U.S. flag

An official website of the United States government

The .gov means it’s official. Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

The site is secure. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

  • Publications
  • Account settings
  • Advanced Search
  • Journal List
  • Health Syst (Basingstoke)
  • v.11(1); 2022

Outcomes of managing healthcare services using the Theory of Constraints: A systematic review

Gustavo m. bacelar-silva.

a Department of Community Medicine, Information and Health Decision Sciences, Faculty of Medicine (MEDCIDS-FMUP), University of Porto, Porto, Portugal

b Center for Health Technology and Services Research (CINTESIS), Porto, Portugal

c Department of Distance Learning, Bahiana School of Medicine and Public Health, Salvador, Brazil

James F. Cox, III

d Management Department, Terry College of Business, University of Georgia, Athens, GA, USA

Pedro Pereira Rodrigues

Associated data.

Despite ever-increasing resources devoted to healthcare, lack of capacity and timeliness are still chronic problems worldwide. This systematic review aims to present an overview of the Theory of Constraints (TOC) implementations in healthcare services and their outcomes. We analysed 42 TOC implementations (15 full-text articles, 12 video proceedings, and 2 theses/disserations) from major scientific electronic databases and TOC International Certification Organization Conferences. All implementations reported positive outcomes, both tangible and intangible. The two main improvements reported by authors were in productivity (98%; n = 41) – more patients treated – and in the timeliness of care (83%; n = 35). Furthermore, the selected studies reported dramatic improvements: 50% mean reductions in patient waiting time; 38% reduction in patient length of stay; 43% mean increase in operating room productivity and 34% mean increase in throughput. TOC implementations attained positive results in all levels of the health and social care chain. Most TOC recommendations and changes showed almost immediate results and required little or no additional cost to implement. Evidence supports TOC as a promising solution for the chronic healthcare problem, improving quality and timeliness, both necessary conditions for providing effective healthcare.

1. Introduction

Healthcare has evolved dramatically in the last century but managing it has become a conundrum. The 20th century was the stage of extremely relevant discoveries in medicine that affected health conditions all over the world, e.g., penicillin, the pacemaker. After those discoveries, we are living longer, and the population is growing. However, these improvements led to a higher and rising demand for healthcare services.

Medicine continues to evolve at an impressive rate, and so is its increasing costs. Healthcare consumes an average of 10% of a country’s gross domestic product (GDP), and its costs are rising faster than economies are growing (Halim, 2019 ); in the USA this reached 18% of GDP in 2017 (Sisko et al., 2019 ). Despite this unprecedented investment in healthcare, lack of capacity and timeliness are still problems affecting every country, even the wealthier (World Health Organization, 2010 , 2019 ). Long wait lists for appointments (Ryu & Lee, 2017 ), emergency departments crowding (Morley et al., 2018 ), shortages of hospital beds (Song & Ferris, 2018 ), and cancellations of elective surgeries (Al Talalwah & McIltrot, 2019 ) are some examples of chronic problems. The delay of care is a significant issue, a persistent and undesirable characteristic of current healthcare systems (Murray & Berwick, 2003 ; Ryu & Lee, 2017 ). When patients must wait for medical assistance, serious consequences happen (Corley, 2016 ; Ryu & Lee, 2017 ). Long waits before care delivery have emotional consequences (e.g., anxiety, despair) and contribute to worsening clinical conditions, developing avoidable complications, and even death. There are also financial consequences, treating patients in more advanced conditions requires more specialised care resources, which are more costly.

Healthcare services are under pressure to deliver better healthcare outcomes to an increasing population, with higher quality care, in less time, and at a stable (or lower) cost. However, current management methods are not providing an effective solution to this chronic problem. Traditional solutions to address this problem often require investment to add more capacity to the system, but without a proper analysis to improve throughput using existing resources, it has the potential to make the situation even worse (Han et al., 2007 ).

Over the last century, some disruptive management philosophies emerged and had considerably improved quality and reduced lead times of manufacturing and services. As a natural consequence, researchers considered the adoption of these management philosophies in the healthcare environment to improve care delivery (Kim et al., 2006 ; Young et al., 2004 ). Potential solutions – like Lean and Six Sigma – provide limited benefits, and they both encounter the same problems: involve high investments and long implementation time (Chiarini & Bracci, 2013 ; D’Andreamatteo et al., 2015 ; Poksinska et al., 2017 ).

The Theory of Constraints (TOC) is also one of those disruptive management philosophies that emerged late in the last century. Originally developed by Dr Goldratt to solve manufacturing issues, TOC today is considered a holistic management philosophy that views every organisation as a system composed of many interacting resources. These interdependent resources work together towards achieving the system goal; however, at least one resource limits the capacity of the whole system; otherwise, its throughput would be infinite. This limiting resource is the constraint, and it is the most important resource of any organisation since it determines the performance of the whole system (Goldratt & Cox, 2004 ; Goldratt, 1999 ).

