Theory of Constraints (TOC) is an overall management philosophy that is geared to help organizations continually achieve their goals.
Theory of Constraints is based on the premise that the rate of goal achievement is limited by at least one constraining process. Only by increasing throughput (flow) at the bottleneck process can overall throughput be increased. The five focusing steps aim to ensure ongoing improvement efforts are centered around the organization's constraints.
Assuming the goal of the organization has been articulated (e.g., "Make money now and in the future") the steps are:
1. Identify the constraint (the resource/policy that prevents the organization from obtaining more of the goal)
2. Decide how to exploit the constraint (make sure the constraint's time is not wasted doing things that it should not do)
3. Subordinate all other processes to above decision (align the whole system/organization to support the decision made above)
4. Elevate the constraint (if required/possible, permanently increase capacity of the constraint; "buy more")
5. If, as a result of these steps, the constraint has moved, return to Step 1. Don't let inertia become the constraint.
Wednesday, April 15, 2009
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