Theory of Constraints
TOCThe Theory of Constraints is a method for improving system performance by identifying and managing the single biggest limiting factor, or constraint.
The Theory of Constraints (TOC) is a management philosophy for system improvement. It states that every complex system, such as a manufacturing plant, has at least one constraint that limits its ability to achieve its goal. The goal is typically to make more money, which is achieved by increasing throughput while reducing inventory and operational expense.
TOC uses a process called the Five Focusing Steps. First, identify the system's constraint. Second, decide how to exploit the constraint by getting the most output from it. Third, subordinate everything else to that decision, meaning other processes support the constraint. Fourth, elevate the constraint's capacity if it is still a limitation. Fifth, if the constraint is broken, go back to step one to find the new constraint.
On the shop floor, TOC shifts focus from optimizing individual machines to optimizing the entire production flow. Instead of having every machine run at 100% capacity, non-constraint machines may run at lower rates. This prevents the buildup of excess work-in-progress (WIP) inventory before the constraint. The result is faster overall production, lower inventory costs, and improved on-time delivery.
Manufacturers implement TOC by first mapping their processes to find the bottleneck. This is often the workstation with the most WIP piled up in front of it. Once identified, they might create a buffer of work before the constraint to ensure it never starves for material. They also schedule the constraint to run continuously and prioritize its maintenance.
A furniture factory's finishing department can only handle 20 cabinets per hour, while assembly can produce 30. The finishing department is the constraint. The plant manager schedules the finishing department to run through breaks and ensures a buffer of 10 unfinished cabinets is always waiting, increasing total plant output.
What is the difference between a bottleneck and a constraint?
A constraint is the single factor limiting the entire system from achieving its goal. A bottleneck is a resource with less capacity than the demand placed on it. The system's constraint is often a bottleneck, but not all bottlenecks are the system's constraint.
How do I find the constraint in my factory?
Look for the process with the largest and most consistent pile of work-in-progress (WIP) waiting in front of it. This is typically the system's constraint.
Is the constraint always a machine?
No. A constraint can be a person with a specific skill, a company policy, a material supply issue, or even market demand.
What does 'subordinate everything else' mean?
It means all other processes should be managed to support the constraint's performance. Non-constraint machines should not run at full capacity if it creates excess WIP that the constraint cannot handle.
How often should I re-evaluate my constraint?
Re-evaluate the constraint whenever you successfully increase its capacity. The constraint may move to another part of the process, requiring a new analysis.
Bottleneck
A bottleneck is the slowest point in a production process that limits the entire system's output.
Throughput
Throughput is the rate at which a system produces finished goods over a specific period.
Lean Manufacturing
Lean manufacturing is a production method focused on maximizing customer value by systematically eliminating waste from processes.
Value Stream Mapping
Value Stream Mapping is a flowcharting method used to illustrate, analyze, and improve the steps required to deliver a product or service.
Continuous Improvement
Continuous improvement is the practice of making small, ongoing changes to manufacturing processes to increase efficiency and quality.