What is Theory of Constraints?

The Theory of Constraints or TOC for short was developed by Dr Eliyahu M Goldratt.  It started as just one book and has grown to cover all areas of life and business.  Underlying all of TOC are the Thinking Processes.  The TOC solutions - drum buffer rope, crital chain project management, throughput accounting, etc can all be derived from the Thinking Processess.

The Theory of Constraints focusing steps are:

  1. IDENTIFY the system’s constraint.
  2. Decide how to EXPLOIT the system’s constraint.
  3. SUBORDINATE everything else to the above decision.
  4. ELEVATE the system’s constraint.
  5. If in the previous step the constraint has been broken, go back to Step 1.

The Thinking Processes answer:

  • “What to change?”
  • “To what to change?”
  • “How to cause the change?”

In The Goal, Dr Goldratt postulated that the goal is to make (more) money. It describes three avenues to this goal:

  • Increase Throughput
  • Reduce Inventory
  • Reduce Operating Expense

Dr. Goldratt’s Theory of Constraints is being used by thousands of corporations, and is taught in over 200 colleges, universities and business schools. His books have sold over 6 million copies and have been translated into 23 languages.