commonly known as the HSBC Holdings plc, the multinational bank expanded and it opened other branches in several countries while offering financial and banking services. With its headquarters located in London, the bank is ranked as the fourth largest in the world. In Oman, however, the experienced problems within the bank are not what one would expect from a financial institution with such a reputation. Since its establishment in 1948, the bank has always offered top-notch services with fewer mistakes in Oman. Currently, there have been reports that the country is experiencing problems with their ATM machines. Customers are unable to use their ATM cards to access their accounts. The administrative sector is also having problems involving registration of clients to their newly introduced Advance Credit cards. The process has become strenuous for its customers. This study aims at identifying the problems and resolving it through operations management theories in gaining global competitiveness. According to the theories of operations management, organizations can solve their problems in three distinct ways. The six-sigma approach suggests identifying the defects and solving them afterwards. The lean approach, similarly advocates for the identification of......

Words: 3423 - Pages: 14

Premium Essay

Wiki

...The Theory of Constraints is the name given to a series of decision making techniques first created by Dr. Eliyahu M. Goldratt beginning around 1980 and later applied and augmented by a number of others. The Theory of Constraints has been applied to production planning, production control, project management, supply chain management, accounting and performance measurement, and other areas of business as well as such not-for-profit facilities as hospitals and military depots. It has also been applied to decision making in educational settings. Dr. Goldratt holds a Ph. D. in physics; he has often stated that in developing the Theory of Constraints he is applying the techniques of the hard sciences, such as cause-and-effect analysis, to soft sciences such as business management. The Theory of Constraints states that constraints determine the performance of a system. A constraint is anything that prevents a system from achieving a higher performance relative to its goal. A system is any collection of interconnected parts sharing a common goal. The Theory of Constraints was first applied to business systems. Dr. Goldratt defines the goal of a for-profit business as to make more money now and in the future. This definition is in keeping with the traditional definition of the goal of a business which is to maximize the owners’ or stockholders’ wealth. Constraints may be resource constraints such as a person or department that cannot keep up with market demand. If this department......

Words: 7588 - Pages: 31

Premium Essay

Theory of Constraints

...Contributors 1.00 - John Blackstone * John Blackstone, University of Georgia The Theory of Constraints is the name given to a series of decision making techniques first created by Dr. Eliyahu M. Goldratt beginning around 1980 and later applied and augmented by a number of others. The Theory of Constraints has been applied to production planning, production control, project management, supply chain management, accounting and performance measurement, and other areas of business as well as such not-for-profit facilities as hospitals and military depots. It has also been applied to decision making in educational settings. Dr. Goldratt holds a Ph. D. in physics; he has often stated that in developing the Theory of Constraints he is applying the techniques of the hard sciences, such as cause-and-effect analysis, to soft sciences such as business management. The Theory of Constraints states that constraints determine the performance of a system. A constraint is anything that prevents a system from achieving a higher performance relative to its goal. A system is any collection of interconnected parts sharing a common goal. The Theory of Constraints was first applied to business systems. Dr. Goldratt defines the goal of a for-profit business as to make more money now and in the future. This definition is in keeping with the traditional definition of the goal of a business which is to maximize the owners’ or stockholders’ wealth. Constraints may be resource constraints such......

Words: 7150 - Pages: 29

Premium Essay

Individual Taxation

...CHAPTER 3 INDIVIDUAL TAXATION Individual Taxation—An Overview[->0] OBJECTIVES After completing Chapter 3, you should be able to: 1. Understand the components of the tax formula. 2. Apply the standard deduction to each filing status. 3. Determine whether an individual qualifies as a personal exemption. 4. Distinguish among the five different filing statuses. 5. Apply the tax tables and the tax rate schedules to taxable income. OVERVIEW This chapter discusses the components of the tax formula and studies the implications of the standard deduction to the taxpayer. Additionally, the qualifications for the personal exemption are analyzed. Finally, the basic filing statuses are examined as well as the role of the tax tables and the tax rate schedules. ¶3001 COMPONENTS OF THE TAX FORMULA[->1] Taxable income is computed using one of the two overall accounting methods, the cash method or the accrual method. It is also possible to use a combination of the two overall methods. Under the cash method, income is reported when it is received and deductions are taken when the expense is paid. The accrual method requires income to be reported when all the events necessary to fix the right to receive payment have occurred and there is reasonable certainty regarding the amount. Likewise, accrual basis taxpayers usually claim a deduction in the year in which all events that fix the liability have occurred, provided the amount of the liability is reasonably determinable. A basic......

