theory of constraints

theory of constraints

Length: 472 words (1.3 double-spaced pages)

Rating: Excellent

Open Document

Essay Preview

More ↓


Background

Eastern Financial Florida Credit Union is the largest credit union in South Florida. The last three years have been intensive with rates dipping to there lowest in 40 years. Because of this, 92% of mortgage holders had economic reasons to refinance.
     Eastern exists to achieve goals to improve member service, work performance and increase profitability; however, certain factors limit their capacity to manage constraints and they needed help.

Eastern Weak Links

Eastern needed help because they were faced with a bottleneck/constraint of having more loan applicants than they were able to timely process so they decided that the problem can be eliminated by implementing Theory of Constraints (TOC) drum-buffer rope and five focusing steps. Other weak links that need to be addressed are:

·     Inability to commit to closing dates
·     A lot of work in process in the system
·     Lead times too long
·     Constantly shuffling priorities
·     Too much expediting
·     Stressful work environment
·     Difficulty in responding to urgent member requests
·     Overtime doesn’t increase profits
·     Outsourcing doesn’t solve the problem

TOC is based on the fact that all businesses operate with constraints or bottlenecks, which disable the progress or success of a company. By identifying the bottleneck, the entire operation is strengthened.

Drum, Buffer, Rope (DBR)
Eastern uses this view in managing constraint along with the five steps. Using DBR assures that the company is running the right thing at the right time.

Five Focusing Steps
·     Identify
·     Exploit
·     Subordinate
·     Elevate
·     Inertia
Identify/Drum
Since we just reviewed the weak links, we must seek and destroy the bottleneck. Identifying the drum/constraint is critical to the theory of constraints. Eastern identified the constraint to be in the underwriting department.
Exploit/Buffer
To exploit the constraint, Eastern puts all efforts toward maximizing the area that is causing the problem, which is underwriting. Eastern provided enough work in process files to protect the systems deliverables (closing and delivery dates), which is related to the buffer. The buffer tells two things: when too much material is in the buffer and not enough. The system assures that underwriting is protected with work in process files, which is the amount of material in the buffer. This pre-determined amount of work is the rope.

Subordinate
Subordinating involves training others to improve the constraints area; Eastern provides the protection for all resources to underwriting and provides cross training and backups to the department; this assures that the constraint is operating continuously.

How to Cite this Page

MLA Citation:
"theory of constraints." 123HelpMe.com. 21 Nov 2018
    <https://www.123helpme.com/view.asp?id=93636>.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Theory of Constraints Essay

-   Table of Contents I. Introduction 2 II. Then Why Do Most CI Programs Produce Such Disappointing Results? 2 The Improvement Conflict What’s wrong with the traditional approach. Resistance to Change: The Reasons for Unsatisfactory Results. III. TLS ­ Theory of Constraints Lean Six Sigma 8 The TLS Process: IV. Results of TLS: 11 Sanmaina-SCI DOE results: Tata Steel Results: V. The Path Forward – Implementing TLS 13 VI. TLS Summary: A Synergetic Solution 14 VII. TLS Benefits: 14 VIII. Bibliography 15 Introduction Many organizations struggle with their continuous improvement (CI) efforts; real bottom line results, whether in cost savings or increased revenues, just never materialize...   [tags: business, improvement programs]

Research Papers
2449 words (7 pages)

Essay on Theory of Constraints

- Theory of Constraints The Theory of Constraints is an organizational change method that is focussed on profit improvement. The essential concept of TOC is that every organization must have at least one constraint. A constraint is any factor that limits the organization from getting more of whatever it strives for, which is usually profit. The Goal focuses on constraints as bottleneck processes in a job-shop manufacturing organization. However, many non-manufacturing constraints exist, such as market demand, or a sales department’s ability to translate market demand into orders....   [tags: Business Management Marketing Profit Essays]

Research Papers
1667 words (4.8 pages)

Essay on theory of constraints

- Background Eastern Financial Florida Credit Union is the largest credit union in South Florida. The last three years have been intensive with rates dipping to there lowest in 40 years. Because of this, 92% of mortgage holders had economic reasons to refinance. Eastern exists to achieve goals to improve member service, work performance and increase profitability; however, certain factors limit their capacity to manage constraints and they needed help. Eastern Weak Links Eastern needed help because they were faced with a bottleneck/constraint of having more loan applicants than they were able to timely process so they decided that the problem can be eliminated by implementing Theory of Co...   [tags: essays research papers]

Free Essays
472 words (1.3 pages)

