theory of constraints :: essays research papers

BackgroundEastern Financial Florida Credit Union is the largest credit union in South Florida. The last three years have been intense with rates dipping to there lowest in 40 years. Because of this, 92% of mortgage holders had economic reasons to refinance.Eastern exists to achieve goals to improve member service, work performance and annex profitability however, certain factors limit their capacity to manage controls and they needed help.Eastern Weak LinksEastern needed help because they were faced with a block/constraint of having more loan applicants than they were able to timely bear on so they decided that the problem can be eliminated by implementing Theory of Constraints (TOC) drum-buffer rope and cardinal focusing steps. Other weak links that need to be addressed areInability to commit to closing datesA lot of work in process in the systemLead times too longConstantly shuffling prioritiesToo much expeditingStressful work environment hindrance in responding to urgent m ember requestsOvertime doesnt increase profitsOutsourcing doesnt solve the problemTOC is based on the fact that all businesses enmesh with constraints or bottlenecks, which disable the progress or success of a company. By identifying the bottleneck, the entire operation is strengthened. Drum, Buffer, Rope (DBR)Eastern uses this view in managing constraint on with the five steps. Using DBR assures that the company is running the right thing at the right time.Five Focusing StepsIdentifyExploitSubordinate elicitInertiaIdentify/DrumSince we just reviewed the weak links, we must seek and destroy the bottleneck. Identifying the drum/constraint is critical to the theory of constraints. Eastern identified the constraint to be in the underwriting department.Exploit/BufferTo exploit the constraint, Eastern puts all efforts toward maximizing the area that is causing the problem, which is underwriting. Eastern provided enough work in process files to protect the systems deliverables (closing and delivery dates), which is related to the buffer. The buffer tells two things when too much material is in the buffer and not enough. The system assures that underwriting is protected with work in process files, which is the amount of material in the buffer. This pre-determined amount of work is the rope.SubordinateSubordinating involves training others to improve the constraints area Eastern provides the protection for all resources to underwriting and provides click training and backups to the department this assures that the constraint is operating continuously.