This website covers topics on knowledge management, personal effectiveness, theory of constraints, amongst other topics. Opinions expressed here are strictly those of the owner, Jack Vinson, and those of the commenters.

Constraints are good

Pop quiz: Do you want a bottleneck in your business?  Why or why not?

The interesting thing about Theory of Constraints is that it treats the constraint / bottleneck as a GOOD thing, rather than the negative connotation usually given to bottlenecks and constraints.  Theory of Constraints also suggests that there is one constraint, not many. 

The TOC's five focusing steps have to do with creating a business strategy as much as they have to do with running the business.  In fact, some writings suggest that step one is "decide where the constraint should be," rather than simply identifying it.  The latest thinking in TOC is that the best location for the constraint is the market: In other words, the internal operations of the business should have enough capacity so that it does not have to reject business. 

The real fun in TOC is in step 3, subordinating all other activities to the decision on how to exploit the constraint.  Making a strategic decision about the location of the constraint has major implications on how the business is run and managed.  Think about it.  The constraint is in one location - all other parts of the business need to act in accordance with this decision, or else the business can fail to fully utilize the constraint.  At worst, the constraint could move unexpectedly, creating chaos where there should be control.  (Unintentional reference to Get Smart.)

So, if we want to keep the constraint strategically located, what's the point of Steps 4 and 5?  A growing business always needs to increase its capacity.  With TOC, the business has a strategic mechanism on where to look for that capacity - on the constraint.  Increasing capacity anywhere else is a mirage (with exceptions).  The caveat with capacity increases is that increasing the capacity of the constraint may move the constraint due to capacity limitations elsewhere.  If the constraint is in a strategic location, this means that those near-constraints need more capacity BEFORE the capacity of the strategic constraint is increased. 

This is the process of ongoing improvement (POOGI) that is central to the ongoing capability of Theory of Constraints to provide value to a business.  There is a great story about this from Valmont Industries at the Goldratt Institute website.

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