Abstract

To maintain its survival, the company needs to maintain its competitive advantage and make it a unique strategy. This study was conducted to examine and determine whether there is an effect of using the Theory of constraints (TOC) on competitive advantage. Six indicators measured the TOC: Timely delivery to the customer, eliminating raw materials, controlling operational costs and reducing wastage, reducing cycle times and reducing inventory, Rapid response, and additional production capacity without additional investment. The competitive advantage is measured by five indicators: price, quality, delivery dependability, product innovation, and time to market.

This study uses all manufacturing companies that use the TOC method. The samples of the research were 100 manufacturing firms in Bekasi Industrial Area, West Java, Indonesia. Based on the Partial Least Square used in analyzing the data, the result showed that the TOC positively influences competitive advantage.