Acknowledging the existence of a constraint creates a whole new management paradigm. Instead of considering any new improvement idea anywhere as an improvement for the organisation, improvement efforts should focus on the constraint. If an organisation was able to identify and increase throughput at its constraint, more effectively exploit the constraint, or better subordinate other resources to the constraint, then the organisation would achieve more of its goal. For instance, if the organisation loses a minute at the constraint, this is a minute lost for the whole organisation; but if any other resource loses a minute, it will not dramatically affect the organisation because it has protective capacity to recover the flow (Goldratt & Cox, 2004 ). Furthermore, to assure overall performance, the organisation must plan and synchronise its productive flow according to the constraint and protect it from uncertainty. Since most healthcare academics and practitioners are unfamiliar with TOC, a brief overview is provided here with a more detailed description provided in the appendix for those interested.

1.1. TOC overview

In contrast to both the traditional management philosophy’s and lean (reduce waste) philosophy’s emphasis on cost reduction everywhere, TOC focuses on achieving the organisation goal (e.g., providing excellent and timely healthcare effectively). Its primary focus is on increasing throughput (the number of properly treated patients), although maintaining or reducing operating expenses are very common consequences. TOC also strives for a systems perspective of the environment examining all stakeholders’ perspectives in searching for a win-win solution to satisfy the different stakeholders (the objective is to meet the stakeholders' necessary conditions without compromising the goal achievement). The organisation goal is achieved by implementing three processes of ongoing improvement (POOGI) to align, schedule and execute the organisation’s processes to achieve its goal: 1. five focusing steps (5FS) (Cox et al., 2012 ; Goldratt & Cox, 2004 ); 2. buffer management (BM) (Cox et al., 2012 ; Goldratt, 1986 ); and 3. change question sequence (CQS) (Cox et al., 2012 ; Goldratt, 1994 ).

First, we define the organisation’s goal and supporting measures. Next, we apply the 5 focusing steps (5FS) (Goldratt & Cox, 2004 ), which starts by step 1: identifying the constraint; then step 2: deciding how to exploit the constraint – how to make maximum use of its available capacity. Since all other resources have more capacity, the constraint governs both the throughput and inventory in the system, (therefore the need for step 3, which means that all non-constraint resources must work accordingly to support the previous decisions. If the constraint remains, now it is time to invest money, (step 4: elevating the constraint and eliminating it. However, this is a process of ongoing improvement (POOGI), thus step 5: we must not allow inertia to become the system’s constraint, we must go back to step 1 and start again.

Remember that TOC has two other POOGI’s. Buffer management (BM) is a mechanism used in both the planning and execution phases of TOC applications that controls the constraint’s protection against uncertainty based on the amount of time or stock (in healthcare, e.g., patients or beds) remaining until it is idle. A simple colour-coding system similar to a traffic light’s colours is used to determine when to take action. Green means everything is running smoothly, do what you are doing; yellow means an imminent threat to patient flow or constraint utilisation is approaching, plan accordingly to eliminate the threat; and red means enact the plan. This proactive control system eliminates most disruptions to the constraint and to patient flow.

The change question sequence (CQS) is comprised of five-interrelated questions that are answered with a set of logic diagrams (Cox et al., 2012 ; Goldratt, 1986 , 1994 ). This POOGI provides a gap analysis of system characteristics (question 1: why change?), a logical analysis starting with the current system problems (called undesirable effects, UDEs in TOC terminology) and ending with the identification of the system’s underlying core problem(s) and its assumptions (question 2: What to change?). Based on the causal network constructed in answering the preceding question, the search for and development of a holistic win-win solution to the system’s core problem(s) and related problems is in response to question 3 (what to change to?). Answering question 4 (how to cause the change?) results in the construction of an effective implementation plan. In answering question 5 (how to measure and sustain the change?), one establishes procedures for measuring and sustaining system results. The application of the 5FS to a healthcare environment is provided in the supplementary material as are more detailed applications of BM and CQS.

The adoption of TOC in business environments started in manufacturing and has spread to other areas, such as logistics, distribution, project management, and sales and marketing (Ronen, 2005 ). In 1998, Mabin and Balderstone ( 2003 ) conducted a literature review to assess the outcomes provided by TOC applications. This study involved 77 different companies across many different purposes (for-profit, not-for-profit, and government), industries, and sizes, including giant multinational corporations (e.g., Boeing and GM), military organisations (e.g., US Air Force), and even a small-town bakery. Their analysis of reported changes presented positive results, though many companies achieved with only partial implementations:

  • Lead-time reduction of 69%;
  • Cycle-times reduction of 66%;
  • Due-date-performance improvement of 60%;
  • Inventory levels reduction of 50%;
  • Revenue increase of 60% (excluding one outlier, a 600% increase at Lucent Technologies achieved within one year).

These significant results support the investigation of TOC as a potentially effective solution for the chronic healthcare problem. However, the application of TOC still has few case studies published in refereed academic journals (Mabin & Mirzaei, 2016 ; Ronen, 2005 ), particularly in healthcare. Since academic papers do not entirely reflect the adoption of TOC in healthcare yet, answers to this subject may be covered in grey literature.

