Improving Operations Strategy: Application of TOC Principles in a Small Business

Document Type

Article

Publication Date

4-2010

Publication Title

Journal of Business & Economics Research

Abstract

This paper demonstrates how small business managers can create and sustain competitive advantage by applying basic principles of Theory of Constraints (TOC) using a case study on a small family-owned pizza restaurant. TOC five focusing steps were used to reveal the business constraints and practical recommendations were provided that significantly improved throughput, resource utilization, and customer satisfaction without incurring any significant expenses. TOC performance measures encourage small business managers to find innovative ways of increasing throughput instead of simply cutting costs. Positive outcomes in this study demonstrate how small businesses effectively manage their operations and realize benefits using TOC principles.

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