Managerial Accounting For Dummies

Chapter 19

Using the Theory of Constraints to Squeeze Out of a Tight Spot

In This Chapter

Identifying constraints that choke up a system

Following the five steps of managing and reducing constraints

Creeping to work every morning on the Garden State Parkway gives me an awful lot of time to think about constraints. On a typical day, I encounter at least one bottleneck along the way where everybody slows down. Sometimes it’s because police are ticketing a speeder, or construction is blocking the road, or everyone’s rubbernecking at a very intriguing accident. And then sometimes, I guess, people just feel like slowing down for no apparent reason.

The problem with a bottleneck is that it slows down all the traffic behind it. After all, if one car moves at 2 miles per hour through a bottleneck, then every single car behind it must also slow down to that speed (or else). A truly theatrical accident can back traffic up for miles in both directions. To get traffic moving again, officers need to exploit the constraint — to open up the bottleneck so that traffic can move again.

Manufacturing — and even services — often work a lot like the Garden State Parkway. To improve production, you need to focus on and then break the bottleneck or constraint.

Understanding Constraints

Constraints