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Importance of Proposed Research Topic:
The present research seeks to establish the efficiency of the Theory of Constraints (TOC hereafter) by showing that TOC effectively improves organizational performance and supply chain process of an organization than other Supply chain processes.
Goldratt (1988) and Fry et al. (1992) are considered as forerunners of the theory when the history of the phenomena is traced back at that time (later supported by the works of Gardiner and Blackstone, 1994; Watson et al. 2007).
Gupta et al. (2004) is well known for his contributions in demonstrating myriad applications of TOC in supply chain process and strategic management. He also showed how the TOC can actually make the supply chain process more efficient through strategic planning and optimized scheduling (Blackstone, 2001).
Kim et al. (2008) also made effective contributions to highlight the current functionalities of TOC in SCM through a combination of management and scientific methodologies (Davies et al. 2005).
Hence from the above evidences, it is clear that TOC is an important phenomenon in the operations management field and TOC affects the organizational performance, decision process, operational efficiencies and reliability in the supply chain process (Chase et al. 2006; Krajewskiet al. 2007; and Watson et al. 2003). But none of the above cases indicate whether TOC is comparatively more effective than other SCM philosophies or not? This remained as a major gap in the literatures of supply chain management.
This research is a novel approach from the practical point of reference because understanding TOC and comparing its effectiveness with other SCM philosophies, will help the organizations to improvise their organizational effectiveness, as scholars like Rahman (1998), Blackstone (2001), Boyd and Gupta (2004) have recently documented through their works that implementation of TOC lessened operational cycle times, reduced lead times, and allowed to handle inventory more effectively which jointly improve the effectiveness of the whole SC process.
There are various circumstantial confirmationsby scholars who approved that service organization widely implements TOC in increasing the efficiency of its SCM process and the overall organizational performance. But since the measurement of reliability and organizational improvement is difficult hence, this is considered through the manufacturing throughput of the SCM process of the organization, reducing inventory, and lessening operational expenditures. This is reflected in the total profit to the inventory which is the comparative measure as suggested earlier by Lockamy and Spencer (1998) in this field so far.
But there have been very less investigations in this aspect supporting the suggestions of Lockamy and Spencer (1998)'s theoretical assumption. Hence, it became necessary to show by way of practical investigation by employing field data as suggested by scholars (Holt, 1998; Lambret and Segaert, 1990; Sale & Inman, 2003) to prove the implementation benefits of TOC.
Focus of Research: Academic Context and Research Rationale
Previously, Johnston (1999) suggested that research related to SCM should deploy 'on the customary powers of procedures supervision, such as process reliability, strategy, and process enhancement. If this would be done then it would 'aid in delivering extra information related to the intensifying subject to facility administration and organizational performance (Johnston, 1999).
Boyd and Gupta (2004) suggested that there is an affirmative association between establishments with an input bearing, those employing TOC philosophies, and administrative performance. They have also suggested that the organizations which employ principles of TOC have superior quality of services than their competitors. They suggested that superior service quality is because of the organized and reduced cycle time, reduced inventory and reduced expenses which brings more profitability for the organization. The present research focuses on this aspect of the suggestion of the scholars (Johnston, 1988; Boyd and Gupta, 2004) and tries to establish that through the primary data collected.
Novelty of the Idea Development Process:
Theory of Constraints method is grounded in Methods Philosophy (Taylor and Churchwell, 2004) and reflects the complete performance of the organization rather than representing the performance of a distinct constituent in the structure. The Theory of Constraints considersthat every structure has rudiments that bounds its performance, known as "constraints" (Gupta and Kline, 2008), and that there are a limited number of constraints in a particular organization; maybe just one (Simatupanget al.2004). The TOC is used for noteworthydevelopment in organizations (Lin et al. 2009). They have shown through a survey of firms that TOC methods have better performances than conventional methods like Just-In-Time, Agile and Lean Processes. But the process is also subjected to many criticisms. The active content is one of its major lacuna as the fixed and rectilinear association between the elements of TOC's logic branches is often not fully explained by scholars.