The widely accepted definition of grey literature is known as “that which is produced on all levels of governmental, academics, business and industry in print and electronic formats, but which is not controlled by commercial publishers” (Auger, 1998 ). Examples of grey literature include conference abstracts and proceedings, research reports, dissertations, government documents, personal correspondence, among others. The inclusion of grey literature in systematic reviews is not as common as it should be, because of the cost in time and resources needed to search for it. However, including grey literature is a valuable and recommended practice, since it helps to reduce the publication lag time between a manuscript submission and its publication, and enriches the findings of a study (Paez, 2017 ; Shamseer et al., 2015 ).

A typical path in conducting research is to move from the grey literature to the academic literature. A degree-seeking candidate conducts and defends a thesis or dissertation (reviewed by an examining committee). Then, she submits and presents an updated version of the research as a presentation at a conference (and again receives critiques from reviewers and the audience). Finally, she submits the “improved” research to an academic journal for formal peer review and publication.

Therefore, to minimise the publication bias and provide a more balanced view of the evidence, we decided to include in this systematic review a major source of TOC knowledge: the annual conference video proceedings of the Theory of Constraints International Certification Organization (TOCICO) Conferences (2004–2020). The TOCICO is a global not-for-profit certification organisation for TOC practitioners, consultants, and academics formed to develop and administer certification standards, and facilitate the exchange of the latest developments in the TOC body of knowledge (TOCICO, 2018 ).

Our motivation for this systematic review is two-fold. First, to assess the adoption of TOC as a potentially effective solution for the chronic healthcare problem. Second, to gather existing TOC academic literature, and expand it with TOC experts’ knowledge available in grey literature.

The aim of this systematic review is to present an overview of TOC implementations in healthcare services and their effects. To this end, the proposed study will answer the following four questions:

  • What are the outcomes of applying the TOC in healthcare services?
  • What is the diffusion of TOC in healthcare so far (e.g., primary care or hospital, public or private practice)?
  • Are there common problems – also called undesirable effects (UDEs) in TOC terminology – faced by healthcare services and was TOC able to address all of them?
  • What are the methods and tools commonly used to apply TOC in healthcare services?

The first question aims to give a preliminary answer to whether TOC has improved healthcare services. This question tries to describe the outcomes achieved after implementing TOC in a healthcare service considering a wide range of effects, for instance, the number of surgeries performed, provider utilisation, the waiting time (direct and indirect) of patients for an appointment, the number of patients treated, the length of stay (LOS) in a hospital, the financial results, the quality or timeliness of healthcare, the patient no-show rate, etc.

The second question presents the details of the healthcare services where TOC implementations occurred. This question intends to reveal to what extent TOC has been implemented in healthcare. For that purpose, we described the country of the implementation, level of care (e.g., primary care), nature of service (e.g., for profit, government), its setting (e.g., hospital, clinic), and a brief service description (e.g., operating room, emergency department).

Question three aims to unveil whether healthcare services face common or unique UDEs and core problems and if TOC was able to address them. In cases of successful outcomes, can these case studies help to provide a generic template to guide other healthcare organisations around the globe facing the same problems in their search for a successful path of improvement?

The last question aims to present the methods and tools used to support the implementations. In addition to the three POOGI, TOC has a number of other methods and tools (such as throughput accounting, critical chain project management) used in other organisations to improve performance. To what extent are these tools used in healthcare?

This systematic review followed the guidelines proposed by the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) statement (Shamseer et al., 2015 ), with some exceptions detailed below. We imposed these exceptions to take account of the variety of research approaches and consequent methodologies, as well as different traditions of research (social sciences and health sciences).

2.1. Data sources, eligibility criteria and data extraction

This systematic review used three scientific databases and four grey literature databases. We performed an automated literature search on the scientific (academic) electronic databases – PubMed, Web of Science (WoS) and Scopus – to identify relevant articles published in peer-reviewed journals. We obtained an annotated bibliography (citations and abstracts) of TOCICO Conference video proceedings related to TOC applied in a healthcare environment. Moreover, we performed an automated literature search on a set of theses and dissertations electronic databases – The Networked Digital Library of Theses and Dissertations (NDLTD), Open Access Theses and Dissertations (OATD), and OpenThesis (OT) – to identify relevant studies unpublished in peer-reviewed journals.

TOCICO has its short-, and long-abstracts vetted by TOC experts and slides are reviewed and critiqued as a second stage of the review process. Other sources of TOC implementations are consultant websites, but we chose not to use these sources because they were not vetted. Likewise, we decided to include theses and dissertations because they are previously assessed by an academic committee (generally considered experts in that topic) and may contain knowledge unpublished in scientific journals (due to lead time between submission and publishing, and acceptance issues) (Paez, 2017 ).

