Theory of Constraints (ToC)
This week we continue our series on process improvement with another widely used methodology: Theory of Constraints.
Theory of Constraints is a relatively newer methodology, developed by Dr. Eliyahu Goldratt in the late 70s. It focuses on constraints within a system of interdependent processes. A constraint is defined as “anything that prevents a system from achieving a higher performance relative to its goal”. As the weakest link determines the strength of the overall chain, the ToC states that the constraint in a system determines the performance of that system. When applied to manufacturing the bottleneck is the constraint in the system, and it limits the throughput of the system.
ToC proposes five focusing steps to deal with the constraints in any system:
IDENTIFY the constraint(s) to achieving the goal.
EXPLOIT the constraint(s)
SUBORDINATE & synchronize the constraint(s)
ELEVATE the performance of the constraint(s)
REPEAT the process
Main goal of ToC is to increase the throughput. ToC promises dramatic results within a very short period of time, mostly in a few weeks. The investment required can vary from zero to major capital expenditures, depending on the Elevate step (Step #4).
Next Week – Six Sigma