Theory of Constraint

Eliyahu Goldratt’s “The Goal”

Brief overview:
– Midsize company having difficulty shipping products on time.
– Managed by a plant manager desperate to turn things around.
– With the help of a Physicist, the plant manager is able to locate the
bottleneck and find a solution.

Symptoms noted in the book:

– Obsolete inventory.
– Low inventory turnover and high amount of inventory in storage.
– Idle workers or machines.
– Machine breakdown.
– A large amount of scrap pieces.
– A large amount of retooling and rework needed.
 ToC : All about?
• Looks at the entire supply chain and synchronizes the chain to achieve
ultimate performance.
• Based on two assumptions:
– Every organization has a set of processes working together to achieve a
common goal.
– Every process has a [single] constraint that limits it from higher
performance.

• Underlying assumptions: Convergence; consistency; respect

• It is a proven method that can be used by existing personnel to increase

throughput (sales), reliability and quality, while decreasing inventory, WIP,
late deliveries and overtime.
 Five basic principles to implement ToC

• Identify system(s) constraint.

• Decide how to exploit the system’s constraint.
• Subordinate everything else to the prior
decision.
• Elevate system’s constraint.
• If, in prior steps, the constraint has been
broken, go back to Step 1.
 Benefits for implementing ToC
• Reduction in inventory.
• More productive machines.
• Ability to meet shorter lead times.
• More flexible.
• Better customer service.
An independent study by Mark Woeppel reported that after
implementing ToC: lead time reduced by 69%; cycle time
reduced by 66 %; due date performance increased by 60 %; WIP
reduced by 50 % and throughput increased by 60%.
Line Balancing
 Product Layout-Line Balancing
• To balance the assembly line so that no
workstation becomes a bottleneck.
• It involves determination of number of
workstations and assignment of various tasks
to these workstations.
• Every workstation is assigned with set of tasks
that together take approximately same amount
of time.
 Objectives
• Minimizing no. of workstations
• Minimize idle time
• Minimizing WIP inventory
• Achieving synchronous flow
Designing Product Layouts
• An assembly line is a product layout
dedicated to combining the components of
a good or service that has been created
previously.
- Examples: Automobile assembly,
Subway sandwich shops, insurance
policy processing
• Assembly line balancing is a technique
to group tasks among workstations so that
each workstation has—in the ideal case—
the same amount of work.
Assembly-Line Balancing
Required information:
1. The set of tasks to be performed and the
time required to perform each task.

2. The precedence relations among the tasks

—that is, the sequence in which tasks must
be performed.

3. The desired output rate or forecast of

demand for the assembly line.
 Exhibit 8.7 A Three-Task Assembly Line

• One workstation: In an eight-hour day, could produce (1

part/1.0 min)(60 minutes per hour)(8 hours per day) = 480
parts/day
• Three workstation s (one for each task): The first
operator can produce 120 parts per hour, or 960 parts/day.
The second could produce 1,600 parts/day. The third
operator can produce 2,400 parts/day. Maximum output is
960 parts/day.
• Two workstations (A/BC): Since each operator needs 0.5
minute to perform the assigned duties, the line is in perfect
balance, and 960 parts per day can be produced.
Assembly-Line Balancing
Cycle time is the interval between successive outputs coming
off the assembly line.

1. Refer Exhibit 8.7 If we use only one workstation cycle time is 1

minute/unit (i.e. one completed assembly is produced every
minute).
2. If two workstations are used cycle time is 0.5 minute/unit.
3. If three workstations are used cycle time is still 0.5 minute/unit
(Task A is bottleneck).
4. Thus line can produce only one assembly every 0.5 minute.

The cycle time (CT) cannot be smaller than largest operation time,
nor can it be larger than the sum of all operation times (∑t). Thus
Maximum operation time ≤ CT ≤ Sum of operation times
Assembly-Line Balancing
Cycle time (CT) is related to the output (R)
by the following equation:
CT = A/R [8.2]
• A = available time to produce the output.
• The output (R) is normally the demand forecast in
units, adjusted for on-hand inventory if
appropriate, or orders released to the factory.
• Both A and R must have the same time units of
measure (hour, day, week, month, and so on).

• Cycle Time: Maximum amount of time the product

is allowed to spend at each workstation if targeted
production rate is to be reached (Cd)
Assembly-Line Balancing
Minimum number of workstations required
= Sum of task times/Cycle time = t/CT [8.3]

Total Time Available = (Number of work

stations)×(Cycle Time) = (N )(CT )
[8.4]

Total Idle Time = (N )(CT ) − t [8.5]

Assembly-line Efficiency = t/(N ×CT ) [8.6]

Balance Delay = 1 − Assembly-line Efficiency [8.7]

Assembly-Line Balancing: Approach
• Line balancing approaches use decision
rules, or heuristics, to assign tasks to
workstations to attempt to minimize the
amount of idle time at workstations, but do
not guarantee optimal solutions.
• Examples:
- Assign the task with the longest task
time first to a workstation if the cycle
time would not be exceeded.
- Assign the shortest task first.
 Eight tasks are required to assemble indiviual parts

• Assemble wheels, bearings, and axle hardware (2.0 min)

• Assemble break housing and pad (0.2 min)
• Complete wheel assembly (1.5 min)
• Inspect wheel assembly (0.5 min)
• Assemble boot (3.5 min)
• Join boot and wheel assemblies (1.0 min)
• Add line and final assembly (0.2 min)
• Perform final inspection( 0.5 min)
Exhibit 8.8 A Typical In-Line Skate
Target output rate is 360 units per week. Effective workday
(one shift) is 7.2 hours considering lunch and breaks.

• Taking only one workstation for the entire assembly and

assign all tasks to it, the cycle time is 9.4 min.
• Alternatively, if each task is assigned to unique
workstation, the cycle time is 3.5, largest task time.
• Thus feasible time must be between 3.5 and 9.4 minutes.
• Given target output rate of 360 units per week and
operating one shift per day for five days per week.
CT = A/R = (7.2 hrs/shift) (60)/ (72 units/shift) = 6.0 min/unit
• Theoretical minimum no. of workstations = ∑t / CT=
9.4/ 6.0 = 2
Exhibit 8.9 Precedence Network and Workstation Assignment
Longest task time rule can be formalized as follows:

• Choose a set of “all assignable tasks”- those for which

all immediate predecessors have already been assigned.
• Assign the assignable task with longest task time first.
Break ties by choosing the lowest task number.
• Construct a new set of assignable candidates. If no
further tasks can be assigned, move on to the next
workstation. Continue in this way until all tasks have
been assigned.
Assembly Line Balance for In-Line Skate
Workstation Tasks Total Time Idle Time
A 1, 2, 5 5.7 0.3
B 3, 4, 6, 7, 8 3.7 2.3
Total 9.4 2.6

Using equations [8.4] to [8.6] we may compute the

following:

Total Time Available = (Number workstations)(Cycle Time)

=
(N )(CT ) = (2)(6) = 12 minutes

Total Idle Time = (N )(CT ) − t = (2)(6) - 9.4 = 2.6

minutes