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TheoryofConstraints
Dr.EliGoldrastartedthetheoryofconstraints(TOC).Hebasedthismanagementtheorythat
everysystemhasatleastoneconstraintlimi ngitfromgengmoreofwhatitstrivesfor.Ifthis
werenottrue,thenthesystemwouldproduceinniteoutput.

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Theseconstraintsdeterminetheoutputofasystemwhethertheyareacknowledgedornot.
Therefore,itisinamanager'sbestinteresttoiden fyandreducethesystemconstraintswithinthe
organiza on.

Thetheoryofconstraintsisbothdescrip veandprescrip veinnature;itnotonlydescribesthe

causeofsystemconstraints,butalsoprovidesguidanceonhowtoresolvethem.Thispageonly
providesanoverviewofboth.Webeginwithadiscussionofsomekeyunderlyingconcepts:

Systemsaschains
Throughput,inventory,andopera ngexpense(T,I,OE)

SystemsasChains

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Asystemisacollec onofinterrelated,independentprocessesthatworktogethertoturninputs
intooutputsinthepursuitofsomegoal.

Aspicturedabove,achainalwayshasoneweakestlink.Ifoneappliesforcetothechainatan
increasingrate,itwouldeventuallybreakattheweakestlink.

Therefore,theweakestlinkistheconstraintthatpreventsthesystem(chain)fromdoinganybeer
atachievingitsgoal(accep ngforce).

Goldrastatesthatatanygiven methereisonlyoneconstraintinasystemthatlimitstheoutput
oftheen resystem.Theremaininglinksareknownasnonconstraints.

Aerstrengtheningoneconstraint,thesystemisstronger.However,thesystemdoesnotbecome
innitelystronger.Theconstraintsimplymigratestoadierentcomponentofthesystem.Some
otherlinkisnowtheweakestandalltheotherlinksarenonconstraints.

AnExample

Tobeerunderstandthetheoryofconstraintsandnonconstraints,consideraproduc onsystem
thatrunsrawmaterialsthroughthreecomponentprocessesandthenturnsthemintoanished
product.

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Withinthissystem,eachprocessisequivalenttoalinkintheproduc onchain.Whereisthe
constraintinthischain?ProcessBistheweakestlink.ProcessBproducestheleastatonlysixunits
perday.ProcessAandCarethenonconstraints.

ImaginethatthemanufacturerimprovesprocessBun litcanproduce18unitsperday.Now,
processCbecomesthesystemconstraintwhilethenonconstraintsareeverywhereelse.Ifprocess
improvementscon nueun lallprocessesareproducing18units/dayorhigher,thesystem
constraintbecomesthemarketplace,whichcanacceptonly15unitsperday.

Atthispoint,internalconstraintshavebeenreplacedbyanexternalconstraint.Overall,thetheory
ofconstraintsemphasizesxingtheweakestlinkinthechainthesystemconstraintandtemporarily
ignoringthenonconstraints.Inthisway,thetheoryhasaprofoundimpactonprocess
improvement.

Ratherthanspreadinglimited me,energy,andresourcesacrossanen resystem(whichmayor

maynotresultintangibleresults),teamsfocusonthatpartofthesystemwiththepoten alto
produceimmediatesystemimprovement.

Throughput,Inventory,andOpera ngExpense

Inordertodeterminetheeectthatanylocalac onhasonprogresstowardasystemgoal,
Goldracreatedasimplerela onshipchartbetweenthreesystemlevelmeasurements:
throughput(T),inventory(I),andopera ngexpense(OE).

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GivenGoldra'sthreedimensions,organiza onshavethreedierentop onsforsystem

improvement:increasingT,reducingI,orreducingOE.

Theprac callimitsofreducinginventoryandopera ngexpensesarerela velylow,asasystem

can'tproducemanyoutputswithoutthem.Theore cally,there'snoupperlimittohowmuchan
organiza oncanincreaseitsthroughput,butmarketsizesarelimited.

Thepoten alforincreasingTtendtobemuchhigherthanthepoten alfordecreasingIandOE.

Therefore,abasicmodelforsystemimprovementsfocusesonincreasingTandmakingreduc on
ofIandOEasecondarypriority,asshownbelow

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Basicprinciples

Goldraoutlinesseveralprinciplesthathelpcreatesanenvironmentconduc vetotheprescrip ve
partofhistheory.Theprescrip vepartofthetheoryofconstraintshelpsorganiza onsanswer
threemanagementques onsregardingsystemsandtheirconstraints:

Whereistheconstraint?
Whatshouldwedowiththeconstraint?
Howdoweimplementthechange?

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TheFiveFocusingSteps

Step1:Iden fythesystemconstraint.Intherststep,anorganiza oniden esthepartofthe

systemthatcons tutestheweakestlink.Thendeterminewhetheritisaphysicalconstraintora
policyrelatedissue.

Step2:Decidehowtoexploittheconstraint.Organiza onsexploittheconstraintbyu lizingevery

bitoftheconstrainingcomponentwithoutcommingtopoten allyexpensivechangesand/or
upgrades.

Step3:Subordinateeverythingelse.Withaplaninplaceforexploi ngtheconstraint,the
organiza onadjuststherestofthesystemtoenabletheconstrainttooperateatmaximum
eec veness.

Evaluatetheresultstoseeiftheconstraints llholdsbacksystemperformance.Ifitis,the
organiza onproceedstoStep4.Itnot,theconstrainthasbeeneliminatedandtheorganiza on
skipsaheadtoStep5.

Step4:Elevatetheconstraint.Ifanorganiza onreachesStep4,itmeansthatSteps2and3were
notsucientinelimina ngtheconstraint.Atthispoint,theorganiza onelevatestheconstraintby
takingwhateverac onneededtoeliminateit.

Thismayinvolvemajorchangestotheexis ngsystem,suchasreorganiza on,dives ture,or

capitalimprovements.Sincethesetypicallyrequireasubstan alupfrontinvestment,the
organiza onshouldbecertainthattheconstraintcannotbeimprovedfromSteps1through3.

Step5:GobacktoStep1.Aeraconstraintisbroken,theorganiza onrepeatsthestepsallover
again,lookingforthenextthingconstraininglink.Atthesame me,theorganiza onneedsto
monitorhowthechangesrelatedtosubsequentconstraintsimpactthealreadyimproved
constraints.

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TheFiveLogicalTools

1)Currentrealitytree(CRT).Helpsorganiza onsworkbackwardfromanundesirableeectto
iden fythecoreproblem.

2)Conictresolu ondiagram(CRD).Allowsorganiza onstoresolvehiddenconictsthatusually

perpetuatechronicproblems(alsoknownastheevapora ngcloud)

3)Futurerealitytree(FRT).Enablesorganiza onsveriesanac onproducesthedesiredresults.It

alsoiden esandremovesanyunfavorablenewconsequencesfromtheac on.

4)Prerequisitetree(PRT).Helpsorganiza onsimplementadecisionbyprovidingarecommended
sequenceofeventsandiden fyingpoten alobstacles.

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5)Transi ontree(TT).Providesorganiza onswithadetailed,stepbystepac onplanfor

implemen ngadecision

Inprac ce,thevelogictreescanbeusedindividuallyortogetherasanintegratedthinking
process.Thetablebelowshowshowthevetoolscanbeusedtogetherinansweringthethree
managementques onsaboutchange.

TheoryofConstraintsisanimportanttheorybehindleanmanufacturing
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