Choice of Ford Motors as Case Study:
I propose to take the case study of "Ford Motors" to prove the research aim since it is the most projectingexamples when we talk about implementation of TOC and its benefits in SCM processes. Ford Motors Company was having problem in managing its inventory and lead time but with implementations of TOC methods, it's considerably reduced the lead time from 16 days to 16 hours. Today, Ford Motors is the known as the best example of TOC approaches and because of this technique the company has improved its organizational performance quite remarkably (Boyd and Gupta, 2004). In fact, Godratt (2002) credits Ford Motors Company for successfully demonstrating the usability of TOC applications in the SCM process and manufacturing methods.
Previously, Ford Motors Company followed Just-In-Time technique but later on it started following the principles of TOC. On investigating the reasons from official sources, it has been found out that the organization was much more satisfied with the outcomes obtained with TOC approach. This obviously presents an interesting case to study that what made Ford Motors to change their decision from Just-in-Time approach to TOC approach. A detailed in-depth investigation can only lead us to a proper conclusion, hence the choice of this company has been made. Secondly, Ford Motors is a UK-based company which will be more approachable for real-time data collection than other organizations. They have their manufacturing plants located in the UK, hence if needed, I can visit the field physically, scrutinize the situation myself and collect valid, recurrent data for my research (Chase et al. 2006; Krajewskiet al. 2007; and Watson et al. 2003).
Aims and Objectives of Research:
Aim: Toshow that the implementation of TOC leads to increase in productivity and effectiveness of the SCM process in an organization compared to other SCM philosophies thus resulting in an enhanced organizational performance.
To evaluate the effectivenessof TOC in the operational process in an organization by comparing it with other supply chain philosophies.
To identify, the main bottlenecks and how to overcome the constraints through TOC in the manufacturing process of Ford Motors Company by in-depth interview of operational managers.
To show that implementation of TOC leads to increase in effectiveness of the SCM process in Ford Motors by in-depth interview of operational managers.
To prove by the Ford Motors Study that TOC is much more effective in offering timely solutions to remove manufacturing bottlenecks than other SCM philosophies.
Is TOC philosophy more effective than other philosophies in increasing the effectiveness of the Supply Chain Process of an organization?
Literature Review of Fundamental Issues:
In this section, I propose to describe the previous and contemporarystudies of scholarly works associated with the subject matter.
Key theories related to Theory of Constraints:
Evolution of TOC:
Eliyahu Goldratt (1984), initiator of perception of TOC, in his manuscript "GOAL" has accentuated that limitation (constraint) is the restrictive feature for attaining the organizations' objective. The sequence is as durable as its fragile connection, which he labeled as a constraint. In a supply chain process, quantification of this constraint is the only method to comprehend whether the process is on the right track or not and whether any remedial measure is necessary.
The Meta-Analysis by Mabin and Balderstone (2000) showed that TOC implementations effectively lessened cycle times of an operational process to 60%, lead times to 75% and inventory levels to 50% compared to other processes. Finally Simatupanget al. (2004) showed that TOC invigorated supervisors to recognize limitations and find solutions to eradicate them.
Organizations Employing TOC and Organizations not employing TOC: Ford Motors, Godrej, Procter & Gamble are some of thecompanies which have implemented TOC in their manufacturing processes. In fact in all of these organizations, TOC have helped them to increase the staff turnover, increase profit incomes and to reduce layoffs. The companies have credited TOC processes for boosting their sales record within only a short span of implementation of the process. The whole SCM process became more effective with reduced inventory, reduced waste and enjoyed a rapid short term results. On the other hand, Motorola, Toyota like companies which applied other philosophies like Six Sigma, JIT Philosophy, soon realized that their philosophies are not efficient enough to deal with complex, evolved situations. Whereas other processes required skilled and dedicated manpower, in the TOC, very less labour inputs were required. Ford Motors are a prominent case where they switched their operation philosophy from JIT to TOC and saw the immense benefits within a short span.
