The Goal - Theory of Constraints

A great way of improving overall productivity is to identify and eliminate "bottlenecks," or things that are holding you back.

So how do you identify these bottlenecks?

One approach is to use the Theory of Constraints (TOC). This helps you identify the most important bottleneck in your processes and systems, so that you can deal with it and improve performance.

You've likely heard the adage, "A chain is only as strong as its weakest link," and this is what the Theory of Constraints reflects. It was created by Dr. Eli Goldratt and was published in his 1984 book "The Goal."

According to Goldratt, organizational performance is dictated by constraints. These are where bottlenecks occur that prevent an organization from maximizing its performance and reaching its goals. Constraints can involve people, supplies, information, equipment, or even policies, and they can be internal or external to an organization.

The theory says that every system, no matter how well it performs, has at least one constraint that limits its performance – this is the system's "weakest link." The theory also says that a system can have only one constraint at a time, and that other areas of weakness are "non-constraints" until they become the weakest link.

You use the theory by identifying your constraint and changing the way that you work so that you can overcome it.

The theory was originally used successfully in manufacturing, but you can use it in a variety of situations. It's most useful with important or frequently-used processes within your organization.

Goldratt originally identified a five-step process for applying the theory, as follows:

1. Identify the constraint.
2. Exploit the constraint.
3. Subordinate everything else to the constraint.
4. Elevate the constraint.
5. Go back to step 1.