Questions and Answers
What is the first step in the improvement process in TOC?
What is the purpose of the three questions in TOC?
What must be done to solve the problem of a constraint?
What is the purpose of step 3 in the improvement process?
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Why is it important to buffer in the improvement process?
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What happens if you solve the constraint problem?
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What is the purpose of the 'five focusing steps' in TOC?
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What is step 4 in the improvement process?
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What is the warning in the last step of the improvement process?
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What is the goal of the improvement process in TOC?
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Study Notes
KPIs
- Having only one or two KPIs can be risky; it's smart to have at least four KPIs to cover different areas, such as scheduling, quality, sales, profitability, deliveries, customer service, and relationships with suppliers and customers.
Prioritizing Problem Areas
- Three approaches exist to prioritize problem areas:
- Using the sole criterion of dollars (or equivalent currency)
- Considering the relationship between the problem area and operations strategies
- Allowing for soft factors, such as the effects of the problem areas on people
Fishbone Diagram
- A Fishbone Diagram is used to identify the causes of a problem:
- Draw a horizontal line with the problem at one end (the "head of the fish")
- Draw diagonal lines running up or down from the horizontal line, labeling each with a category (the "bones of the fish")
- Typical categories used include Equipment, Process, People, Materials, Environment, and Management
- Add categories if possible causes arise that don't fit the original categories
Generating Possible Solutions
- Sometimes a solution is obvious and requires common sense and/or experience
- Identify factors within each category of the Fishbone Diagram that may be contributing to the problem
- Use idea-generating techniques to identify possible solutions
Cost-Benefit Analysis
- Calculate the benefits expected from applying a solution and subtract the costs you expect to incur
- Calculate a payback period, the time it takes for the benefits of a change to outweigh the costs
- Use this technique to decide among potential solutions
Theory of Constraints (TOC)
- The improvement process is structured around three questions:
- What to change? What is the problem?
- What to change to? What is the solution?
- How to cause the change? How can we implement the solution?
- The focusing steps for maximizing the performance of a system by ensuring that improvement efforts focus on constraints are:
- Identify the system constraint
- Decide how to exploit the system constraint
- Subordinate and synchronize all other processes to support the above decision
- Elevate the system constraint until it is "broken" or solved
- Don't let inertia become the system constraint!
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Description
This quiz assesses your knowledge of key performance indicators (KPIs) in various aspects of business, including scheduling, quality, sales, profitability, deliveries, customer service, and more.