An Assessment on the Impact of Theories of Constraints to Seagate Technology

The road has been long and dusty with more chicanes than straights. I have stumbled upon many people along that road, many of which I would like to thank, as I deeply know without their help, I could not have reached this point.

Many thanks to Patrick Miskelly, who set the wheels in motion. Thanks to Jimmy Logue, who’s support, friendship and advice picked me up when the going got tough. Thanks to Edel O’Niell who’s mentoring and tutoring proved invaluable in the compilation of this research. Thanks to everyone else who helped in my research including those in Hitachi and also in Seagate whom I have tormented for the past few months. I would also like to thank Eamon my Manager, who provided me with enough time to conduct this research.

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To my parents, who have waited long and patiently for this day.

Thanks to my role models, brother Shane and sister Michelle.

I would like to thank my wife Shauna, whose cups of tea and renowned toast have provided me with the energy to burn late into the night. I would especially like to thank her for putting up with my frustrations and providing me with her full support.

Thanks to you all!


An increasing number of manufacturing organisations are embracing Theories of Constraints in an attempt to improve their operations and enable them to compete in today’s shrinking, intensive market place. These organisations seek to manage their constraints, which if effectively administered, will equip their organisations with not only the competitive advantage to survive in their habitat, but to excel and achieve a profit.

The process of identifying and eliminating constraining factors has been reviewed and researched by various authors, who subscribe to Goldratt’s theories.

The overall aim of this thesis is to assess the impact of Theories of Constraints to a hi-tech disc-drive manufacturing organisation, namely Seagate Technology. Its objectives include the review of literature identifying the theoretical underpinnings and key elements of Theories of Constraints and other operation management techniques. The features of Seagate’s Theories of Constraints application will be contrasted with two other manufacturing organisations.

Introduction to the Topic

The last millennium has witnessed a significant increase in the standards of living in the western/developed world. This in itself has given rise to an enormous increase in the demand for consumables and consumer goods. Conversely, and as identified by Alvin Toffler (The Third Wave), there has been a shift from secondary (production/manufacturing) to tertiary (service) based economy, “The Information Society”.

The net result is the geographic dispersion of production, to countries with lower labour costs, and the intensification of the production process. This applies to all aspects of production, from agribusiness to high technology companies. The intensification process, which on a par with the industrial revolution in Great Britain and the production line innovation, i.e. Ford in America Circa 1910, has occurred almost unnoticed.

However the intensification and increased consumer demands for cheaper, higher quality goods is not achieved without considerable problems and challenges, both socio and economic. A recent example, being the ‘foot and mouth’ outbreak in the United Kingdom (March 2001), largely blamed on modern farming techniques and the intensification of the farming process (factory farming).

Henry Ford’s achievements in pioneering mass production, producing over 15 million Model T’s, reducing the cost to the consumer from $850 to $260 and dropping the assembly time of its chassis from its original 12.5 hours to 1.5 hours make up the same underlying principles which manufacturing organisations strive to achieve today.

Businesses strive to make a profit for the owners or share holders by producing more for less. Improvements in communications and worldwide infrastructure have increased pressure on businesses to meet the demands – both consumers and investors – of a global economy.

There has been many manufacturing philosophies and techniques embraced by managers in their pursuit to balance the flow of production with demand. Just in Time (JIT), Manufacturing Required Planning (MRP) and Overall Equipment Effectiveness (OEE) are a few theories that have drifted in and out of fashion in management circles over the years. Theories of Constrains (TOC) is one such philosophy, introduced by Goldratt in the 1970’s, which has recently become increasingly wide spread throughout manufacturing industries today.

The purpose of this study is to examine Goldratt’s Theories of Constraints in eliminating restrictive bottlenecks and allowing managers to advance their manufacturing organisations towards their primary goal, “To Make Money”.

Theories of Constraints delivers improved management and understanding of the production process. But what are the real costs, financial or otherwise of a practical implementation of the theory? The purpose of this study is to determine the true value of Theories of Constraints to manufacturing organisations.

This investigation will examine the application of Theories of Constraints on Seagate Technology and will draw comparisons with 2 other high technology manufacturing organisations namely, Hitachi and Philips. These organisations will be introduced in chapter 3.

Seagate Technology Introduction

Seagate Technology is the worlds leading manufacturer of computer hard disk drives with a number of production facilities situated in various parts of the world. Most of the facilities produce components that are eventually assembled as finished goods at a plant in Malaysia. The Recording Head Organisation (RHO) of Seagate has a facility in Derry, Northern Ireland. The production of the recording heads is the most complex part of the entire supply chain and also has the longest throughput of approximately 36 days of the entire 60 day production process. The facility in Derry is on the critical path of production and can be the corporation’s major constraint or bottleneck. Any bottlenecks identified within Seagate Springtown must be viewed as the corporation’s bottleneck, which essentially requires a special management approach in which they have adopted Goldratt’s Theories of Constraints.

One of the factors driving this research is to establish if Seagate’s efforts would have yielded the results that Goldratt has introduced to us in his management concept Theories of Constraints. The full aims and objectives of this project will be detailed later in chapter, however it can be said that the growing application of Theories of Constraints, has prompted the desire to investigate its true worth to management. Investigating the application of Theories of Constraints at the RHO division of Seagate will aid this report in providing a comprehensive study of its effects on a company with rapid market growth/decline and diminutive product life cycles.

The remainder of this chapter highlights the aims and objectives of the project, key methodologies employed, constraints and the significance of the study to Business Studies.