The Theory of Constraints (TOC)

Strengthening Your "Weakest Link"

Chain with a weak link.

Manage your weakest link.

© iStockphoto/hometowncd

No matter what industry you work in, there is often scope for boosting overall performance.

A great way of doing this 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.

In this article, we'll explore the Theory of Constraints, and we'll look at how you can apply it to your own situation.

Understanding the Theory

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 restrictions that prevent an organization from maximizing its performance and reaching its goals. Constraints can involve people, supplies, information, equipment, or even policies, and 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 very important or frequently-used processes within your organization.

Applying the Theory

Let's look at a step-by-step process for using the theory:

Step 1: Identify the Constraint

The first step is to identify your weakest link – this is the factor that's holding you back the most.

Start by looking at the processes that you use regularly. Are you working as efficiently as you could be, or are there bottlenecks   – for example, because your people lack skills or training, or because you lack capacity in a key area?

Here, it can help to use tools like Flow Charts  , Swim Lane Diagrams  , Storyboarding  , and Failure Modes and Effects Analysis   to map out your processes and identify what's causing issues. You can also brainstorm   constraints with team members, and use tools like the 5 Whys Technique   and Root Cause Analysis   to identify possible issues.

Remember that constraints may not just be physical. They can also include intangible factors such as ineffective communication, restrictive company policies, or even poor team morale.

Also bear in mind that, according to the theory, a system can only have one constraint at a time. So, you need to decide which factor is your weakest link, and focus on that. If this isn't obvious, use tools like Pareto Analysis   or Queuing Models   to identify the constraint.

Step 2: Manage the Constraint

Once you've identified the constraint, you need to figure out how to manage it. What can you do to increase efficiency in this area and cure the problem? (Goldratt calls this "exploiting the constraint.")

Your solutions will vary depending on your team, your goals, and the constraint you're trying to overcome. For example, it might involve helping a team member delegate   work effectively, modifying lunch breaks or vacation time to make workflow more efficient, or reorganizing the way that a task is done to make it more efficient.

Here, it's useful to review approaches used in Lean Manufacturing  , Kanban  , Kaizen  , and the 5S System   to see if these can help you manage your constraint.

Again, you'll also find it useful to brainstorm   possible solutions with people in your team, and to use problem-solving tools such as the Five Whys   and Cause and Effect Analysis   to identify the real issues behind complex problems.

Step 3: Evaluate Performance

Finally, look at how your constraint is performing with the fixes you've put into place. Is it working well? Or is it still holding back the performance of the rest of the system?

If the constraint is still negatively affecting performance, move back to step 2. If you've dealt with the constraint effectively, you can move back to step 1 and identify another constraint.

Note:

Remember that the theory says that every process has at least one constraint. While this may be true, be sensible in how you apply the theory – sometimes removing this constraint will have a minimal impact on performance.

Key Points

Dr Eli Goldratt developed his Theory of Constraints in his 1984 book "The Goal."

The theory says that every system, no matter how well it performs, has at least one constraint that limits its performance. You use the theory by identifying your constraint and restructuring the way that you work so that you can overcome it.

You can minimize constraints and work more efficiently toward accomplishing your goals by working through these steps:

  1. Identify the constraint.
  2. Manage the constraint.
  3. Evaluate performance.

Be sensible in how you apply the theory – sometimes the effort required to fix a constraint might not be worth the improvement in performance.

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Comments (5)
  • Yolande wrote This month
    A constraint can be a number of things. It could be lack of money to buy necessary equipment. It could also be a person that isn't properly qualified or doesn't have the necessary experience to do the job to satisfactory standards. It could also be a lack of manpower.
    If your company doesn't have enough people in IT support, it could be a constraint on how quickly they are able to give the necessary support to a user. If people in IT aren't properly qualified, they may take longer to find a problem or may not be able to help a user quickly and efficiently. And obviously that will have an impact on productivity. Anything that influences productivity negatively has an impact on cost to company.

    Yolande
  • pikoo00808 wrote This month
    can anyone tell me the answer of this, i need this as soon as possible.

    What is a constraint and why could it impact on a company’s IT Support
    Costs, time, user expertise
  • TomH wrote Over a month ago
    Thank you again for your thoughtful comments djrinker69!

    I've updated the article to give more emphasis to the points you've raised. (I particularly liked your comments on step 3 of the process!)

    All the best
    Tom
  • TomH wrote Over a month ago
    Dear djrinker69

    Thanks for your detailed feedback on this - we'll take a look into this and get back to you soon.

    All the best
    Tom
  • djrinker69 wrote Over a month ago
    Hello,
    TOC is passion of mine and I hate to say that I found this article on TOC missed a number of key points about the simplicity of what Eliyahu Goldratt created. I think it is important to keep the complete focusing process rather than to try and condense it. The message gets lost!

    Five steps in the focusing process:
    1. Identify the constraint
    2. Exploit the constraint
    3. Subordinate everything else to the constraint
    4. Elevate the constraint
    5. If constraint is broken go back to step 1 (in other words reidentify the constraint.)

    The other beautiful aspect of TOC is the simplistic methods of addressing each step in the process.
    1. One of the easiest ways of identifying the constraint is to look for piles of inventory. Or in a non production environment, work in progress. This is usually the constraint. This does not take a long analysis process. It can typically be done through observations, basic measurements and management by wandering around. This also works in an office environment, project or system.
    2. When we look at the exploitation of the constraint, we need to look no further than ensuring that we never let that bottleneck stop what they are doing. If anything gets in the way of the constraint, remove it which brings us to step 3.
    3. All other processes must give way to ensuring that the constraint is allowed to perform its work as efficiently as possible. In other words, piling work in front of the constraint is a pointless act. If the upfront processes can take more of the steps so the constraint is not as heavily loaded the better to the overall process. Key point to remember in the TOC program and business is that what really matters is the end result, not necessarily the efficiency of every step if it does not effectively increase the total output.
    4. Elevating the constraint is a key point of finding a way to remove the constraint through investments, outsourcing, or improved procedures. This is the point in which a number of Lean or Six Sigma tools can provide value.
    5. As in any cycle, it makes sense to start at the beginning and go through the process again.

    Obviously there are lots of tools that can supplement these basic TOC ideas, but I believe it is important to keep the simplicity of Eli's thinking in place. There are so many great books from him that help keep it simple and provide concrete thinking on the use of TOC in multiple environments.
    Necessary but Not Sufficient (Supply Chain and systems thinking)
    Critical Chain (Project Management)
    Its Not Luck (expansion of the TOC thinking into a number of practical tools)

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