A Publication of WTVP

Have you ever looked around your plant and noticed a major bottleneck is holding back performance? Or a machine continually breaks down and raw material arrives late? Eliminating these constraints could have a positive impact on your productivity and profits.

A constraint is anything that prevents the system from doing more of what it was designed to accomplish. For a business, a constraint is whatever keeps it from generating more profits. And to achieve its goals, a company must learn how to manage its constraints. To get started, a company should adopt a Theory of Constraints (TOC) thinking process.

TOC thinking is actually a collection of tools that help diagnose problems, find solutions, and develop successful remediation plans. The process helps a company logically and systematically answer three continuous improvement questions: “What do we change?” “What do we change to?” and “How do we make this change happen?” TOC involves a five-step ongoing improvement process, designed to ensure company efforts remain on track.

  1. Identify the system’s constraint. The first step in the thinking process is to define system and company goals and examine all actions and measurements to determine how well or how poorly they help the company achieve these goals. The limits of the system are examined and constraints within the system are pinpointed.

    A company can have constraints or bottlenecks of a physical nature such as the quality, quantity, and inventory of materials; inefficient usage of equipment or equipment not operating to its full potential; inefficient workers or understaffing of certain activities; not enough product to meet market demand; or not enough sales to consume capacity on hand.

  2. Decide how to exploit the system’s constraint. Determine how to work within the system’s constraint to get the maximum throughput out of existing resources. This is often a difficult process that requires strategic decision-making. For example, if the constraint is in sales, exploiting the constraint means developing and implementing a strategy utilizing existing resources to develop more sales. If the constraint is personnel or equipment, it means determining a way to keep that person or equipment productive all the time.
  3. Subordinate everything else to the decision made in step No. 2. Make effective management of the existing constraint the top priority. Adjust or synchronize the efforts of the entire organization to support the capabilities of the constraint. For example, if the constraint is a machine, delivery of materials may need to be adjusted to work within the capabilities of the machine.
  4. Increase—or elevate—the overall output of the constraint. In earlier steps the organization was optimized by policy changes. In this step the constraint actually becomes altered through efforts such as reducing setup and process times, investing in other process improvements, increasing staff, implementing new technologies, and purchasing other equipment
  5. Don’t let inertia cause a new constraint and go back to step No. 1 to start removing the next constraint. If the above steps break the constraint, make sure a new constraint isn’t created by the efforts made to remove the first constraint. Find the next weakest link limiting system performance, go back to step one, and follow the same five steps to break it. But beware: all of the policies established to break the first constraint should not affect or blind management’s efforts to eliminate subsequent constraints and improve output. IBI