008-0518 Theory of Constraints contributions to outbound logistics Fernando Bernardi de Souza São Paulo State University (UNESP) Av. Eng. Luiz Edmundo C. Coube 14-01 Bauru, SP, 17033-360 - Brazil
[email protected] Tel: 55 (14) 3103-6122 Sivio R. I. Pires Methodist University of Piracicaba (UNIMEP) Rodovia do Açúcar, Km 156 Piracicaba, SP, 13400-911 - Brazil
[email protected] Tel.: 55 (14) 3124-1515 POMS 19th Annual Conference La Jolla, California, U.S.A. May 9 to May 12, 2008 Abstract This article aims to present the main contributions of the Theory of Constraints (TOC) to outbound (distribution) logistics. It presents the thesis defended by TOC, according to which the current ways of managing outbound logistics, based mainly on sales forecasts, batching policies, and indicators that do not privilege the supply chain performance as a whole, lead to difficulties in handling the trade-off between logistics (stock and transportation) costs and stock-outs levels. This conventional logistics management is labeled by TOC as pushed distribution, in contrast with its defended approach called pulled distribution. Considering the few scientific texts existing on the subject, this article claims to present, based on a theoretical research, the technical aspects of the approach suggested by TOC and discuss the assumptions it is based on, in an attempt to contribute to the expansion of outbound logistics knowledge and widen the analysis of supply chain management. Key words: Outbound logistics; distribution; pull system; Theory of Constraints. 1. Introduction Since its inception about two decades ago, the Theory of Constraints (TOC) has developed quickly and stood its ground as an important model for business management (WATSON et al, 2007).