What is TOC?

Filed under Critical Chain | Posted by PMStudent

I’m a Theory of Constraints (TOC) enthusiast. So what exactly is TOC? Here’s a short, short summary.

In short, it’s a method of identifying and strengthening the weakest link (constraint) in any process, in an iterative approach to ongoing improvement. There are also tools that go along with it to help identify assumptions and constraints, etc. TOC was developed by Eli Goldratt. The Avraham Y. Goldratt Institute is the organization that maintains the TOC body of knowledge.

Part of TOC are the 5 focusing steps, which speak to using TOC for continuous improvement:

1. Identify the constraint
Figure out where the bottleneck is, from a total system perspective, not a local part of the system.

2. Exploit the constraint
Get the most you can out of the bottleneck, it will directly increase the throughput of the whole system

3. Subordinate everything to the above decision
Change habits and policies if need be to make sure you are getting the most out of the constraint. No more “this is the way we’ve always done it.” Also, don’t put more work into the system than what the constraint can handle, it just builds up work in progress (WIP) in front of the constraint. This means running a machine in a manufacturing process (for example) so you’re getting 100% utilization is the wrong thing to do if it’s just building up WIP in front of the constraint. Change your thinking….we want global optimization, not local optimization. Nothing is sacred except the goal of global improvement.

4. Elevate the constraint
If you need more throughput from the constraint still, consider adding to it’s capacity by offloading some work, adding extra resources, etc. Speed up the bottleneck!

5. Go back to step 1 once the constraint is broken
“Breaking a constraint” means that you’ve improved the bottleneck to the point that now, the bottleneck has moved to somewhere else in the system. Now, don’t let the new processes and policies become roadblocks to future improvement! Go back to step 1 and start over!

Here’s a TOC concept cartoon from TOCCA