Theory of Constraints Essay

- Theory of Constraints and its Thinking Processes - A Brief Introduction ________________________________________ Preface The core constraint of virtually every organization The Goldratt Institute has worked with over the past 16+ years is that organizations are structured, measured and managed in parts, rather than as a whole. The results of this are lower than expected overall performance results, difficulties securing or maintaining a strategic advantage in the marketplace, financial hardships, seemingly constant fire-fighting, customer service expectations being rarely met, the constraint constantly shifting from one place to another and chronic conflicts between people representing diff...   [tags: Business]

Research Papers
1879 words (5.4 pages)

Management Approach: The Theory of Constraints by Eliyahu M Goldratt Essay example

-   Executive Summary In this research assignment, I will be discussing about the Theory of Constraints (TOC), the literature review about the TOC, that is, what the literature and other authors are saying about this topic. I will also discuss the evidence of the practice of the TOC. Finally, in conclusion I will sum up the findings of my research.   Table of Content Executive Summary 2 Table of Content 3 1. Introduction 4 1.1. Theory of Constraints 4 1.2. Background 4 2. Literature Review 5 3. Case Study: US Army recruiting 6 4. Conclusion 7 5. Referencing 7   1. Introduction 1.1. Theory of Constraints Theory of constraints (TOC) is a systematic management approach that focuses on...   [tags: firms´progress, improvement tool]

Research Papers
2374 words (6.8 pages)

The Goal by Dr. Eli Goldratt and Jeff Cox Essay

- The Goal: A Process of Ongoing Improvement by Dr. Eli Goldratt and Jeff Cox is a fictitious novel based on very real business practices. Goldratt and Cox’s writing focuses on a non-traditional approach to introducing Goldratt’s own Theory of Constraints. The plot centers around Alex Rogo and his journey to find solutions to save both his manufacturing plant and marriage. The story begins when Alex’s boss, Bill Peach, pays him a visit. The reader is told that Alex currently works as the project manager of UniCo, located in his hometown of Barrington....   [tags: Theory of Constraints, SMART]

Research Papers
2546 words (7.3 pages)

Are Financial Constraints an Important Determination in a Firm's Behavior

- ... in 2004, the author proposed that use cash flow sensitivity of cash to replace investment-cash flow sensitivity to further verify that cash flow sensitivity of cash is an important determinant of firm behavior. The contribution of this is to further verify Gomes’s theory and develop a new link between financial constraints and firm behavior. This finding is very important to for understanding how financial constraints can determine firm behavior. Hypothesis     Previous study proposed that when firms face a strict financing constraints, the firms are with a high investment – cash flow sensitivity....   [tags: investment, cash flow, manufacture]

Free Essays
690 words (2 pages)

Biological Constraints on Learning Essay

- Learning is defined as a “process of change that occurs as a result of an individual’s experience” (Mazure, 2006). Researchers assume that the process of learning follows certain general principles, which were developed, into the general process learning theories. These include operant conditioning and classical conditioning which has been put forward by leading psychologists like Pavlov, B.F.Skinner and Thorndike. However, in learning, operant and classical conditoning are opposed by biological constraints that state that there are limitations to the theories....   [tags: Education, Learning]

Research Papers
1333 words (3.8 pages)

Piaget 's Theory Of Psychology Essay

- Introduction Piaget 's theory of psychology is the core of "genetic epistemology." The main study of human cognition (cognitive, intellectual, mental, psychological occurrence and structure).He believed that human knowledge, no matter how profound, and complex; it always can be traced back to the era of people 's childhood. It can even be traced back to the embryonic period. After the child is born, the study will focus on understanding how the formation of intellectual thinking is developed, how it is subject to the constraints of certain factors, its internal structure, the variety of intelligence and thinking how different levels of the structure has appeared....   [tags: Jean Piaget, Theory of cognitive development]

Research Papers
770 words (2.2 pages)

My Own Theory Behind Nursing Essay

- Developing a philosophy takes time and is cultivated from many different sources. When working to establish my own theory behind nursing I have determined that the original basis of my philosophy steams from my childhood experiences. As a child growing up in a family with three other siblings, chaos was often guaranteed to occur on a daily basis, but I always worked happily to help my parents diffuse the numerous problematic situations that erupted. From a young age I was identified as the caretaker of my siblings, as a result of always being left in charge of my two younger sisters and one older sister....   [tags: Nursing, Nurse, Nursing theory]

Research Papers
1325 words (3.8 pages)

Related Searches



Elevating
Elevating the system requires document improvement and at Eastern files are now released so that they accumulate where they have protection. Also, multi-tasking was replaced with single tasking.

Inertia
With inertia, Eastern must celebrate success and identify new challenges for continuous improvement, which is why the company plans to add resources and work on the process of on-going improvement to further shorten lead time through the system and continue to improve member services.

Return to 123HelpMe.com