Supply Chain Management (Chapter 11 of the Theory of Constraints Handbook)

Amir Schragenheim


Level of TOC knowledge acquired:

Advanced and Intermediate


39 pages

Designed for:

Consultants, Executives, Implementers and Managers


Distribution and Supply Chain


Buffer Management and Pull System/Replenishment







The purposes of this chapter are to provide guidance in using the TOC pull distribution method in order to manage stocks across the supply chain;

  • understanding the current methods used in order to manage stock; understanding the inherent problems with using forecasting in order to manage stock;
  • understanding the steps needed in order to start managing stock levels at the different stocking points according to TOC principles;
  • knowing how to use Buffer Management (BM) to allow better execution by having a priority mechanism to manage production, procurement & transport orders;
  • knowing how to use Dynamic Buffer Management (DBM) in order to adjust the stock levels to actual supply & demand; knowing how to use a TOC-based measurement system in order to manage a product portfolio; knowing the correct way of using forecast without suffering the negative ramifications in order to manage seasonal events (including promotions);
  • understanding the software aspects of moving to the TOC pull distribution;
  • and knowing how to manage the TOC project in a way that will enable smooth implementation with fast results while maintaining a full buy-in of everyone involved at each step.


  • Introduction: The Current Practice of Managing Supply Chains
  • Problems with the Current System
  • The TOC Way—The Distribution/Replenishment Solution
  • Some of the Finer Points in Managing the TOC Distribution/ Replenishment Solution
  • Managing Seasonality in the TOC Distribution/Replenishment Model
  • Implementing the TOC Distribution/Replenishment Model—How Can Software Help and Is It Really Needed?
  • Testing the Solution on a Smaller Scale
  • Managing the TOC Buy-in Process
  • Actual Results of the TOC Distribution/Replenishment Solution

Comprehensive coverage of the Theory of Constraints 

Complete Table of contents of the Theory of Constraints Handbook

About the Authors:

James F. Cox III, Ph.D, CFPIM, CIRM, holds TOCICO certifications in all disciplines. He is a Jonah's Jonah, Professor Emeritus, and was the Robert O. Arnold Professor of Business in the Terry College of Business at the University of Georgia. Dr. Cox has written three books on TOC.

John Schleier holds TOCICO certifications in all disciplines. He was President and Chief Operating Officer of the Mortgage Services Division of Alltel, Inc., Executive Vice President of Computer Power, Inc., and Director of Office Systems and Data Delivery for IBM.


The Theory of Constraints Handbook: