The Theory of Constraints

What is the main objective of most manufacturing companies? To make a profit – both in the short and long term. However, at some point, profit inevitably reaches a „ceiling“ and it becomes increasingly difficult to make a profit.

This constraint, this limitation of processes, is best illustrated visually by the neck of the bottle. Focusing improvement efforts on this constraint is

• the fastest,
• most effective,
• scientifically sound

way to increase profitability.

The profitability service offered by NORTUS is directly related to this theory of constraints (TOC):

• Every complex system, including production processes, consists of a number of linked activities, one of which acts as a constraint on the whole system. Nortus consultants will help you find the constraint activity, the weakest link in the chain.
• And then, by optimizing the constraint, to produce more products and reduce delivery times (the flow of products will be smoother and faster).

Many companies fulfil the orders they receive, generate revenue and repeat this cycle. In order to earn more, but without necessarily raising product prices, it is useful to apply the TOC methodology, which helps to accurately assess which products are more profitable than others, which can be sold at cost and which need to be increased. This is not just mathematics, but also focusing the whole organisation on the most profitable products. Finally, it should also be reflected in the company’s incentive system (where the focus is on profitability rather than, for example, sales figures).

This NORTUS service offers a very targeted methodology for creating rapid improvement. It is suitable for both streaming and project-based activities.