The Theory of Constraints

The Theory of Constraints is a methodology for identifying the most critical limiting factor that stands in the way of achieving a goal and then systematically improving that constraint until it is no longer the limiting factor. In manufacturing, the constraint is often referred to as a bottleneck.

The core concept of the Theory of Constraints is 

• Every production system is composed set of chained events the led to the creation of finished goods or services.
• The whole system is called Flow, the raw material goes in one end, and finished goods come from the other end.
• The rate of Output of the Flow is directly proportional to the Output of the weakest link in the Flow. And the weakest link is called a bottleneck.
• To improve capacity, we just have to improve the bottleneck. 
• Its everyone's responsibility in the organization to swarm around and fix the bottleneck if it is stuck.
• Any improvements not done at the bottleneck is just an illusion.

The Five Focusing Steps

The Theory of Constraints provides a specific methodology for identifying and eliminating constraints, referred to as the Five Focusing Steps. It is a cyclical process.

Identify

Identify the current constraint (the single part of the process that limits the rate at which the goal is achieved).

Exploit 

Make quick improvements to the throughput of the constraint using existing resources (i.e. make the most of what you have).

Subordinate 

Review all other activities in the process to ensure that they are aligned with and truly support the needs of the constraint.

Elevate 

If the constraint still exists (i.e. it has not moved), consider what further actions can be taken to eliminate it from being the constraint. Normally, actions are continued at this step until the constraint has been “broken” (until it has moved somewhere else). In some cases, capital investment may be required.

Repeat 

The Five Focusing Steps are a continuous improvement cycle. Therefore, once a constraint is resolved the next constraint should immediately be addressed. This step is a reminder to never become complacent – aggressively improve the current constraint…and then immediately move on to the next constraint.

Although this is created initially for the Manufacturing industry to manage production system, it could really be applied to anything.

The idea is to concentrate the core efforts on most pressing issues facing the organization.