Theory of Constraints aka “TOC” is a system-level methodology that helps companies steer their process improvement objectives away from cost reduction and towards a focus on increased Throughput.
Other Definitions
Theory of Constraints (“TOC”) – Theory of constraints (TOC) is a body of knowledge on the effective management of (mainly business)organizations, as systems.TOC consists of (1) some basic concepts and principles, (2) the five thinking processes, and (3) their applications to various domains, such as:
• managing manufacturing operations (synchronous manufacturing),
• project management (critical chain),
• accounting and performance measurement (throughput accounting).(Wikipedia, the free encyclopedia)
Theory of Constraints (“TOC”) – A four- step management philosophy developed by Dr. Eli Goldratt that involves:
- Identifying the system ‘s constraints
- Working to exploit those constraints (either through strengthening the constraint or getting maximum performance out of the key constraint )
- Subordinating everything else to the above decision (given the key constraint, all operation al decision s involve improving the processes as much as possible relative to this controlling constraint, e.g. a bottleneck in a production process).
- Working to elevate the constraint (improve or eliminate the bottleneck and then reexamine the system ).
Once the critical constraint is eliminated, a new constraint will arise to take its place. So the process continues until the smallest level constraint is identified that can impact on the whole system. In project management, the key constraint (using TOC ideas) is the critical path of the project since it determines the length of the project and hence is the key constraint. TOC is used in the critical chain approach as an alternative to CPM or PERT for determining the length of a project by using critical resource control and application .(Wideman Comparative Glossary of Common Project Management Terms v2.1 )
