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Theory of Constraint
The Theory of Constraints (TOC) is a philosophy of management and improvement originally developed by Eliyahu M. Goldratt and introduced in his book, The Goal. It is based on the fact that, like a chain with its weakest link, in any complex system at any point in time, there is most often only one aspect of that system that is limiting its ability to achieve more of its goal. For that system to attain any significant improvement, that constraint must be identified and the whole system must be managed with it in mind.
The body of knowledge and analytical tools (the TOC Thinking Processes) that give power to TOC come from experience in the “accurate sciences” and are based on rigorous, but easily understood, cause-and-effect logic. These tools also provide the ability to support the development of breakthrough solutions through the premise that in the real world, all systemic conflicts that inhibit action are the result of unexamined assumptions that can be identified and corrected for true win-win solutions.
The TOC Thinking Processes, taken as a whole, provides an integrated problem-solving methodology that addresses not only the construction of solutions, but also the need for communication and collaboration that successful implementation requires. They have been used to create powerful generic, “starting-point” solutions for various business functions, including:
The key steps in implementing an effective Theory of Constraints approach are:
Identify the constraint (bottlenecks are identified by inventory pooling before the process)
Exploit the constraint (increase its utilization and efficiency)
Subordinate all other processes to the constraint process (other processes serve the bottleneck)
Elevate the constraint (if required, permanently increase bottleneck capacity)
Rinse and repeat (after taking action, the bottleneck may have shifted or require further attention)
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