Applying Theory of Constraints for improving business results in a NPD Process
The best way to achieve a goal is to identify limiting constraint and to improve that constraint so that it is no longer limiting. Theory of Constraints (TOC) methodology provides an approach to improve business results by improving the weakest link in the chain of activities. Today, business environment has become very dynamic with more demanding customers and intense market competition. To meet this, firms are creating new products, solutions and services that provide a radically better experience for the consumers. Still, many companies mess up their product innovation and development process which leads to failure of their new products/ solutions in the market place. Theory of Constraints (TOC) is one of the continuous improvement concepts that were developed to improve competitive advantage in the areas like price/cost, product quality and delivery reliability. It helps to identify core organizational problems and developing solutions that address these core problems. This paper presents the application of TOC Thinking Process (TOC TP) to FEI & NPD process to bring out system constraints and their root causes. A typical NPD process of a consumer durable firm has been taken as case study to demonstrate the useful of this methodology. This methodology was found to be more effective in analyzing problems and conflicts by laying out transition from an undesirable present to a desirable future.
Keywords- Theory of Constraints, TOC, TOC Thinking Process, New Product Development, Front end of Innovation.