Essay PreviewMore ↓
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
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.
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.
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
"theory of constraints." 123HelpMe.com. 15 Sep 2019
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- The theory of constraints (TOC) focuses on using organizational change techniques in order to increase company profits. Goldratt (1984) introduced the theory of constraints in a business novel titled, The Goal. The TOC states that all companies have one constraint that prohibits them from reaching strategic goals or objectives (Aryanezhad, Badri, & Rashidi-Komijan 2010; Gupta, & Boyd, 2011). The TOC was derived from optimized production technology (Fry, Cox, & Blackstone, 1992). In 1990, the basic principles of the theory of constraints were established (Ronen & Starr, 1990).... [tags: theory in practice, recession, hiring process]
1850 words (5.3 pages)
- 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]
2449 words (7 pages)
- 1. Introduction This report examines the theory of constraints replenishment systems (TOC-RS). It aims to identify the approach that the TOC-RS takes in inventory management and what makes it an effective methodology in today’s supply chain environment. This is achieved by reviewing published literature, reports and journal articles that investigate inventory replenishment systems that focus on TOC-RS, hybrid inventory management systems and vendor managed inventory (WMI). Effective inventory management has been identified as a salient component that is necessary in order to achieve an effective supply chain.... [tags: Supply chain management, Inventory]
862 words (2.5 pages)
- 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]
1667 words (4.8 pages)
- 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]
472 words (1.3 pages)
- 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]
1879 words (5.4 pages)
- 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]
2374 words (6.8 pages)
- Real World Process Interview Define 3 Rules of Constraint Management According to the textbook Eli Goldcratt implemented the Theory of Constraints (TOC). TOC is defined as the business approach to improve production, distribution and project management. (Jacobs, 2013) Goldcratt’s instituted a 5 step process to improve and assess current operations and productions. Goldcratt’s stated the following are rules for the management of constraints which include: “to identify the system constraints and weakness; decide how to exploit the constraints; subordinate everything else to that decision; elevate the system constraints if previous steps are broken start the process over again.” (Jacobs, 2013)... [tags: Theory of Constraints, Constraint]
721 words (2.1 pages)
- Nissan has had many issues going on since 2011 when a 9.0 earthquake and a tsunami wave hit the coast of Japan. Nissan also had to worry about the three nuclear reactors having level 7 meltdowns. After all the incidents happened Nissan decided to recover with rapid and fast actions through the exploration of process management functions. The following paper will describe how Nissan could incorporate these functions into their current OM functions. Theories and Techniques The theory of constraints or TOC help organizations deal with its limits to achieve its selected goals throughout the year.... [tags: Theory of Constraints, Constraint, Management]
718 words (2.1 pages)
- Target costing A cross functional team of marketing experts, engineers and cost accountants determine the cost of a product early in the design and development phase based on what customers desire in a product and what they are willing to pay for the new product. Implementing this market oriented approach enables firms to set the desired profit margin early if not prior to the product development process. Two methods are used to set target cost: subtractive, addition. Subtractive is the method of determining the sales price and subtracting the desired margin to arrive at the target cost.... [tags: Price, Economics, Theory of Constraints]
709 words (2 pages)
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.
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.