Theory of Constraints

The Theory of Constraints (TOC) is a management philosophy developed by Dr. Eliyahu M. Goldratt, first introduced in his 1984 novel, The Goal. TOC posits that every complex system, such as a manufacturing process or an organization, has at least one constraint that limits its overall performance relative to its goal. Improving performance, therefore, depends on identifying and addressing these constraints.

The basic premise of TOC is that organizations are like chains with a single weakest link—a constraint (sometimes known as a bottleneck). This constraint determines the maximum throughput of the entire system. Improvements made anywhere besides the constraint will have only a limited effect, while improvements made at the constraint can dramatically increase overall performance. TOC encourages organizations to focus their efforts on finding the constraint, deciding how to exploit it to its fullest potential, subordinating other processes to the needs of the constraint, elevating the constraint (i.e., making investments or changes to ease it), and then repeating the process for the next constraint.

TOC has been widely applied in manufacturing, project management, and other industries. It offers a systematic approach to identifying the most critical limiting factor (the constraint) and systematically improving it, thereby driving continuous organizational improvement.

Author and Reference:

• Goldratt, Eliyahu M. & Cox, Jeff. (1984). The Goal: A Process of Ongoing Improvement. Great Barrington, MA: North River Press.

You can find more information and purchase the book here: The Goal on Amazon

No I do not make money out of endorsing this book - the author is dead and it's just about the most compelling book on managing systems I ever read.

See License System.