Improving Business Throughput To Drive Profitability
In an increasingly competitive manufacturing environment, as well as a tough South African economy, it’s imperative that all aspects of the organization and business are functioning at optimal performance. To do this effectively, careful consideration of the key steps within the product life cycle and the underlying systems and processes at play, are required.
The Cape Clothing and Textiles Cluster hosted a workshop on “Theory of Constraints (TOC)”, a business management methodology that prioritizes improving a business’s throughput as a means of driving profitability.
WHAT IS THEORY OF CONSTRAINTS?
The Theory of Constraints is a methodology for identifying the most important limiting factor (i.e. constraint) that stands in the way of achieving a goal and then systematically improving that constraint until it is no longer the limiting factor. In manufacturing, the constraint is often referred to as a bottleneck.
TOC challenges the notion that maximizing local efficiencies within a business will lead to elevated levels of performance. Performance should not be measured by total output but by how efficiently the business can generate profit within their business. TOC focuses on improving the manner in which profit flows through the business and identifying and maximizing constraints that prevent an even flow.
With over thirty years of experience implementing TOC, Konrad Bartel, from OpsLogik, provided CCTC attendees with a comprehensive introduction, overview and application of TOC.
Maarten de Pater, Operations Manager of Biodelta, a pharmaceuticals manufacturer based in Franschoek, addressed the Cluster on how implementing TOC improved cash flow, helped them improve their sales strategies, and significantly reduced work in progress (WIP) inventory across the entire supply chain.
The workshop included a tour of BioDelta’s production facility where attendees observed the changes that have taken place first hand.
The feedback from this session was immensely positive and attendees left feeling better equipped to drive change in their organisations.