This systematic review of TOC in healthcare included all relevant empirical studies, as described by Brandão de Souza ( 2009 ). In each selected study, the authors describe at least one actual implementation of TOC in a healthcare service, which must describe the application of TOC principles and methods to improve patient flow followed by its outcomes (regardless of geographical location, and languages of publication).

We excluded studies that did not meet the following criteria:

  • Do not report at least one implementation of TOC in healthcare.
  • No further details besides an abstract.
  • Papers with no abstract available.
  • Interviews, editorials, letters to the editor, simulations, books, tutorials, other systematic reviews, and theoretical papers. Here we consider theoretical papers those that focus on reflections and explanations on methodologies or specific issues within TOC in healthcare.
  • Studies that report implementations of TOC combined with any other management methodology, such as Lean, Six-Sigma, or Total Quality Management. Exceptions for this are those cases where TOC was the leading methodology and a different methodology was used secondarily (e.g., to describe the process flows using a value stream mapping).
  • Studies primarily focused on support services, such as information technology processes, meal delivery, and financial services in a healthcare environment.

Two researchers searched for relevant papers on electronic databases using a search strategy calibrated in Scopus database, which combines the terms described in Table 1 (searching article title, abstract and keywords).

Search strategy including TOC terms and healthcare terms

We managed details of retrieved references in EndNote and used an online spreadsheet (Google Sheets). The two reviewers independently screened the titles and abstracts to assess which studies met the eligibility criteria.

We extracted data by using a standardised data extraction sheet (Google Sheets) directly from the included studies. Besides general study data (e.g., title, authors, year of publication, country where study was performed, publication source, and number of implementations described in each study), we collected information needed to perform the analysis minimising the risk of bias, and to answer each one of our four research questions.

The bias analysis consisted of 8 items. Each item captures a step of a TOC implementation and contains a statement and a 4-point scale (0-strongly disagree to 3-strongly agree). Whenever we were not able to classify an item given the content of the document, this item was not considered (up to a maximum of 2 unconsidered items allowed). The evaluation items are below (more information is available as supplementary material):

  • Definition of the goal
  • Definition of global performance measures
  • Why change (Gap analysis and UDEs)
  • Identification of the constraint
  • Definition of how to exploit
  • Subordination of everything else to support the constraint
  • Elevation of the constraint
  • Successfully established continuous improvement

In order to answer the four research questions, we performed a narrative synthesis of the case studies outcomes. Relevant data was extracted and presented in a tabular form and these findings were categorised and synthesised in a narrative summary. The narrative synthesis explores both the relationships and findings within and among the included studies.

Based on the methods described in the previous section, we were able to identify 202 potentially relevant records by searching the scientific databases (last search on 2020–07-23), 64 records in the TOCICO database, and 206 theses/dissertations. We removed 94 duplicates and screened the titles and abstracts of 378 records; 19 articles, 18 videos, and 6 theses/dissertations remained. After performing a full-paper assessment and watching all available video proceedings (with respective presentation slides), we excluded 6 articles, 6 videos, and 4 theses/dissertations. We included 2 articles from the reference lists of scientific studies. The final list included 15 articles from the academic literature, 9 video proceedings, and 2 theses/dissertations. Figure 1 illustrates the flow of information through the different stages of this systematic review.

An external file that holds a picture, illustration, etc.
Object name is THSS_A_1813056_F0001_B.jpg

Flow of information through the different stages of this systematic review.

Overall, we analysed 42 implementations (cases). Those 15 full-text articles contributed with describing 22 implementations, while those 12 video proceedings described 24 implementations and 2 theses/dissertations described 4 implementations. Some articles (n = 4), video proceedings (n = 4), and theses/dissertations (n = 1) described more than 1 implementation (e.g., Knight et al. ( 2004 ) described 10 implementations). On the other hand, we could also identify a few implementations described in more than one record (e.g., 1 implementation described by 2 articles and 1 video proceeding, and 3 implementations described by 1 article and 1 video proceeding). Table 2 provides a summary of selected studies and bias analysis. Following a discussion of the bias analysis, the four research questions are answered.

Summary of participating studies. Includes publication source, number of implementations, bias analysis (bias score), health service details (e.g., country, setting), results, and UDEs

a Three implementations described in two different sources. b One implementation described in three different sources. c Described in an article and a thesis. d Described in an article and 2 TOCICO videos proceedings. UNC: Uncertain; N/A: Not available.

3.1. Bias analysis

The evaluation system revealed that 83% of assessed implementations are classified as Excellent, 5% as Adequate, and 12% as Marginal. There was no Inadequate implementation among the full-text articles and video proceedings, none was therefore excluded.

All 12 video proceedings (100%) implementations achieved an Excellent classification, whereas 68% of article implementations achieved this classification. All theses/dissertations had an article (and no video proceeding) describing their respective implementations, and for this purpose, they were described together. Only 1 implementation achieved the highest possible score, an average of 3, and it was a video proceeding (Sierraalta-Arganguren, 2015 ).

