First written about in The Goal, by Eli Goldratt - and more recently in The Phoenix Project, by Gene Kim and friends - the Theory of Constraints is a management paradigm that states that there is one single constraint that dominates the effectiveness (or ineffectiveness) of any process. Rather than trying to solve every bottleneck or constraint we find, focus on the single biggest constraint.
The Theory of Constraints (TOC) also presents a powerful methodology for identifying and addressing the most crucial limiting factor, known as the constraint, that gets in the way of goal achievement, whatever our goals may be.
The approach takes a scientific stance towards improvement, suggesting that within complex systems, such as organizational processes, there exists a chain of interconnected activities, with one activity serving as the constraint that limits the entire system - essentially, the"weakest link in the chain."
The Theory of Constraints Process
Looking to leverage the Theory of Constraints to understand and eliminate the weakest link, we can employ a 5-step process to help us.
- Identify the system's constraint.
Whether physical or a policy, we start by mapping out our process and understanding how value flows from step to step to find the weak link. We might start by identifying all of the constraints, but by overlaying some analysis, we can fairly rapidly distill it down to the one bottleneck or constraint that defines the effectiveness of your system.
- Exploit the constraint.
Our identified constraint has a maximum limit, the idea here is to squeeze the maximum out of it so that it is operating at its limit. Rather than adding any resources to anything else, we want to learn to use the resources that we have more efficiently. Most organizations have constraints that are not well utilized, and some may have reasons for under-utilization that are not immediately clear. If this is your case, you might perform a deeper root cause analysis to understand the constraint, look at its inputs and outputs, how the work is done and by whom. Once you understand the root cause impacting your ability to fully utilize your constraint, you will want to eliminate it.
- Subordinate the constraint.
This is the step that gets everyone involved. Instead of allocating the unconstrained resources to do more, or rather than looking at the people working on the constraint and encouraging them to work faster or smarter, we get to help out and support the work of the constraint. What can we take off of their hands? How can we take non-essential work off the team's hands so that they are focused only on the work that is constrained?
- Elevate the constraint.
Once you have done all three predecessors, then you can at last, invest in the constraint. Add resources, people, or tools to expand capacity, upgrade systems or increase automation. The pizza pop-up blog provides a great example! In this example, fixing the constraint requires buying a second pizza oven (provided there is space for another pizza oven.)
- Repeat.
Rinse and repeat. Now that one constraint has been addressed, go look for the next one. This is at the heart of continuous improvement!
Applying the Theory of Constraints
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