To exploit the limiting factors of the organization to generate value
The Theory of Constraints, a result of the ingenuity and practical applications experimented with in many companies all over the world by the Israeli physicist Eli Goldratt, is a real business philosophy that has its main objective in the identification of the limiting factor for the organization, the constraint.
Each organization can be considered as a chain whose links are the processes that interact to achieve the ultimate goal.
If we pull a chain again and again, it will sooner or later break.
At its weakest link. Using the analogy of the chain then, we can see how the weakest link represents the constraint that determines its global strength.
More specifically, the constraint (bottleneck) is the element that determines the rate at which the company produces value in a unit of time.
The innovation in Goldratt’s thinking compared to other management theories, lies in having shown that trying to remove the constraint means we must patiently suffer it, while we strategically decide where it should be placed and manage it to the best of our ability. This is a winning action both from the point of view of profit and control of the system.
To apply a process of continuous improvement in the company: Is it possible?
Yes! By following the steps suggested by Goldratt in his book, The Goal, for optimal constraint management:
- Identify the constraint
- Exploit the constraint as much as possible
- Subordinate the system to the constraint
- Check, starting from the first step once again
To give you a clear idea of the results achievable with the application of the TOC we invite you to see this video made by Project Group Srl (Project Group, Ltd.), specialized in the application of the Theory of Constraints.