Essay, Pages 2 (352 words)
TQM and TOC are really different facets of the same management philosophy. The foundation of total quality management is originated by W. Edwards Deming. In one of his books, Out of the Crisis, Deming demonstrates that a TQM philosophy is really “the use of the concept of a system, systems thinking, process measurement and a never ending cycle of process improvement”. TOC is really a “focused methodology for performing systems thinking (using the concept of Throughput rather than Cost Control) on the business entity as a whole to focus changes to be made on constraints that are directly limiting better total-system profitability”.
One of the primary reasons Total Quality Management has such a tough row to hoe is that it “lends itself very easily to sub optimization”, which, as Deming observed can be the death of a system. The Theory of Constraints provides an orderly means of connecting departmental actions and decisions with the company’s goal and necessary conditions. TOC provides the tools to determine what to change, what to change it to, and how to cause the change.
And TOC measures Throughput, Inventory, and Operating Expense which allows managers to assess the global impact of local decisions.
The Theory of Constraints is not a replacement for Total Quality Management. It is a focusing tool. Where TQM says, “Improve everything at once”, TOC says, “Improve the most important things first. ” The effective integration of TQM with TOC can alleviate the shortcomings of the former. TOC provides a direct link between quality improvements and the bottom line.
With TOC, an organization can trace performance gains directly to the improvements that caused them. Moreover, such gains are immediate.
On the contrary, TQM need years to show results. TQM and TOC compared to “Loan Company”
Goldratt, Eliyahu M. , “Computerized Shop Floor Scheduling,” International Journal of Productivity Research, March 1988. Goldratt, Eliyahu M. and Cox, Jeff, The Goal, Second Revised Edition, Croton-on-Hudson, NY,1992. Goldratt, Elihyhu, M. , “Chapter 1: Hierarchical Management–The Inherent Conflict,” The Theory of Constraints Journal, Avraham Y. Goldratt Institute, New Haven, Nov, 1987. Deming, Edwards, W, W. Edwards Deming Institute, http://www.deming.org