Parsing work into smaller pieces or projects is not only natural, but it makes work easier to manage and execute as well. This is why project management is so important, and why it's necessary to employ all the tools in your toolbox to effectively manage projects.
The Theory of Constraints (TOC) is one such tool that can make project management even more efficient. Though it’s mostly used in manufacturing, the Theory of Constraints can effectively be applied to almost any project.
What Is the Theory of Constraints?
The Theory of Constraints is a series of techniques for sound decision-making during project management and coordination. The theory states that a low number of constraints can hinder any management system from successfully meeting its goals.
In other words, there’s always at least one constraint to deal with at any given time, and the Theory of Constraints addresses it so that it can be mitigated or (if possible) eliminated completely.
Using what’s called a focusing process, the Theory of Constraints seeks to identify the constraint and then restructure it so it can be addressed and eventually solved. Of course, once a constraint has been eliminated, it’s common for another to rise in its place, making this an ongoing process of fortifying and strengthening the system.
Overview of the Theory of Constraints
The Theory of Constraints was first introduced and formalized in the book The Goal, by Dr. Eliyahu Goldratt, in the early 1980s. Following this work, Goldratt published other books (such as Critical Chain in 1997) and hosted seminars and workshops on the theory.
Today, one can find numerous papers, peer reviews, discussions, and books around the theory, its applications, and its core principles.
Theory of Constraints Core Principles
Within the TOC are three main principles: convergence, consistency, and respect.
- Convergence: This principle suggests that a complex system is actually simpler to manage because tweaking, adjusting, or correcting just one aspect will impact and change the whole system for the better.
- Consistency: This principle suggests that any internal issue or constraint must be the result of at least one flawed assumption in the system.
- Respect: This principle suggests that people are inherently good and deserve respect even when mistakes are made. This adds some needed leeway and flexibility in project management because when humans are a factor, so is error.
5 Focusing Steps of Theory of Constraints
Also known as POOGI (Process of On-Going Improvement), the five focusing steps of the TOC act as guideposts to push improvement throughout a project and beyond.
The five focusing steps are as follows:
1. Identify the Constraint in the System
Rather than trying to strengthen the whole system, look instead for the weak point and focus on that. When looking to improve something in an organization, it usually fails unless you look for and manage the constraint first. By strengthening the weakest link, you strengthen the whole system, which means more profits for shareholders and satisfaction for both customers and employees.
2. Exploit the Constraint
In this step, we must get as much out of the identified constraint as possible. This means maximizing the use and productivity of the constraint or learning all you can from this particular constraint to improve it. Instead of adding more of the constraint (i.e., buying more machines, hiring people, or increasing advertisements), fix the initial problem before moving forward. Take everything the constraint can teach you so you can learn for next time.
3. Subordinate and Synchronize Everything to the Constraint
For best results, avoid producing more than your constraint can handle. This is especially poignant in a manufacturing environment (checking production to comply with capacity). You have to ensure that the rest of the system is always able to support the work of the constraint, meaning you must have top quality workers, materials, and more to help bolster the productivity of the constraint for optimal performance.
4. Elevate the Performance of the Constraint
As soon as the capacity of the system has been exhausted, it has to be expanded. This can be done through investing in more resources such as equipment, workers, materials, and more to elevate the constraint and bring it up to its fullest potential.
5. Prevent Inertia from Becoming a New Constraint/Repeat
Once the constraint has been elevated, you may see that the weakest link in the chain or rung of the ladder is no longer the weakest. Continue to elevate other resources around the old constraint to help keep it thriving. This makes the process and system more stable and better equips you to deal with a new constraint that may require all new resources, management, and more.
Theory of Constraints in Lean
Since the TOC and Lean manufacturing are similar methodologies, they can be combined to focus in on and directly improve the constraint. Theory of Constraints is more focused than lean manufacturing and lean management, though, and where the theory is focused on constraints, Lean is more focused on customer needs, eliminating waste, and reducing costs.
To combine the methodologies, Theory of Constraints can be used as a mechanism for prioritizing techniques and decisions. Lean manufacturing, then, offers a toolbox of improvement techniques to apply.
In the end, manufacturing effectiveness will increase due to waste being eliminated from parts of the system that contain the largest constraints on both opportunity and profit. What’s more, Lean manufacturing tools and techniques can also be applied to equipment that’s subordinated to the constraint.
Applications of the Theory of Constraints
The Theory of Constraints lends itself well for manufacturing and supply chain, but it can be applied to any area of business in conjunction with lean management. No matter what kind of work you do, constraints will come up and this theory will find an effective solution.
You may apply the Theory of Constraints in your recruitment process, presentation development, conference planning, and more to make them more effective. In short, applications of the TOC can happen anywhere you’re having issues in your business. It will also get rid of business stress and inefficiencies that hinder optimal success.
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Get Trained to Use the Theory of Constraints
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