3.2. Question 1: outcomes of applying the TOC in healthcare services

Before going deeper into the results of TOC implementations, we must consider the goal of the organisations involved in this study. Half of the articles (n = 8) and 2 video proceedings presented problems with the definition of their organisation’s goal. Most of them did not mention the goal within the text, some did not clearly define the goal, and there was one article that the goal seemed to change along with the paper. However, an analysis of those that defined their goal shows 2 frequent characteristics: timeliness and quality of care.

All implementations reported positive outcomes, but they had different documented results, both tangible and intangible. Most of these outcomes did not require an additional cost and, in those that did it, the additional cost was little and always recovered in the very short-term. The two main positive outcomes reported by authors were in productivity (98%; n = 41), which means more patients treated, and in the timeliness of care (83%; n = 35). Other positive results are related to quality of care (48%; n = 20), financial outcomes (29%; n = 12), and staff satisfaction (29%; n = 12). However, since we did not give a survey to the stakeholders of each implementation, these results may underestimate the impact of TOC. Table 3 contains a summary of groups of positive outcomes reported after implementing TOC.

Summary of groups of positive outcomes reported after implementing TOC

Percentages are based on 42 implementations.

Besides the overall positive outcomes, a few implementations also reported neutral results (7%; n = 3) (Gupta & Kline, 2008 ; Kimbrough et al., 2015 ; Lubitsh et al., 2005 ) – no significant change in a measurement – and one reported an UDE (2%). The authors described this UDE as “at times, the growth in the throughput caused congestion on the ward and especially in further treatment at health centres” (Paavola, 2008 ). This occurred because the number of operations per day increased by 50% and changeover times reduced from 54 minutes to 13 minutes – which potentially generated 700 USD k-$800 k savings for the Hospital District and caused a positive impact in staff motivation. The undesirable consequence was the next workstation got congested because of the additional throughput.

Furthermore, we assessed the performance outcomes reported after implementing TOC in healthcare services. The data available ( Table 4 ) was analysed using exploratory data analysis methods, the same methods used by Mabin and Balderstone ( 2003 ).

Summary of performance outcomes related after implementing TOC in healthcare services

a Difference (%) in the percentage of patients meeting the 4-hour target. b We did not use aggregate results from Umble and Umble (Umble & Umble, 2006 ) because Knight et al. (Knight et al., 2004 ) provided more recent results. c Value extracted from a chart. d ORP: operating rooms productivity.

3.2.1. Waiting time (mean reduction: 50%)

We considered the waiting time for appointments, exams, and procedures. Over half of the sample had reductions on waiting time equal or greater than 50%.

3.2.2. Length of stay (mean reduction: 38%)

The LOS included a rich collection of environments (e.g., whole hospitals, specific wards, an emergency department) in different countries. Many studies reported reductions of over 50%.

3.2.3. Accident and Emergency Department 4-hour target (mean improvement: 61%)

Studies from the UK assessed improvements in A&E (Accident and Emergency – equivalent to emergency department) – based on the percentage of patients seen and released within the 4-hour target. It did not allow us to merge these results into length of stay. Results varied between 45% and 73%.

3.2.4. Overtime (mean reduction: 93%)

Those studies that reported overtime achieved a mean reduction of 93%. The reduction of overtime varied between 63% and 100% (most of the cases).

3.2.5. No-show and late-cancellation rate (mean reduction: 72%)

Two implementations focused on reducing no-show and cancellation rate. One implementation was able to reduce those rates at 53%, the other reduced 90%.

3.2.6. Operating room productivity (mean improvement: 43%)

Implementations that focused to improve operating rooms were able to increase the number of surgeries varying from 5% (during peak hours, reducing in 8% after hours) to 100%. In many cases, the improvement continued after the study, which would increase this longer mean if we had considered this longer period.

3.2.7. Changeover time (mean reduction: 41%)

Few studies reported the changeover time between operations, but those who reported experienced a mean reduction of 41%.

3.2.8. Throughput (mean improvement: 34%)

The most frequently reported outcome; throughput in TOC is defined as the rate at which the system generates “goal units” (Cox et al., 2012 ). In this case, we considered throughput as the number of patients adequately processed and we assessed the difference in this measure after implementing TOC. The lowest improvement was a 5% increase in surgery during peak hours (described above), the highest was a 100% increase in cataract surgeries. Nearly half of the cases had an increase of 40% or more.

Almost all organisations had successfully achieved and sustained improvement, but many of them apparently stagnated after that and did not report further improved outcomes. When it comes to continuous improvement, defining its sustainability is difficult since there is no clear definition and guidelines on how to assess it in past research. However, of those organisations that reported the sustainability of the solution (n = 34), 74% (n = 25) reported being successful in achieving and sustaining continuous improvement, i.e., were able to continue to improve beyond their initial improvement along time. The other 26% (n = 9) did not achieve or sustain continuous improvement. The remaining organisations (n = 8) did not provide follow-up on the achievement and sustainability of continuous improvement (uncertain).

