Theory of Constraints

Theory of Constraints is the invention of Dr Eliyahu Goldratt, an Israeli physicist, educator, and management specialist.

It’s a business philosophy which seeks to strive towards the global objective, or goal, of a system through an understanding of the underlying cause and effect dependency and variation of the system in question.

It is equally applicable to for-profit and not-for-profit organizations for strategy, personnel, marketing, sales, distribution, manufacturing, design, and project management.

Just-in-time, statistical process control, and Theory of Constraints are all system approaches.  Goldratt characterizes a system approach as a warning against “concentrating on a local optima (in place or time) and, by that, jeopardizing the performance of the system as a whole.”

Each of these methods while acknowledging the overall system also acknowledges that within the system there is dependency and variation.  It is acknowledgement of variation that sets these particular approaches far apart from many other business approaches. 
Almost by default, because we have defined a system with boundaries of some sort, we have also defined that there must be finite capacity within that system.  Usually defined by the slowest step in the process in just-in-time and Theory of Constraints.

What if there was a simple way to verbalize and capture the cause and effect which we never directly experience, but which we none-the-less have the intuition for?    Senge proposed computer-based “microworlds,” but what if we could do it on the back of an envelope – pen and paper?  There is a mechanism that allows us to verbalize, construct, analyze, and communicate these cause and effect relationships, and moreover, to propose workable solutions to the problems that they cause.  This is known as the Thinking Process.

Theory of Constraints seeks elegant solutions to problems, rather than sophisticated ones.  Elegant solutions are more likely to have broken some deeper core or underlying problem; sophisticated solutions are likely to have addressed a limited number of higher order problems (symptoms) while leaving the underlying core problem unresolved.

Theory of Constraints is a work-in-progress.  It continues to evolve into new areas as people discover its broader applicability and it also continues to improve in delivery in established areas as people refine their approaches.