Another New Book Part 6

In this series of posts, again taken from my newest book, Theory of Constraints, Lean, and Six Sigma Improvement Methodology - Making the Case for Integration, I will be discussing how I present the basics of TOC to those readers who may not be familiar with it.

In the 1980s, Dr. Eliyahu M. Goldratt and Jeff Cox introduced us to their Theory of Constraints (TOC) improvement methodology through their highly successful and widely read business novel, The Goal [1]. Goldratt and Cox explained to us that systems are comprised of interdependent processes and functions which they equated to a chain. They explained that every chain has a weakest link, and in order to strengthen the total chain, you must first identify this weakest link and then focus your improvements on it until it is “broken.” And when it does break, a new constraint will appear immediately. They further explained that any attempts to strengthen the other links in the chain will not result in a stronger chain because it will still break at the weakest link.

Goldratt and Cox analogized the concept of a chain to organizations and explained that failing to identify and strengthen the organization’s weakest link, or system constraint, will not strengthen the global system. Similarly, attempts to improve non-constraint operations will not necessarily translate into significant organizational improvement resulting in profitability improvement. It’s kind of like a professional baseball team signing free agent sluggers when the real constraint is relief or starting pitching. They can score lots of runs, but in the end, if they can’t hold the other team to fewer runs than they score, they’ll never win a pennant.

According to Dettmer [2] and Goldratt and Cox [1], the Theory of Constraints is based upon the fact that there is a common cause for many effects we observe at the systemic or organizational level. TOC envisions a company as a system, or a set of interdependent relationships, with each relationship being dependent on others in some way. The global system performance is dependent upon the combined efforts of all of the relationships within the organization. In addition, there are disruptions and statistical fluctuations (i.e. variability) that interfere with the production and delivery of products to the next process step that ultimately impact delivery to the customer. It’s important to understand that every for-profit organization has the same two goals, to make money now and to make money in the future. Therefore, every action or decision taken by an organization should be judged by its impact on “the organization’s goals.” This, of course, implies that before we can do this, we must first define the goal and, second, determine how we are going to measure or judge our decisions and actions.

In my next post I will lay out how I present the concept of what a constraint is and why it's so important to identify it.

Bob Sproull