Theory of Constraints (TOC) is a management philosophy developed by Eliyahu Goldratt. This methodology focuses on identifying and optimising bottlenecks within a process to improve overall flow and performance. The idea of bottlenecks is central to TOC and is described as the crucial factor that limits the speed of the entire process.
ORIGIN
The founder of TOC, Eliyahu Goldratt, introduced the concept to the general public with his book “The Goal” (1984), a business novel explaining TOC in an accessible way. Among other things, Goldratt described his understanding of TOC through a “story within the story”, about guiding a group of young scouts, where he recognised the role of bottleneck in a process by observing how the slowest runner determined the arrival time of the whole group. Furthermore, the whole book is about a factory manager gaining insight into how bottlenecks affect, and in which he learns, among other things, from a former physics teacher of his how you should think in processes and outputs.
PRINCIPLES OF TOC
- Identify the bottleneck: The first step is to identify the activity within the process that is restricting flow and therefore affecting the overall performance of the system. This can often be identified by looking at intermediate stocks, high workloads and chaotic situations.
- Optimise bottleneck capacity: It is essential to ensure that the bottleneck performs optimally and no capacity is lost. This means avoiding unnecessary downtime by, for example, creating buffers and minimising interruptions.
- Align all processes with the bottleneck: Since the speed of the bottleneck determines the speed of the entire process, it is important to align all activities with the capacity of the bottleneck. This prevents overproduction and unnecessary intermediate stocks.
- Improve the bottleneck: All initiatives within the organisation should focus on improving the bottleneck, as only improvements on the bottleneck increase the overall throughput of the process.
- Repeat the process: Improving the bottleneck will lead to the creation of new bottlenecks. Therefore, it is important to continuously identify and improve to keep optimising system performance.
EXAMPLES OF BOTTLENECKS
Examples of bottlenecks can vary, from machine capacity and equipment reliability to knowledge of specific employees and lead time of approval processes. These bottlenecks limit the throughput of the process and thus affect the overall performance of the system.
INTEGRATION WITH LEAN AND OTHER METHODOLOGIES
The principles of Theory of Constraints are closely related to the flow principles of Lean. TOC principles can be integrated with other improvement methodologies, such as Six Sigma, to help organisations optimise their processes and increase competitiveness.
Theory of Constraints provides a structured approach for organisations to identify, optimise and improve bottlenecks, leading to improved flow, efficiency and profitability.
THEORY OF CONSTRAINTS AS PART OF OUR TRAINING COURSES
TOC (Bottleneck) is covered during our Yellow Belt, Green Belt, Black Belt Service and Black Belt Manufacturing training courses.
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