Theory of constraints (TOC)

It is a methodology for identifying the most important limiting factor (i.e. constraint) that stands in the way of achieving a goal and then systematically improving that constraint until it is no longer the limiting factor. It was first published in The Goal by Eliyahu M. Goldratt and Jeff Cox in 1984. TOC conceptually models the manufacturing system as a chain, and advocates focusing on its weakest link. Goldratt defines a five-step process that a change agent can use to strengthen the weakest link, or links, which includes

• Identify the System Constraint – The part of a system that constitutes its weakest link can be either physical or a policy.
• Decide How to Exploit the Constraint – Goldratt instructs the change agent to obtain as much capability as possible from a constraining component, without undergoing expensive changes.
• Subordinate Everything Else – The non-constraint components of the system must be adjusted to a “setting” that will enable the constraint to operate at maximum effectiveness. Once this has been done, the overall system is evaluated to determine if the constraint has shifted to another component. If the constraint has been eliminated, the change agent jumps to step five.
• Elevate the Constraint – “Elevating” the constraint refers to taking whatever action is necessary to eliminate the constraint. This step is only considered if steps two and three have not been successful. Major changes to the existing system are considered at this step.
• Return to Step One, But Beware of “Inertia”

The process of delivering a product or service is very much like a chain; each resource and function are linked. It only takes one element in the system to fail, to cause the entire system to fail. In order to improve the system, we must optimize the weakest link; the constraint or drum. All other resources are subordinated to that. In scheduling terms, we

• Develop a detailed schedule for the drum resource
• Add buffers to protect the performance of that resource
• Synchronize the schedule of all other resources to the drum schedule

The location of a constraint within a system is known as a bottleneck. In a bottleneck, the demand for service exceeds the capacity to serve. This means the throughput of the system is dependent on the throughput of the bottleneck.

Throughput is one of the three critical performance measures of any production system

• throughput, or production rate, is the rate at which a system generates output
• flow time, or lead time, is the time required for a defined amount of work to be completed
• inventory, or work in progress, is the number of products being produced represents (the money value of) all raw material, unfinished and finished products and assets waiting to be processed for customers

You can use a number of techniques to alleviate bottlenecks

• Leaning is an umbrella term for the wide array of tools in the Lean methodology (e.g., kanban-pull).
• Standardizing involves documenting work and doing it the same way every time. Standardizing work alleviates bottlenecks by saving time and preventing mistakes from being repeated.
• Fool-proofing, or poka-yoke, alleviates bottlenecks by preventing errors (e.g., a factory machine might be designed to input material only one way so that it can’t jam).
• Flexible resourcing involves putting skilled people in the right place, at the right time, for the required duration. This prevents bottlenecks by providing human resources with options for completing work in a process.
• Job leveling is an analysis of each person’s role in the process to determine where improvement could be made. It prevents bottlenecks by making sure physical and human resources are evenly matched for maximum efficiency and effectiveness.