ToC: Optimisation in critical work

The Core Idea – Every system has a limiting factor or constraint. Focusing improvement efforts to better utilise this constraint is normally the fastest and most effective way to improve profitability.

The Theory of Constraints begins with the idea that you must search for the weakest link in any process.

"No chain can ever be stronger than its weakest link."

Similarly, every system must have a constraint that limits it's output. We know this because no system has infinite output. For example, you will never find any company with infinite sales or profit!

Note that every chain will have ONE (and only one) weakest link. Strengthening the other links can never increase the overall strength of the chain, because they are not the weakest. In fact, strengthening a non-weakest link will probably DECREASE the overall strength of the chain due to the added weight.

Similarly, attempts to optimize each individual process and function tend to ignore the impact on the constraint, thereby causing a variety of unforeseen problems that reduce the overall performance and effectiveness of the organisation.

The Theory of Constraints uses a cyclical method, the 5 Focusing Steps, to identify and then improve or eliminate constraints.

The 5 Focusing Steps

The Theory of Constraints uses a cyclical method, the 5 Focusing Steps, to identify and then improve or eliminate constraints.

1. Identify the current constraint – what is limiting the rate at which your goal is achieved.
2. Exploit the constraint – this step involves looking at how the constraint can be improved using existing resources.
3. Subordinate everything else to the constraint. By definition, the non-constraint steps will have some “slack” – this can be used to support and improve the constraint.
4. Elevate the constraint. If the low-effort improvements of exploiting and subordinating the constraint have been attempted but unsuccessful, you may need to invest extra capital to eliminate the constraint. 
5. Repeat the process with the next constraint.

The Thinking Processes are used to answer the following three questions, which are essential to TOC:

• What needs to be changed?
• What should it be changed to?
• What actions will cause the change?

Delivering Extraordinary Performance Improvements

Implementing the Theory of Constraints has yielded remarkable results for companies around the world. An independent study discovered that companies achieved the following impact (on average):

A great aspect of applying the Theory of Constraints is that remarkable improvements are possible with a relatively low investment. The first constraints to be eliminated – the low-hanging fruit – are typically solved by making changes in working policy and processes.