Everything about Theory Of Constraints totally explained
Theory of Constraints (TOC) is an overall
management philosophy. Dr.
Eliyahu M. Goldratt introduced the theory of constraints in his seminal 1984 book titled 'The Goal'. It is based on the application of scientific principles and
logic reasoning to guide human-based organizations. The publicity and leadership behind these ideas has been dominated by Dr. Goldratt through a series of books, seminars and workshops.
TOC is geared to help organizations continually achieve their goals.
TOC is based on a set of basic principles (
axioms), a few simple processes (Strategic Questions, Focusing Steps, Buy-In processes, Effect-Cause-Effect), logic tools (The Thinking Processes or TP) and through the logical derivation of these some applications to specific fields (Operations, Finance, Distribution, Project Management, People Management, Strategy, Sales and Marketing).
According to TOC, every organization has - at any given point in time - at least one constraint which limits the system's performance relative to its goal (see
Liebig's law of the minimum). These constraints can be broadly classified as either an internal constraint or a market constraint. In order to manage the performance of the system, the constraint must be identified and managed correctly (according to the Five Focusing Steps below). Over time the constraint may change (for example, because the previous constraint was managed successfully, or because of a changing environment) and the analysis starts anew.
Basic Principles of TOC
Explicitly articulated in SLP 7 - Managing People
The principles are treated as axioms, and therefore have no proof. Even so Goldratt provides and a variation called Simplified Drum-Buffer-Rope (S-DBR).
Drum-Buffer-Rope is a manufacturing execution methodology, named for its three components. The
drum is the physical constraint of the plant: the work center or machine or operation that limits the ability of the entire system to produce more. The rest of the plant follows the beat of the drum. They make sure the drum has work and that anything the drum has processed doesn't get wasted.
The criticism fails to acknowledge that the earlier approaches didn't explain the Theory nor did they lead to the level of results that are routinely achieved through TOC. Dr Goldratt has always said the methodologies shouldn't compete they should work together to create better results and generate and disseminate more knowledge.
Moreover, earlier approaches were often centered around; continuous mass production rather than discrete batch production, assumptions of infinite capacity rather than finite capacity, and many localised but ineffective safety buffers rather than one or a few critical global safety buffers.
Perhaps most importantly TOC is "portable" over a wide range of logistical problems that were previously intractable.
Further Information
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