TOC (Theory of constraints)
“Le Coindujour” Supermarket was set up with the objective of establishing and maintaining the status of number one retail company in the city by providing fairly priced goods and services, affordable to our customers and to a majority of the public. We were looking to set up a convenient shopping space for our customers by allowing them to easily find their day-to-day necessities without endless browsing.
Two years after the opening, it became obvious to management that the business was facing serious challenges. What bottleneck was hampering the performance objectives?
Efficient Supply chain management is a critical component of a successful grocery business. It implies acquiring and assembling a wide variety of goods from individual suppliers, organizing and distributing them as-needed to a chain of retail stores for sale to local customers. This requires:
• A range of repeat customers in various local areas.
• A chain of retail stores.
• Various transportation systems.
• An array of product suppliers under contract.
Given the pressure created by heavy purchase, transportation, and storage costs, management concluded that the Supermarket was suffering from the burdens of logistics.
Following the definitions of throughput, inventory, operating expense and bottleneck discussed in "The Goal," we define these terms as follows:
1) Throughput: the volume of transactional demands and the high level of customer satisfaction
2) Inventory: all the Supermarket materials and equipment (racks and refrigeration systems, air coolers and shelves among others)
3) Operating expenses including staff costs, store supplies, utility costs, depreciation and amortization.
4) The logistics distribution was the most important bottleneck the Supermarket was facing and that was hampering the effectiveness of its sales strategies.
To break our Supermarket’s bottleneck and to increase its throughput, we have applied the following five-step process as recommended by
Two years after the opening, it became obvious to management that the business was facing serious challenges. What bottleneck was hampering the performance objectives?
Efficient Supply chain management is a critical component of a successful grocery business. It implies acquiring and assembling a wide variety of goods from individual suppliers, organizing and distributing them as-needed to a chain of retail stores for sale to local customers. This requires:
• A range of repeat customers in various local areas.
• A chain of retail stores.
• Various transportation systems.
• An array of product suppliers under contract.
Given the pressure created by heavy purchase, transportation, and storage costs, management concluded that the Supermarket was suffering from the burdens of logistics.
Following the definitions of throughput, inventory, operating expense and bottleneck discussed in "The Goal," we define these terms as follows:
1) Throughput: the volume of transactional demands and the high level of customer satisfaction
2) Inventory: all the Supermarket materials and equipment (racks and refrigeration systems, air coolers and shelves among others)
3) Operating expenses including staff costs, store supplies, utility costs, depreciation and amortization.
4) The logistics distribution was the most important bottleneck the Supermarket was facing and that was hampering the effectiveness of its sales strategies.
To break our Supermarket’s bottleneck and to increase its throughput, we have applied the following five-step process as recommended by