Theory of Constraints

Theory of Constraints

Theory of Constraints
Liberty University
International Business
BUSI 604


Theory of Constraints
The Theory of Constraints (TOC) is a theory that suggests that "the greater gain will come from identifying which part of the process is a constraint to the whole rather than focusing on increased output from an entire process" (Satterlee, 2009, p. 237). TOC is most often used in manufacturing companies that are having issues with bottlenecks or areas of decreased production. However, TOC can also be used in other areas such as project management and sizeable construction projects.
Article Summary
In the article, “Critical Chain: The Theory of Constraints Applied to Project Management,” Rand discusses the five steps of the Theory of Constraints. The five steps are:
1. Identify the system’s constraint.
2. Decide how to exploit the system’s constraint
3. Subordinate everything else to the above decision.
4. Elevate the system’s constraint.
5. If, in the previous steps, a constraint has been broken, go back to the first step and start over again.
Essentially these steps are predicated upon the fact that one function slows down the other functions of a process. In theory, all other functions can be scheduled around the bottlenecked function so that loss of time and labor can be minimized. According to this article, once all functions are in tune, the system’s constraint will often clear itself. The application of TOC from a project management viewpoint can be explained as a critical chain process.
In the process of project planning each step of a project has a start date and an estimated end date. Often, these dates contain buffers to ensure there are no project overruns. With each critical step of a project carrying its own safety buffer, project schedules tend to be lengthy beyond reason. The layman would consider this to be a good thing as with the added time for each job the project must undoubtedly be completed on time and ahead of...

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