Question

6 What is a constraint? Explain the Theory of Constraints.

Answer 1

A constraint in the context of the Theory of Constraints (TOC) means anything that prevents an organization or the system achieving its target. These can be internal or external to the system. An internal constraint is in evidence when the demand in the market exceeds what a system can deliver; and conversely an external constraint occurs when the system can produce more than the market will bear.

The Theory of Constraints is a management paradigm that identifies the major limiting constraints in the achievement of goals and afterwards systematically improving that constraint until it is no longer the limiting factor for fulfilling the goal. The best way for a system to achieve its goals is to reduce inventory, decrease operating expenses, and increase throughput. The theory of constraints consists of three core principles, six steps for implementation, and a five step thinking process.

The three core principles are

-- convergence,

-- consistency, and

-- respect

The six steps of implementation include:

Step-1: Identification of a measurable goal

Step-2: Identification of the bottleneck/ constraint

Step-3: Exploit the bottleneck/ constraint

Step-4: Subordinate operations to the constraint

Step-5: Increasing the capacity of the bottleneck/ constraint

Step-6: Repeat with a new constraint

The five step thinking processes are:

-- The people in the system should agree on the issue

-- The people in the system should agree on what sort of solution is required

-- Convincing everyone to agree that the solution will resolve the issue

-- Finding past potential negative ramifications of the process

-- To overcome any obstacles to the implementation