Theory of Constraints

The Theory of Constraints (TOC) is a management philosophy developed by Eliyahu Goldratt that focuses on identifying and managing the constraints that limit a system's ability to achieve its goals. In other words, it's a way of thinking about how to make a process or organization more efficient and effective.

At the core of TOC is the idea that every system, whether it's a business, a factory, or a team, has a "bottleneck" or a "constraint" that limits its ability to achieve its goals. In a manufacturing setting, for example, the constraint might be a machine that can't keep up with demand, while in a sales team it might be a lack of qualified leads.

TOC suggests that in order to improve the performance of a system, you need to identify and address the constraint. This could involve investing in new equipment, hiring more staff, or changing the way the process is organized. Once the constraint is addressed, it's important to continually monitor the system and look for new constraints that may arise.

One of the key principles of TOC is that improving the performance of a non-constraint does not improve the overall performance of the system. For example, if a factory has one machine that is the constraint, buying another machine will not help the factory increase production unless that first machine is running at maximum capacity.

In summary TOC is a systematic approach to identify the limiting factor in any system and optimize it to achieve the goal of the system.