Every improvement is a change, but not every change is an improvement: Elena Streltsova delivered a lecture on the Theory of Constraints for EMBA students

October 9, 2017, the final session of Executive MBA-2018A module was completed with Change management course. The lecture was devoted to the fundamentals of the Theory of Constraints (TOC) and its practical application in production. 

 

 

Change Management course was developed by Galina V. Shirokova as a part of both the main educational programs and Executive MBA program in GSOM SPbU. In an ever-changing world, the study of theoretical and practical issues of organizational change is necessary for successful managers training.

 

Guest lecture was held by Elena Streltsova, CEO of Optoklub “Ryady”, Chairman of the Board of Directors and co-owner of CA “Lyubimyy Kray”.

 

Elena is a follower of E. Goldratt's Theory of Constraints (TOC), which she successfully applied in “Lyubimyy Kray” while heading the company in 2003-2014. CA “Lyubimyy Kray” is one of the first enterprises in Russia to apply TOC in production.

 

At the lecture, students studied the scope of TOS, its basic principles and main steps to implement these principles into the company management system. Moreover, they identified and conducted an analysis of the constraints for their own companies performing a practical task.

 

 

     
 

For information:

 

The Theory of Constraints was developed in the 1980s by the Israeli physicist Eliyahu M. Goldratt. It is applicable in such areas as project management, production, supply chain management, financial performance monitoring, etc. The peculiarity of TOC is that by applying efforts to manage a very small number of aspects of the system, a much greater effect is achieved than with simultaneous exposure on all or most of the problem areas of the system at once. To highlight these several aspects of the system, TOC proposes to conduct a thorough analysis of the production work and highlight the most important limiting factor (i.e. constraint) in it. Major change efforts should be directed to these constraints.

 
     

 

Types of constraints: 

  • Resource constraints (lack of resource, which is required to create an additional product);
  • Market constraints (lack of orders and sales outlets);
  • Time constraints (low product development speed leads to the inability to fulfill obligations to customers and increase productivity).

 

Five focusing steps of TOC:

  1. Identify the constraint, i.e. analyze and identify limiting factors.
  2. Exploit the constraint - maximize throughput of the constraint using currently available resources.
  3. Subordinate and synchronize to the constraint. The primary objective is to support the needs of the constraint (i.e. subordinate to the constraint). This step is very important for daily management of the system to prevent repeated subsidence when switching to another constraint.
  4. Elevate performance of the constraint. This is achieved through the growth of production capacity (if it is limited), the acquisition of additional orders (if the volume of the market is limited) and reducing the time spent on fulfilling orders.
  5. Repeat the Process. In this step, the objective is to ensure that the Five Focusing Steps are not implemented as a one-off improvement project. Instead, they should be implemented as a continuous improvement process. 

 

The Theory of Constraint is described in artistic form in a series of business novels by Eliyahu M. Goldratt. Main novel called “The Goal: A Process of Ongoing Improvement”. In a more formal way TOC described in Oded Cohen and Elena Fedurko's book “Fundamentals of Theory of Constraints”.