Words: 15716 - Pages: 63

Premium Essay

Idnfiwef

...ABSTRACT Critical Chain Project Management: An Overview Christopher Aitken Director: Elisabeth Umble, Ph.D. The purpose of this thesis is to introduce to the reader Critical Chain Project Management, which is the application of the Theory of Constraints (TOC) process to project management. Eli Goldratt describes the process in the book Critical Chain. Applying Critical Chain protocol will improve the projects due date performance and the quality of deliverables, whatever the project or circumstance. To prove these claims this document explores specific case studies of recent implementations of Critical Chain. It then goes back to look at the history of project management and some of the innovations that led to Critical Chain, including an in depth look at Theory of Constraints. It concludes by exploring the TOC approach to causing change in thinking processes and how this would be done for Critical Chain. This document is written to be accessible to any reader regardless of the level of prior exposure to the Theory of Constraints. APPROVED BY DIRECTOR OF HONORS THESIS: ______________________________________________________ Dr. Elisabeth Umble, Department of Management APPROVED BY THE HONORS PROGRAM: __________________________________________________ DATE: _______________________ CRITICAL CHAIN PROJECT MANAGEMENT: AN OVERVIEW A Thesis Submitted to the Faculty of Baylor University In Partial Fulfillment of the Requirements for the Honors Program By......

Words: 8356 - Pages: 34

Premium Essay

War on Terrorism

...EXECUTIVE SUMMARY Driven by the need for organizational change, management accounting techniques have developed and proliferated at an unprecedented rate in the last few decades. Some critics, however, have charged that the changes are a "reinvention of the wheel" every few years. To put these issues in perspective, let's look at a framework created to illustrate the distinctive nature of these techniques in an organizational change context. The framework considers such factors as user resistance and organizational culture that can influence the applicability and implementation success of the techniques. After tracing the history of management accounting beginning in 1850, accounting scholar Robert S. Kaplan comments, "Despite considerable change in the nature of organizations and the dimensions of competition during the past 60 years, there has been little innovation in the design and implementation of cost accounting and management control systems." (1) All the practices employed by companies and described in management accounting textbooks had apparently been developed by 1925, despite major changes in the nature and operations of organizations. To develop the field of managerial accounting, Kaplan and others encouraged academics to conduct field research and case studies "to describe and document the innovative practices that seem to work for successful companies." (2) The pendulum swung in the other direction over the next decade as a plethora of new "techniques"......

Words: 3080 - Pages: 13

Premium Essay

Total Quality Management

...Factors Affecting Prices Pricing Models for Not-for-Profit Organizations 3 4 5 5 6 7 8 9 10 11 11 Page Chapter Two: Total Quality Management (TQM) – an Introduction and Its Applications Chapter Three: Conclusion Appendix 1: References 12 23 CHAPTER ONE: INTRODUCTION TO CONTEMPORARY MANAGERIAL ACCOUNTING CONCEPTS Over the years, the managerial accounting practices had evolved. From the traditional costing method, many firms now have adopted the contemporary managerial practices to achieve better product costing and manufacturing processes. There are many contemporary managerial accounting in practice, some of them being Value Chain, Just-In-Time (JIT) Manufacturing, Total Quality Management (TQM) and the Theory of Constraints (TOC). All of the mentioned concept will be explained in brief in this chapter. Other than that, Target Costing will also be highlighted in brief. Kaizen Costing, a Japanese concept adapted by the westerners, will also be introduced. This chapter will also touch on life cycle costing (LCC), pricing methods, uses and limitations of cost-based price & market based price, factors affecting prices...

Words: 6580 - Pages: 27

Premium Essay

Ocean

... 6.Activity based costing/Target costing Mechanism for determining selling prices. It is a cost management tool. TATA tries to manufacture a car at Rs. 1 ,00,000. – is a typical example for target costing.  42. Stages of target costing 1. Determine the target price which customers will be prepared to pay for the product 2.Deduct a target profit margin fro the target price to determine the target cost 3. Estimate the actual cost of the product 4.If estimated actual cost exceeds the target cost , investigate ways of driving down the actual cost to the target cost  43. Target costing-Continues Customer oriented approach Used by Japanese copanies and recently adopted by Europe and the USA. Recently call canters are trying to adopt this as Indian currency strengthened.  44. Procedures: 1.Market research to find the customer’s perceived value-tear down analysis-examining the competitors’ products-dismantling of the competitor's product.use value engineering 2.How customers differentiate the product from the competitors 3.Target profit margin depends on planned return on investment and fix % of profits on sales 4.Decomposed into a target profit for each product. 5.Deduct the target profit from target price 6.Compare with the predicted actual cost. 7. If predicted cost>target cost then efforts are made to close the gap.  45. What is required? Team approach Team members include: 1.designers 2. engineers 3. Purchasing 4. manufacturing 5. marketing 6. management......

Words: 5242 - Pages: 21