This was an A paper
Unit 5 DB
Supply, chain, and location
The most important element of Goldratt Theory of Constraints is that the throughput of a
plant is determined by the capacity of the bottleneck process. It serves no purpose to
operate other processes at capacities greater than the bottleneck process because that will
not increase the throughput but merely add to the inventory. In the Mexico plant there are
processes that are creating bottlenecks. The capacities of these processes have to be
increased in order to increase throughput and meet the increasing demand. Two options are
available. One is to outsource work on these processes. The other is to add capacity in
these processes. The second option would require moving some employees from other jobs
and training them to perform the bottleneck processes. But it would give greater control
over the processes than the outsourcing option. (Winter, 2005)
The creation of inventory decreases the bottom line. Operational expenses are incurred to
create the inventory. If that inventory lies idle because of a bottleneck at some other
process then it is a drain on the resources. Hence all processes must have a throughput
equal to the throughput of the bottleneck process. It is required to maintain in-process
inventory only for the bottleneck process to ensure that the bottleneck processes do not
idle. That would decrease the throughput of the overall plant. Inventory for the other
processes need not be maintained because the capacity of those processes can be raised in
