Theory of Constraints

A small number of constraints prevents any management system from achieving more of its goals

  • Have a focusing process to identify constraint; then restructure to address.
  • Fundamental assumption: Throughput accounting can measure success for organization
    • Throughput: Rate at which goals are achieved
    • Operational Expense: Money spent achieving goals
    • Investment/Inventory: Money invested in system
  • Focus Process Loop
    • Identify constraint
    • Decide how to exploit it
      • Seeing constraints as opportunity not a problem.
    • Subordinate everything to the above decision
      • Make sure all parts of the system are tuned to support the constraint
      • (Most important yet hardest step)
    • Alleviate the constraint
  • Thinking process
    • What needs changing?
    • How should it change?
    • What action will change it?