The Theory of Constraints (TOC) Thinking Processes
Estimated reading time: 5 minutes.
The Theory of Constraints (TOC) is a management paradigm that views any manageable system as being limited in achieving more of its goals by a very small number of constraints. There is always at least one constraint, and TOC uses a focusing process to identify the constraint and restructure the rest of the organization around it. TOC adopts the common idiom "a chain is no stronger than its weakest link". That means that organizations and processes are vulnerable because the weakest person or part can always damage or break them, or at least adversely affect the outcome.
TOC was developed by Dr Eliyahu M. Goldratt, an Israeli physicist, and is based on the idea that every system has at least one constraint that limits its performance. The goal of TOC is to identify and manage these constraints to improve system performance.
TOC is a powerful tool for improving the performance of any system, from a small business to a large organization. It has been used successfully in a wide variety of industries, including manufacturing, healthcare, and service industries.
The five steps of TOC are:
- Identify the system's goal.
- Identify the system's constraints.
- Decide how to exploit the system's constraints.
- Subordinate everything else to the decision in step 3.
- Elevate the system's constraints. TOC is a proven methodology for improving the performance of any system. If you are looking for a way to improve your organization's performance, then TOC is a great option.
Here are some of the benefits of using TOC:
- It can help you to identify the root causes of problems.
- It can help you to develop solutions that address the root causes of problems.
- It can help you to improve the performance of systems.
- It can help you to think more systemically.
- It can help you to communicate your ideas more effectively. If you are looking for a powerful tool for problem-solving, then TOC is a great option. It is a simple tool to use, but it can be very effective in helping you to identify and address the root causes of problems.
The Thinking Processes
The thinking processes in Eliyahu M. Goldratt's theory of constraints are the five methods to enable the focused improvement of any cognitive system (especially business systems). The purpose of the thinking processes is to help answer questions essential to achieving focused improvement.
| Question | Sufficient Cause (If ... then ...) | Necessary Condition (In order to ... we must ...) |
|---|---|---|
| What to change? | Current Reality Tree (CRT) | |
| What to change to? | Future Reality Tree (CRT) | Evaporating Cloud (EC) |
| How to change? | Transition Tree (TRT) | Prerequisite Tree (PRT) |
Each of these five thinking processes is supported in Vithanco by a dedicated Notation.
The thinking processes were described by Goldratt as a sequel to the first TOC novel ("The Goal") by the Name "It's not luck". Lisa Scheinkopf refers to the development process of the thinking processes in the first chapters of her "Thinking for a Change" book.
A more thorough rationale is presented in What is this thing called Theory of Constraints and how should it be implemented by Goldratt.
There is a multitude of material regarding the TOC TP. I will add some better examples here over time:
- TOC ICO: TCO TP Basics Workshop (Vicky Mabin)
- www.lomag-man.org/normes/normes_isa/documents/2002-05-ISAD12.ppt
Theory of Constraints in simple terms
The Theory of Constraints (TOC) was developed by Eliyahu Goldratt. The basic idea of TOC is that in a production the slowest work step will determine the overall output. If you want to increase the overall output then you need to increase the throughput on the slowest work step, which is ultimately constraining the whole production. If you produce too many goods before the constraint, that is the slowest work step, then you will just have more work in progress but not more output. Managing the work in progress will eventually even decrease your output. You should therefore adjust your workload before the constraint to the amount of the constraint, even if that means that the machine utilisation will go down. Please note, that if you increase the throughput at the constraint then another work step might become the constraint. But by definition, there is always at least one constraint.
If you improve a step that is not the constraint then you won't impact overall output. If the work step is before the constraint then you increase work in progress (WIP) creating a problem of ever more WIP that might need to get stored etc. If the improvement was behind the constraint then the work step will do the same amount of work in a shorter time - but there won't be more work to do. Machine utilisation might fall - after you invested in that step. Many production processes are not plain linear, with many variations and different stations for the same work step, etc. Hence it is not always obvious where the constraint is at any given time and it might be that for different products different work steps become the constraint, in which case the product mix has an impact on production output. Eliyahu Goldratt wrote a business novel on the above to explain it in much more detail, called The Goal.
Now, forget about production and think of any work, whether it is blue or white-collar. Nowadays, most people are working together with others, each person doing a few work steps. By definition, there will be a constraining step that holds back the rest of the work. If you could identify that constraint and improve it then the overall throughput will increase to the point of the next constraint.