Effectiveness of TOC Process: The effectiveness of TOC philosophy lies in the fact that it provides resolution for all categories of difficulty within a very short span and can be explained with the help of a basic model (Fig. 1) (Watson et al. 2007). Matron and Paulova (2010) suggested recently that TOC has huge prospective for incredible escalations in output with negligible alterations to procedures. It is the best prevailing and cost operative process for cumulative fabrication capability. It is quite easy to link and relate to other SCM philosophies if desired, making it seamless for work groups. It helps in increasing the team spirit as people become aware of the different limitations and the necessity to work in collaboration to cross the hurdle. It helps in boosting development struggles as it delivers instant and very perceptible profits. It permits an increase of income/output lacking the necessity for supplementary worker or space. Lastly, it offers a way to assess the correct worth of variations (using T, O, I), and apply this to pick the best alternative, and take the correct resolutions (Marton and Paulova, 2010).
Figure : Figure shows a model of Theory of Constraints.
TOC and Organizational Performance:
The aim of TOC is to ensure self sufficiency in the organization and create a sustainable system to increase organizational development (Goldratt, 2012). As explained by Wei et al. (2002) conventionalmanufacturingdid not provide an optimal solution for the problems.Computationsfor these were tedious and were not always suitable for each and every problem. These methods did not consider the strategic and environmental factors. Considering all the aspects, it was difficult for the companies to change the complete thinking process. TOC developed by Goldratt (1984) identified maximization of the throughput which acted as a salient feature, that helped to increase profitability of the organization and also enhanced organizational performance (Jones and Dugdale, 1998).
Comparison of TOC with other Supply Chain Philosophies:
Nave (2002) suggested few differences between TOC and other supply chain philosophies like six sigma, lean thinking and JIT. By comparing the other processes, he suggested that TOC is more effective than others comparatively because in six sigma, and in lean thinking, heavy worker input in necessary but in TOC, minimal worker input is necessary. But improvement needs are actually different for different organizations. Depending on this, it can be recommended that if a business requires logical trainings, and examinations of data, diagrams and calculation, then Six Sigma will be optimal. If on the other hand, business values, graphic alteration, and accurate timely changes, then lean philosophy is appropriate, but where the organization follows a structured method where entire involvement is not wanted and if it standards the partingoflabours and supervisors, then TOC is operative (Nave, 2002).
Hence, considering the above discussion, in this research, I plan to evaluate the benefits of implementation of TOC in SCM processes in an organization following systematic approach where there is less participation of workers, and show that it is comparatively more effective than other SCM philosophies.
Gaps in the previous research:
In the light of organizational performance measure literatures, there are very few available literary works which provided a detailed comparative overview of the analysis and methods of the system involving TOC and other SCM philosophies. This remained as a literary gap.
Only Schaeffer et al. (2007) delivered a stride in the correctroute, but their projected dimensions tumbled downin the light of the TOC's explanation of organizational performance measures. This is because that they described the material and inventory with components of life expectancy and superiority, but kept in the background the traditionaldescription of operational expenditures. Hence, in the end, they were not successful in their quest to show the organizational performance level through profit returns which were the ultimate aim of their work. Secondly, they considered the aspects in a cost-accounting dimension which were different from supply chain focus, hence their work remained as an unsolved gap in the literatures.
Before Schaeffer et al. (2007), Noreen et al. (1995) also tried to collect the data for the same purpose but they also failed as they have reported that it is quite complicated to gather hard data as people always did not record measurements before changes were made. This was another gap which was presented in the literature.
Research Rationale and the subject matter:
This research focuses towards the manufacturing problem of several organizations in the operational supply chain process and aims to provide an in-depth analysis of the Theory of Constraint process used in enhancing organizational performance. The main aim of the research is to show the operational efficiency of TOCin the SCM process in an organization compared to other SCM philosophies.
