Essay: Theory of Constraint in Sony

Sample Essay

Another example of a constraint at Sony is the fact that most of the production efforts are placed in Japan, where the company is headquartered. This means that in the case of a strengthening Yen, the exports from Japan will become more expensive for foreign consumers. To ease this constraint, Mr. Stringer has announced a restructuring of the company which also includes the outsourcing of manufacturing to outside vendors.[1]

Conclusion

The TOC is a widely used technique by many managing professionals. It is applied not merely to production and manufacturing, but to other aspects of the value chain as well, as demonstrated by the Sony Corporation example. Sony has used TOC to outsource manufacturing and also to ease the exchange rate constraint which has been negatively affecting its sales and profitability margins. The TOC should therefore be applied more broadly in principle throughout the organization and all the factors that restrict or constrain the performance of the organization.

[1] Wakabayashi, D (2009). “Stringer Steps Up as Sony Faces Slump” Wall Street Journal Asia. p. B1 Retrieved March 19, 2009 from http://online.wsj.com/article/SB123571755198092301.html