theory of constraints

**Theory of constraints** is the **management framework that improves system performance by focusing on the primary limiting constraint** - it provides a repeatable cycle for identifying, exploiting, and elevating the bottleneck while aligning all other resources to it. **What Is Theory of constraints?** - **Definition**: Goldratt framework built around the idea that every complex system is limited by at least one constraint. - **Five Focusing Steps**: Identify, exploit, subordinate, elevate, and then repeat when the constraint moves. - **System View**: Local efficiency is secondary to global throughput, inventory, and operating expense balance. - **Operational Outputs**: Higher throughput, lower WIP, and clearer priority rules for execution. **Why Theory of constraints Matters** - **Strategic Focus**: Prevents diffusion of effort across low-impact improvement activities. - **Throughput Growth**: Constraint-centric actions produce measurable whole-system output gains. - **Decision Clarity**: Subordination rules align planning, scheduling, and support around one priority. - **Financial Relevance**: TOC links operational decisions directly to cash-generating throughput. - **Adaptability**: Framework remains effective as bottlenecks change with demand and product mix. **How It Is Used in Practice** - **Constraint Diagnosis**: Use flow metrics and on-floor validation to confirm current limiting resource. - **Exploit First**: Improve uptime, setup, and quality at the constraint before buying new capacity. - **Subordinate System**: Synchronize upstream release and downstream pull to protect constraint flow. Theory of constraints is **a high-discipline operating model for throughput-driven improvement** - sustained gains come from managing the system around its current limiter.