An exploratory study into the implementation of theory of constraints (TOC) on New Zealand manufacturing organisations

Abstract

Theory of Constraints (TOC) has been extensively used worldwide since its introduction in the business community over 20 years ago. Despite this, there appears to be a lack of general empirical studies on the implementation of TOC applications both overseas and in New Zealand. This research study aimed to address this gap in the literature by conducting a mail questionnaire involving 300 participants from the membership database of the Avraham Y. Goldratt Institution (AGI), as a way to provide insights on the current implementation of TOC applications in New Zealand manufacturing organisations. Findings indicated that there was an uptake of TOC from NZ manufacturing organisations in the mid to the late 1990s but this was small. These organisations had used mainly the Operational Strategy TOC components as reflected by the level of familiarity, the level of difficulty in understanding, the level of usefulness, and the level of understanding of TOC principles of Operational Strategy TOC tools. However, a small number of these organisations had applied the Thinking Process restricted to Current Reality Tree (CRT) and Evaporating/Conflict Cloud (EC). Despite the predominant use of the TOC Operational Strategy component by the NZ manufacturing organisations, gains in Operational Performance can be achieved a short period time, but NZ manufacturing organisations did not display significant improved percentages in Operational Performance as many of the overseas case studies had reported. The participation of Operational Employee(s) or Consultant(s) were found to have a negative statistical significant correlation with the length of time before changes occurred in performance. In addition, a positive statistical significance was found between the level of difficulty in understanding TOC terminology and the level of understanding of TOC principles. As with many implementation processes, NZ manufacturing organisations experienced barriers, particularly with the human element of 'resistance to change'. Despite this, the survey found there was indicative correlation that better understanding of the Thinking Process tools may be the solution to having any major barriers during implementation of TOC. These NZ manufacturing organisations have applied three or four management approaches/methods at their production sites, used either parallel, in sequence, or together as a multi-methodology.