## The Idea in Brief The **Theory of Constraints (TOC)** is a management philosophy developed by Israeli physicist **Eliyahu M. Goldratt** in the 1980s. It holds that every complex system has at least one limiting factor (a constraint) that determines the system’s overall performance. By identifying and systematically addressing this constraint, organisations can achieve significant improvements in output, efficiency, and profitability. Rather than trying to optimise every part of a system, TOC emphasises focusing resources where they will have the most impact. --- ## Key Concepts ### 1. Constraints - A **constraint** is the weakest part of a process that prevents the system from achieving higher performance. - Constraints can be **physical** (e.g., machine capacity, workforce skills, materials) or **policy-related** (e.g., rules, practices, or cultural assumptions that limit output). ### 2. The Five Focusing Steps Goldratt proposed a structured approach for managing constraints: 1. **Identify the Constraint** – Find the bottleneck that limits system performance. 2. **Exploit the Constraint** – Maximise its utilisation without major investment (e.g., remove downtime, prioritise its workload). 3. **Subordinate Everything Else** – Align all other processes to support the constraint. 4. **Elevate the Constraint** – Increase capacity through investment or innovation if needed. 5. **Return to Step 1** – Once a constraint is resolved, a new one will emerge; continuous improvement is essential. --- ## Implications - Shifts focus from **local optimisation** (improving parts of a process) to **system-wide optimisation**. - Encourages leaders to identify what truly limits performance rather than spreading effort too widely. - Proven to deliver large gains in productivity, profitability, and speed when applied correctly. --- ## Sources - [[The Haystack Syndrome]] — Goldratt's own application of TOC to information management; data vs information as constraint - [[The Choice]] — Goldratt on TOC as a thinking process, not just a manufacturing technique - [[The Fifth Discipline]] — Systems thinking complements TOC; constraints are leverage points in the system - [[The Logical Thinking Process]] — Dettmer's systematic method for applying TOC to problem-solving through five logic trees --- ## See in Field Notes - [Hidden Bottleneck](https://www.anishpatel.co/hidden-bottleneck/) — The constraint isn't execution speed, it's decision speed. Externalise the logic. - [Capacity and Flow](https://www.anishpatel.co/capacity-and-flow/) — Flow as system property: WIP discipline, finishing bias, and variety reduction