Theory of Constraints (TOC)

This is a system improvement tool, which states that every system has one goal and it is achieved by many linked processes and out of those processes, one process acts like a bottleneck. So, this theory is utilized in order to remove that bottleneck and ultimately achieve higher productivity. Commonly these bottle necks can be easily understood by the example of assembling operation. There are 5 stations; each station has different times for assembling e.g 40 minutes, 50 and 60 minutes. Out of these stations, station with maximum operation time will be considered as bottleneck station, because at this station, a queue will be generated and ultimately it will affect productivity of system.

Concept of Theory of Constraint was given by Eliyahu Moshe Goldratt. Basically he was a physicist and work on production system design.

There are many benefits of TOC application, like

Enhanced ability to update system and processes and ultimately winning more profit margins and business.
Less amount of System problems
Reduced lead times for production at shop floor
Reduced lead time for service organizations, like hospitals
Less inventory, especially work in process inventory
On time delivery of product or service
Motivated and committed employees for problem solving
Enhanced competiveness
Reduced production related variable costs
Helps in process understanding
Improved communication level between different directorates

To apply TOC in any organization requires following steps:

Identification of the constraint
Make a strategy to exploit the constraint
Next make a strategy that how to subordinate the constraint
In the next step, elevate the constraint performance
Move back to step one to solve other bottlenecks

This five steps strategy is used as generic solution for problems in assembly lines, design & development, manufacturing, decision making, supply chain management, health care etc.

In assembly lines, parts are coming on a conveyer and on each station; they take some time for assembly. The station with maximum working time is considered as bottleneck station and using TOC, problem can be solved by applying different solutions.

In design & development phase, products are designed using different tools. When they are tested, they show different problems. This tool helps to identify the problematic areas and sequentially provides the solution.

In manufacturing, products are manufactured using different technologies and some time one workstation or technology creates problems. To solve manufacturing related problems this tool is much useful.

In healthcare, patients are treated at different places. During treatment patients has to pass through different rooms, like emergency room, medical checkup room, pathology test room, Operation Theater and even reception. So, in these all areas, one station takes more time and hence ultimately patients have to wait more. If that customer care area is streamlined using TOC, the whole system will improve its efficiency and productivity.

Theory of Constraint is a good tool and it should be applied in respective disciplines in systematic manner. Once good results are obtained, then different bottleneck stations must be identified. One important thing is that this tool must be applied there as continuous process.

By Oskar Olofsson