3.3. Question 2: diffusion of TOC in healthcare

According to our findings, a typical TOC implementation in healthcare occurred in the Accident and Emergency Department of a United Kingdom (UK) public hospital. Nevertheless, TOC has been implemented in a diverse set of environments and countries.

Most of TOC implementations occurred in the UK or in the United States (USA), 28 out of 41. Although the USA had more published studies (9 studies), the UK took the lead in the total number of implementations (19 implementations in 6 studies). Finland is represented with 3 articles that describe 4 implementations. Other countries described in a single article or proceedings are Israel (3 implementations), Brazil (2 implementations), Netherlands (2 implementations), Italy (1 implementation), New Zealand (1 implementation), and Venezuela (1 implementation).

Considering the levels of care, tertiary care (e.g., hospitalised patients, surgeries) were the most common, contributing 76% (n = 35). Implementations in primary care (e.g., family medicine clinic) and secondary (i.e. speciality care, e.g., ophthalmology, psychiatric rehabilitation) corresponded to 9%; (n = 4) and 15%; (n = 7), respectively. These numbers reflect the fact that hospitals are the most common setting of TOC implementations (86%; n = 36) followed by clinics (7%; n = 3), home care (5%; n = 2), and a health system (2%; n = 1). The same is true considering the nature of services, although there were representatives of all categories, government health services account for the most with 62% (n = 26), followed by for-profit (21%; n = 9), and not-for-profit (17%; n = 7).

The description of the services revealed the diversity of environments where TOC was implemented. Accident and Emergency Departments (33%; n = 14) and operating room (12%; n = 5) stood out as the most common environments. However, the list of services where TOC was implemented includes highly specialised services (e.g., neurosurgery and heart surgery), a government health system run by the U.S. Air Force, a chemotherapy clinic, a family medicine clinic, a home care delivery system, and discharge planning.

We can view the elements that compose the health and social care industry similar to a chain structure. Each link of this health and social care chain corresponds to a different service provided (e.g., general practitioner, inpatient care) and they are organised according to complexity level and need of care (e.g., general practitioner + speciality care + emergency). An overloaded link preventing patients to access treatment in a timely manner may result in an increased demand for the next link of the chain (higher complexity treatment) as the illness progresses. All implementations evaluated had an impact within their respective links of the health and social care chain. However, 57% (n = 24) of the implementations also had an impact between the links. That means the consequences of those 24 TOC implementations reverberated across the health and social care chain, indirectly improving other links (e.g., reducing the time between the emergency department and hospital admission).

While most of the studies analysed only applied TOC in specific environments. the TOCICO video proceedings contained 3 holistic implementations. These holistic implementations included one hospital (for-profit) in Venezuela (Sierraalta-Arganguren, 2015 ) and 2 hospitals in the UK (De Kiewiet, 2012 ; Stratton & West, 2014 ).

3.4. Question 3: common problems (UDEs) faced by healthcare services

The reported problem (the gap) that motivated implementing TOC was identified in each case study and arranged into 4 different categories. The most common problems experienced by healthcare services involved in this systematic review were (1) insufficient productivity (31%; n = 9), usually represented as a pressure to do more and be faster with existing or less resources; followed by (2) inadequate timeliness of care (21%; n = 6), usually patients had to wait for long periods for their treatment, both when scheduling appointments and procedures (indirect waiting) and once in the clinic/hospital (direct waiting); (3) financial problems (21%; n = 6), profits were low or non-existent; and (4) issues in quality of care (e.g., healthcare provided not as good as desired, consumer and provider low satisfaction or dissatisfaction, patients at risk of more complications) (18%; n = 5) complete the list. One article and two proceedings (11%) did not describe clearly the gap between where the organisation was and where it should be with respect to its goal (Buwalda & Gijs, 2013 ; Lubitsh et al., 2005 ; Ronen & Pass, 2011 ).

The median number of UDEs reported was 4, but we found a minimum of 1 (Kimbrough et al., 2015 ; Wadhwa, 2007 ) and a maximum of 115 (Taylor, 2016 ). The latter was a video proceeding that mentioned the existence of 111 UDEs in one of its three implementations but did not described them. One article (Gonçalves et al., 2018 ) and two proceedings (Ronen & Pass, 2011 ; Stratton & West, 2014 ) did not report any UDE. All UDEs reported were analysed and arranged accordingly to their nature, resulting in 8 categories. The authors commonly reported more issues related to productivity (27%; n = 28), followed by financial outcomes (15%; n = 15) and market demand (12%; n = 12). Other UDEs reported were timeliness of care (11%; n = 11), lack of staff (10%; n = 10), logistics (10%; n = 10), staff satisfaction (8%; n = 8), and quality of care (6%; n = 6).

Since not all implementations described their UDEs, we considered only those 37 (88%) that did to assess whether they were able to address their UDEs. Most of the implementations (86%; n = 32) were able to address all their UDEs after TOC implementation, although a few implementations (12%; n = 5) could only partially address their UDEs (Gupta & Kline, 2008 ; Lubitsh et al., 2005 ; Paavola, 2008 ). Lubitsh et al. admitted that their results were biased due to a corporate merger being in process during the TOC implementation (“A frequently occurring complaint from staff was that the merger process was against the spirit of TOC and was undoing all the improvements which had come out of it.”) (Lubitsh et al., 2005 , p. 129).