The research design will be arranged in the pattern of Saunders Research Onion Model (2009) (Fig.1). This starts with a research perspective. Here, the main impetus for my research was the recognition of the fact that the popularity of TOC in every service operation is growing at a rapid pace and there have been still many aspects of this philosophy which needs thorough investigation. Though my work will not be able to cover all the aspects of TOC, but some fundamentals like inventory management, reduction of cycle time, especially comparative analysis with other SCM processes will be covered in this research which is directly associated with process improvements.
Figure : THE RESEARCH ONION MODEL. SOURCE: SAUNDERS ET AL. (2009).
I propose to follow a qualitative, exploratory analysis for this research. This is because I have found this method to be the most apt as this research involves a topic about which there are a few uncertainties (research gaps) and unawareness (Cresswell, 1994). The problem so far has not well investigated and comprehended by many scholars which is indicated by the scanty literary works. Hence, this kind of research demands a good amount of flexible framework and will lack a formal empirical analysis. Therealismof this subject matter is individual and will be spawned from the individual perspectives (manager's feedback).
Weaver and Olson (2006) defined research philosophy as the principle which revealed how the study could be predisposed and focused by a certain example.Here, I propose to follow an interpretive philosophy, based on epistemological stance. This is because, in this research, the knowledge of reality about TOC philosophy will be gained through social interactions (in-depth interview), shared meanings, and documents (literature review) (Walsham, 1993).
The aim of the research promotes for an inductive reasoning. This is because this research is an exploratory analysis where realism of the subject matter is spawned from individuals which will be discussed along with theoretical implications matching with the literary knowledge.
Figure : INDUCTIVE REASONING APPROACH
I propose to conduct my research on the Ford Motors Company in the Halewood plant, in Liverpool in the UK. I have chosen this planet as I have access to the manufacturing unit because of my personal contacts and can access data from supply chain managers easily regarding the process philosophy. Secondly, I can also visit the plant in person and observe the processes personally which will help me further to understand the whole process more effectively. I will conduct an in-depth interview with the supply chain managers in person after managing the consent approval from the plant higher authority.
Proposed Work Plan:
The present research is a cross-sectional one and hence is delimited my time and space. I plan to collect the data for the contemporary period and collect the primary data through in-depth interview method. Though field interview is a tedious and time taking process, but since my research is a process oriented one, hence I prefer for a personal in person field in-depth interview with the supply chain managers within the manufacturing plant premises.
Interview:For the interview session, I plan to send an appointment and approval letter asking their ethical consent for the interview. After the approval, as per the scheduled date and time, I propose to interview 5 supply chain managers, conveniently chosen by the plant in the given place.
Proposed Data Handling and Analysis: For the interview, I will go prepared with tape audio tape recorder as that will help me to record the verbatim of the respondents. For the interview, I will prepare a sheet of semi-structured open-ended questions which are brief and interesting, related to the subject field. My interference will be minimum and I will only guide them to the subsequent questions.
Ethical Issues:I will see that prejudice of the respondents does not interfere in the process and all interview formalities are duly followed. The identity of the respondents will be kept confidential for ethical reasons.
Follow Up: I plan to interview the managers in the same date as I will keep a minimum number of questions. After their interview, I will ask their permission for respective follow up if required during transcription and will send them a copy of their transcription so that they get to know about their inputs.
I am not being able to detail the process any further at this stage, hence only this much I plan for my research at this stage.
I plan to analyse the feedback obtained from the respondents with the help of simple logical, ethnographic discourse and compare the results with the literary suggestions. In the end, I will present, one of the transcription samples which will give an idea of the interview session.
I plan to complete this whole action process within 1 month but this may require more time depending on the organizational approval process.
For the time being I propose the following Gantt Chart for my work plan:
Figure : Proposed Action Plan
The practicalconstraints for qualitative research is related to validity as the results are not established by empirical calculations and facts. This kind of research mostly relies on the discrete verdict of the respondents based on which the researcher interprets his own logical conclusions.
Another practical constraint is data collection. Since, Ford Company has their own practices regarding their supply chain processes, it is assumed that few data will not be given which are oriented to core processes.