Theory of Constraints (TOC®) – Glossary

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CONSTRAINT - Basics of the Theory of Constraints
The core concept – of the Theory of Constraints is that every process has a single constraint and that total process throughput can only be improved when the constraint is improved. A very important corollary to this is that spending time optimizing non-constraints will not provide significant benefits; only improvements to the constraint will further the goal (achieving more profit).

Thus, TOC seeks to provide precise and sustained focus on improving the current constraint until it no longer limits throughput, at which point the focus moves to the next constraint. The underlying power of TOC flows from its ability to generate a tremendously strong focus towards a single goal (profit) and to removing the principal impediment (the constraint) to achieving more of that goal. In fact, Goldratt considers focus to be the essence of TOC.

The Five Focusing Steps – The Theory of Constraints provides a specific methodology for identifying and eliminating constraints, referred to as the Five Focusing Steps. As shown in the following diagram, it is a cyclical process.

The Theory of Constraints uses a process known as the Five Focusing Steps to identify and eliminate constraints (i.e. bottlenecks).

The Five Focusing Steps are further described in the following table.

Step Objective
1. Identify Identify the current constraint (the single part of the process that limits the rate at which the goal is achieved).
2. Exploit Make quick improvements to the throughput of the constraint using existing resources (i.e. make the most of what you have).
3. Subordinate Review all other activities in the process to ensure that they are aligned with and truly support the needs of the constraint.
4. Elevate If the constraint still exists (i.e. it has not moved), consider what further actions can be taken to eliminate it from being the constraint. Normally, actions are continued at this step until the constraint has been “broken” (until it has moved somewhere else). In some cases, capital investment may be required.
5. Repeat The Five Focusing Steps are a continuous improvement cycle. Therefore, once a constraint is resolved the next constraint should immediately be addressed. This step is a reminder to never become complacent – aggressively improve the current constraint…and then immediately move on to the next constraint.

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THE THINKING PROCESSES
The Theory of Constraints includes a sophisticated problem solving methodology called the Thinking Processes. The Thinking Processes are optimized for complex systems with many interdependencies (e.g. manufacturing lines). They are designed as scientific “cause and effect” tools, which strive to first identify the root causes of undesirable effects (referred to as UDEs), and then remove the UDEs without creating new ones.

The Thinking Processes are used to answer the following three questions, which are essential to TOC:

  • What needs to be changed?
  • What should it be changed to?
  • What actions will cause the change?

Examples of tools that have been formalized as part of the Thinking Processes include:

Tool Role Description
1. Current Reality Tree Documents the current state. Diagram that shows the current state, which is unsatisfactory and needs improvement. When creating the diagram, UDEs (symptoms of the problem) are identified and traced back to their root cause (the underlying problem).
2. Evaporating Cloud Tree Evaluates potential improvements. Diagram that helps to identify specific changes (called injections) that eliminate UDEs. It is particularly useful for resolving conflicts between different approaches to solving a problem. It is used as part of the process for progressing from the Current Reality Tree to the Future Reality Tree.
3. Future Reality Tree Documents the future state. Diagram that shows the future state, which reflects the results of injecting changes into the system that are designed to eliminate UDEs.
4. Strategy and Tactics Tree Provides an action plan for improvement. Diagram that shows an implementation plan for achieving the future state. Creates a logical structure that organizes knowledge and derives tactics from strategy. Note: this tool is intended to replace the formerly used Prerequisite Tree in the Thinking Processes.