Lean vs. Toc

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Lean Systems maximize the value of a company’s activities by removing waste and delays. A lean System uses a JIT (just in time) system. JIT systems organize a company’s resources to realize benefits. The Theory of Constraints wants to improve performance by improving the bottleneck. The goal of TOC is to make sure the organization performs to the maximum level established by the constraints. They are the same in that they both pull systems and want to reduce the time from which you receive an order to conversion of cash. TOC focuses on maintaining and increasing throughput, while the lean system focuses on elimination of waste. There are benefits to both that can be applied to many service industries. A lean system is a philosophy designed by Toyota Production Systems which reduced the seven wastes and added value for the customer. It is focused on the flow of production and how to improve processes while eliminating waste. As waste is eliminated production time is reduced and quality is improved. The technique to improve production is a pull system that is based on a Kanban system. A Kanban system is a system that tells what to produce, when to produce and how much to produce. This technique can be a useful way of highlighting improvements. A kanban card signals demand for the product. Lean systems are focused on getting the right things to the right place at the right time in the right quantity to achieve perfect work flow. Lean systems do this while minimizing waste and being flexible and able to change. Flexibility and change are required to allow production leveling. The flexibility and ability to change are within bounds and often do not require expensive capability requirements. Benefits are fewer inventories, less variation, uniform output, improved quality and new accounting and performance measures for managers. Weaknesses are unlimited working

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