3.5. Question 4: methods and tools used to apply TOC in healthcare services

The analysis of the TOC implementations sequence revealed many different approaches. The articles and video proceedings used 5 different TOC methods: 5FS, BM, thinking processes (TP), drum-buffer-rope (DBR), and CQS. The most used method reported was the 5FS, accounting for 76% (n = 32), followed by BM (60%; n = 25), TP (54%; n = 22), DBR (40%; n = 17), and CQS (17%; n = 7). Some implementations included more than 1 TOC method. Within the articles, 2 of them reported a maximum of 3 methods: Groop et al. ( 2012 , 2017 )) described the use of 5FS, CQS, and TP; while Cox, Robinson, and Maxwell (Cox et al., 2014 , 2016 ) described the use of 5FS, TP, and BM. The latter implementation described the use of all 5 methods on a video proceeding (Cox & Robinson, 2012 ). More details about each of these TOC methods and their adoption in each study are available as supplementary material.

Among other methods adopted to support the TOC implementations, 4 of them stood out: documented flow analysis (76%; n = 31), TOC training (69%; n = 29), improvement meetings (67%; n = 28) – frequently called buffer management meetings or huddles –, and participation of a TOC champion (64%; n = 27). Articles describe other relevant methods, such as process flowcharting, semi-structured interviews, and non-participant observation, but none of these methods achieved an adoption level of 50%. All methods used are available in Table 5 .

Methods and tools used to apply TOC in healthcare services

* Process flowcharting is very similar to documented flow analysis; we considered the former as a graphical representation of the latter.

4. Discussion

Articles and video proceedings accounted for a similar number of implementations, 22 and 24, respectively. However, the video proceedings had only 12 studies included while there were 15 articles. Only 5 implementations were documented both in articles and in video proceedings. The number of video proceedings would have been even higher if we had included theoretical studies. While the video proceedings represent the grey literature, these results demonstrate the relevance and necessity of including these studies in this review. On the other hand, theses/dissertations accounted for a small sample in this study (n = 2), reporting 4 implementations (also described in articles) (Groop, 2012 ; Lubitsh, 2002 ). This paucity demonstrates the need for academic healthcare researchers to proactively investigate such emerging topics as TOC.

Besides quantity, the quality of TOC implementations in academic studies is still lower than expected. Of course, there are good TOC implementations in academic papers. But, overall, our bias analysis revealed some gaps between academic and grey literature. Our framework assessed the implementations according to their adherence to TOC principles (and revealed when and where it was not achieved). Both academic and grey literature studies had well-described TOC implementations that achieved a high score, but academic studies had a lower mean score. Although the video proceedings provided rich details about the TOC tools and methods, many times they missed providing the implementation sequence. In contrast, academic studies provided a better description of the sequence. The fact that video proceedings were made to an audience familiar with TOC, whereas articles usually make no assumptions might help explain these differences to some extent.

Not surprisingly, most of the severe inconsistencies in applying TOC principles occurred in those studies that had the lowest score, including those studies that reported a few neutral results among their outcomes. Despite such shortcomings, all of them reported overall positive results. Some inconsistencies found involved skipping steps 2 (exploit) and 3 (subordinate) of the 5FS (Gonçalves et al., 2018 ), considering UDEs as bottlenecks (Kimbrough et al., 2015 ), staff not attending TOC committee meetings (Lubitsh, 2002 ; Lubitsh et al., 2005 ), and solutions based on cost accounting (Gupta & Kline, 2008 ), instead of throughput accounting. Throughput accounting is a management accounting method developed by Goldratt that evaluates the impact of any proposed local action on the system as a whole. Throughput accounting addresses the shortcomings of cost accounting on decision making (Budd, 2010 ).

4.1. Outcomes of applying the TOC in healthcare services

A relevant aspect of our findings is that all TOC implementations reported an overall positive outcome. Most implementations resulted in a dramatic improvement, particularly those that achieved higher scores in the bias analysis.

Most TOC recommendations and changes required little or no additional cost to implement and, whenever an investment was necessary, the return on investment (ROI) was usually immediate (or it pays off in the short-term) and much higher than the cost. Other methodologies, like Lean and Six-Sigma, usually demand more time, management attention, and financial resources (Blackmore & Kaplan, 2017 ; Chiarini & Bracci, 2013 ; D’Andreamatteo et al., 2015 ). Lean and Six Sigma implementations take much longer because they try to improve all processes of the system, lacking the focus to improve where it is needed to achieve the organization's goal. The benefits of combining the focusing mechanism of TOC with Lean and Six-Sigma tools to link local improvements to significant organisation results are huge. More importantly is the understanding that many “local improvements” do not translate into positive global results. The successful combination of TOC with other methodologies already exist (Pirasteh & Farah, 2006 ), including in Wadhwa ( 2007 ).

