Theory Of Constraints In The Supply Chain, Production / Distribution Of Integrated Decision-making Model Applied Research

Supply Chain Management (SCM) is a research focus in management field at present. In this paper,we reviewed some problems focused in SCM. Then we pay more attention to some decision methods. Different researchers have adopted different optimization methods whose objective is minimizing the total cost.Focal point of this text is to recommend and introduce the Theory of Constraints (TOC),known as 'secret weapon of manufacturing industry of U.S.A'. We can apply some methods and thoughts of TOC to optimize supply chain. As we all know,traditional decision objective of SCM is limited to optimize cost all the time,but in fact,we cannot reduce cost infinitely. To improve the performance of supply chain,we should reconsider the relationship between input of materials and output of product and improve throughput. In fact,increasing of throughput can enhance the profitability.In this paper,we investigate the application of TOC in SCM and propose decision model of production/distribution. After we analyze the case and compare it with traditional methods,we find that application of TOC in SCM is effective. This paper will be useful to decision procedure and methods of SCM.Main innovation as follows:1. Consider supply chain a system and research production-distribution integration decision.2. According to the Theory of Constraints,propose the model in which the objective function is Throughput and production and distribution is integrated and the corresponding procedure for the application of decision model.3. From global to local optimization,hierarchical decision is effective to make a better system decision,which will be helpful to find the constraints of supply chain in the course of decision.4. The decision model proposed is different from traditional models and variable expense,not variable cost,is considered.