Theory of Constraints: Definition & Examples

Instructor: Martin Gibbs

Martin has 16 years experience in Human Resources Information Systems and has a PhD in Information Technology Management. He is an adjunct professor of computer science and computer programming.

Improving output and productivity is a goal of manufacturing. This lesson will discuss the theory of constraints, a methodology used to improve production and profit. Examples will be discussed.

Theory of Constraints

If you hear the term Theory of Constraints, you may imagine that we're going to dive into some heavy concepts and complex terms. Far from it. The Theory of Constraints, or TOC, is really a methodology used for process/quality improvement. Its main goal is to remove barriers, or constraints, which we also like to call bottlenecks.

Think of a bottle of water you find on a lakeshore. As you try to pour out the water, nothing comes out. It turns out there's a pebble blocking the bottle. You remove the pebble and try again. Then you find a clump of leaves. You repeat the process until the water is flowing again.

In a real production environment, it's not always that simple, but the basic processes are the same. You need to find a single bottleneck and work until it is removed (the rock), then move to the next (the leaves). This careful, step-by-step approach ensures that we improve throughput (in this case, the flow of the water), and eventually our profit.

Let's take a look at a specific method for identifying and and fixing constraints.

The Five Focusing Steps

Production improvements are rarely one-time fixes. We need to continuously remove bottlenecks and improve production. One approach is called the Five Focusing Steps. Even though we call them steps, it's really a cycle to identify and improve upon constraints within production processes.

The Five Focusing Steps of the Theory of Constraints
TOC Five Focusing Steps

  1. Identify the bottleneck. Is it a pebble or a boulder?
  2. Exploit the bottleneck. This means that we make quick changes (e.g., remove the rock from the water bottle).
  3. Subordinate. We'll see this with a later example, but at this step you shift other people/resources around to support removing the bottleneck.
  4. Elevate. If you are still stuck, figure out what else can be done. You might need to get a vacuum and suck out the leaves from the bottle!
  5. Repeat! This is a continuous process; true quality/production improvement is never done.

Examples: What are Constraints?

In our example, the rock in the water bottle is technically a bottleneck/constraint. But what about real-life constraints? What are the items that cause issues in production environments? Some of them are listed in the table below.

Bottleneck Example
Physical Drill press, employee resources, space crunch
Policy Regulations, contracts, procedures
Paradigm 'We always let the presses run for 10 minutes after every 500th mold.' (A mindset/culture that can be tough to break)
Market Sales are slow, and the production line keeps putting out more goods

TOC in Action

Let's look at a real-world example. A manager has discovered a bottleneck in the process of building molds; she sets down her water and begins the investigation, using the Five Focusing Steps as a guide.

Step 1: Where Is the Constraint?

In this case, the machines are humming and producing. The bottleneck is actually a detailed procedure that all technicians follow at a certain step in the process; the problem is that it contains extra steps that result in delay of production. This is a policy constraint.

Step 2: Exploit the Constraint

The idea here is to try to increase the output from the constraint using what's already available. Idle time in the bottleneck reduces overall output, so what can we do? We need to remove non-value added work, limit interruptions, provide great tools and materials, or prioritize work.

We can't make people read faster, and completely eliminating the manual is probably out of the question. Could we shift workers around so that the work doesn't slow down at this point in the process?

In our case, we noticed that there was a natural downtime for a specific team member during this step, which didn't impact throughput. This employee was tasked with reading the steps aloud to the other employee.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support