Companies resort to Theory of Constraints to stay ahead in the game by Priyanka Sangani

Five years ago, Dr Reddy’s Laboratories (DRL) was facing a difficult time in the US. It had a significant number of backorders and supplier ratings were at an all-time low. That’s when the company started implementing processes advocated by the theory of constraints (TOC) to fix its supply chain. Last year, it won a best supplier award in the US. Saumen Chakraborty, DRL’s chief financial officer, says, “When selling in the US, two things matter: your product quality rating and your supplier rating. Today, TOC has become a part of our management philosophy. It defines our manufacturing and R&D pipeline and helps us understand where we need to focus and improve.”

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