The Theory of Constraints (TOC) is a management philosophy developed by Eliyahu M. Goldratt. It is a set of guiding principles that assist businesses in identifying and managing constraints that limit their growth and profitability. The belief at the heart of TOC is that any system’s output is determined by the constraining factor that limits it.
TOC is based on five core theories: the Five Focusing Steps, the Thinking Processes, the Drum-Buffer-Rope system, the Buffer Management system, and the Critical Chain Method.
The Five Focusing Steps are as follows: Identify the Constraint, Exploit the Constraint, Subordinate Everything to the Constraint, Elevate the Constraint, and If Necessary, Re-Identify the Constraint. This is a five-step procedure designed to assist businesses in identifying and managing system constraints.
The Theory of Constraints can be used to boost throughput in the manufacturing industry. A manufacturer, for example, may identify a bottleneck in their production process, such as a lack of skilled labour or a slow machine. Once the bottleneck has been identified, the Five Focusing Steps can be used to exploit the constraint, prioritise tasks, and streamline the process. This will ultimately increase throughput while decreasing overall time spent on each stage of production.
The Theory of Constraints differs from Lean Six Sigma in several ways. To begin, Lean Six Sigma is a process improvement methodology focused on eliminating waste and reducing variation, whereas TOC is focused on identifying and optimizing constraints. Furthermore, Lean Six Sigma employs statistical analysis and data-driven decision-making, whereas TOC employs a set of guiding principles and a decision-making framework. Finally, Lean Six Sigma focuses on optimizing existing processes, whereas TOC focuses on identifying and optimizing constraints within processes.
