The Theory of Constraints is a popular methodology for organizational change and improvement that was first conceptualized by Dr. Eliyahu Goldratt and introduced through his bestselling novel, The Goal: A Process of Ongoing Improvement. The Theory of Constraints popularity grew quickly and is now a very popular methodology among many organizations. It’s growth and popularity has driven many to compare it to another improvement methodology that is also very popular –Lean.
This is the first in a series of posts that will dive into the Theory of Constraints and its concepts, methods, and goals. Later, I will compare and contrast it with the continuous improvement methods and thinking behind Lean.
What is the Theory of Constraints?
You’re only as strong as your weakest link. The basic concept behind the Theory of Constraints is that every organization has a weak link in the form of a constraint. Constraints can be defined as any limiting factor that inhibits an organization from achieving a desired goal or anything else they might be striving for, which is usually profit. This could also be referred to as a bottleneck.
The Theory of Constraints is a methodology backed by a scientific approach to define and eliminate your weakest link. The hypothesis is that all complex systems consist of multiple linked activities like a chain, including manufacturing processes and in each chain, there is a weak link. This is then the constraint that is to be removed in order to improve your organization.
Kaizen Guide: Better your business with continuous improvement
To be successful, you can’t make an improvement once and forget about it. Effective lean businesses use kaizen, which means “continuous improvement”. In kaizen, everyone looks for ways to improve processes on a daily basis. This Kaizen Guide explains the kaizen mindset, basic kaizen concepts including the PDCA cycle, and real-world examples.
One of the strengths to the Theory of Constraints is that it emphasizes focus in world of information overload. It prioritizes improvement activities down to the current constraint and the methodology for rapidly improving it.
To fully understand the Theory of Constraints, you have to understand what a constraint is. As stated earlier, a constraint is anything that prevents an organization from making progress towards a goal. They can take shape in many forms and to help you better understand them, here are some common categories of constraints:
|Physical||Usually equipment, but can also be other items, such as lack of materials, not enough people, or insufficient space.|
|Policy||How you are supposed to do the work described. This could include company procedures, union contracts, or government regulations.|
|Paradigm||The habits and beliefs engrained into the culture that performs the work.|
|Market||When you begin to produce more than you are selling.|
The goal of just about any manufacturing company is to make a profit. The Theory of Constraints includes a set of tools to help you do just that, including:
- The Five Focusing Steps
- The Thinking Processes
- Throughput Accounting
The Five Focusing Steps
- Identify the current constraint: The constraint can be identified through various methods. This could be any one of the before mentioned constraints, but is the single part of the process that is currently limiting the rate in which the goal is achieved.
- Exploit the constraint: Now that you have identified the constraint, you need to decide how to exploit it. Goldratt says the change agent needs to obtain as much capability as possible from a constraint, without undergoing expensive changes or upgrades –make the most of what you currently have.
- Subordinate: You can now make and implement decisions to ensure rules, behaviors and measures enable, rather than impede its ability to exploit the identified constraint.
- Elevate the system’s constraint: If the first three steps are successful, you can now take whatever action necessary to eliminate the constraint. All major changes to the existing system are considered in step four.
- Don’t allow inertia to set in: Remember this is a continuous improvement process. Once you have eliminated the constraint, return to step one and repeat. There will always be another constraint.
The five focusing steps are the keys to keeping focused and on task with the big picture. They allow you to keep track of where you are in the process and understand what still needs to be done to eliminate the constraint.
Stay tuned for future posts in this series that will expand on the thinking process, throughput accounting, as well as a breakdown the Lean and Theory of Constraints similarities and differences.
Information used to create this post was from the following sites:
- Theory of Constraints: Part 4
- Theory of Constraints: Part 3
- Theory of Constraints: Part 2
- The Improvement Kata: Part 2
- The Improvement Kata: Part 3
- The Improvement Kata: Part 1
- Theory of Constraints– creativesafetysupply.com
- On the Constraints of Bottlenecks– blog.creativesafetysupply.com
- Introduction To The 5s Process As Part Of Lean Management Efforts– 5snews.com
- Kaizen– blog.5stoday.com
- Putting Into Effect The Basic Kaizen Principles– kaizen-news.com
- No Problem is a Problem– jakegoeslean.com