On the light of the outcomes reported, one may question whether the improvement in some measurements, such as an increase in throughput or operations performed and a decrease in LOS, might jeopardise the quality of care delivered. Actually, the quality and timeliness of care increase for two reasons: (1) a TOC implementation alleviates the workload of qualified medical professionals (the constraint) so they can spend more time with patients performing high skill-level tasks; furthermore, (2) as throughput increases and waiting time decreases, healthcare organisations are able to deliver care to more patients on a timely manner, preventing the worsening of clinical conditions (Ryu & Lee, 2017 ). These two aspects are directly related to better value provided and lead to better healthcare outcomes (Porter & Lee, 2013 ).

Sustainability of results is also a relevant concern. Those cases that achieved higher scores were also associated with continuous improvement. Many implementations (61%; n = 25) were able to successfully achieve and sustain continuous improvement. However, any TOC implementation involves a change mindset to build a new paradigm within the organisational culture. For this reason, in order to achieve continuous improvement, one must adopt and continuously use TOC principles to manage.

Like Mabin and Balderstone ( 2003 ), we faced the same concern when assessing the performance outcomes reported after implementing TOC in healthcare services. The existence of so many apparent gaps in the data could indicate that those factors were not improved, or that only a few factors in each case improved. Likewise, there are many valid reasons for those omissions. Many healthcare services adopted TOC with a specific focus, such as to increase throughput, and may have failed to give attention to (or find a need to measure or report) effects outside this focus. Moreover, it was difficult to collect hard data, some studies only presented measurements after implementing TOC (e.g., “elevated enrolment capacity by 800 additional enrolees”, “generated over 1.6 million additional revenue”). Many studies reported results that did not allow us to calculate (e.g., “daily number of operations has increased”). In many, if not all cases, the organisation was constantly fighting fires. Their role was to put out fires not to spend time documenting and measuring their problems.

The findings reported in this study become even more relevant when we realise that only 3 environments did a holistic implementation and only 1 environment reported the adoption of all TOC methods. The outcomes of all other 37 implementations resulted from applying some components of the overall TOC managerial philosophy. These results are only a partial demonstration of the power of TOC, corroborating results of a prior literature search of TOC applications (Mabin & Balderstone, 2003 ).

4.2. Diffusion of TOC in healthcare

Mabin and Balderstone ( 2003 ) stated that a great number of other TOC applications have never been published (and many of them probably never will) because they provide a competitive advantage. The same may be true for TOC applications in healthcare services.

The mean performance outcomes reported after implementing TOC in healthcare services provide good evidence of the adoption of TOC as a potential effective solution for the chronic problems in most, if not every, healthcare environment. The set of studies included in this review, though small, demonstrates that TOC has already attained significant results in all levels of care and many links of the health and social care chain. There are successful examples from general practice (Cox & Robinson, 2012 ; Cox et al., 2014 , 2016 ) to home care (Groop et al., 2017 ), described in 9 countries, on 4 continents. Furthermore, solutions proposed by Groop et al. ( 2017 ), or some variant of them, are now applied in at least 20% of the home care systems operating in Finland. At least 10 hospitals in the UK have already adopted TOC to support their practice (Knight et al., 2004 ). However, we only found a few cases in primary and speciality care.

4.3. Common problems (UDEs) faced by healthcare services

Shortages of hospital beds and workforce are frequently associated as common causes for lack of performance in healthcare services (Crisp & Chen, 2014 ; Song & Ferris, 2018 ). Nevertheless, TOC has proved with several successful cases its capacity to dramatically improve performance using the existing workforce; and, when necessary, usually hired an additional non-constraint, such as a medical assistant, at a reduced cost to leverage the constraint (the much expensive and scarce provider). Furthermore, the shortage of hospital beds did not present as a root cause, but as a symptom. As a matter of fact, the impressive mean reduction of 38% in LOS achieved by TOC also worked providing increased capacity to treat more patients within a given period of time using the same existing beds, as mentioned by Knight et al. ( 2004 ). Examples above and all other TOC outcomes show that healthcare services suffer from similar problems, but usually have a huge amount of protective capacity. These organisations are managing their resources and patient flow based on bad/outdated policies, which focus on improving local efficiency (not assessing its global impact on the organisation). Consequently, existing extra capacity is mismanaged, which leads to undesirable outcomes (e.g., long waiting, increased LOS). TOC demonstrated that it is possible to uncover the hidden capacity and achieve breakthrough results with no or little investment by proper management of critical resources and patient flow.

4.4. Methods and tools used to apply TOC in healthcare services

The three POOGI offered by TOC have proven extremely valuable in healthcare. The path to improving healthcare systems and organisations is described in the 5FS. First, organisations must identify (step 1) where the constraint is currently and where the constraint should strategically be. Next, they need to uncover their hidden potential by making better use of existing resources (steps 2 and 3). Only after achieving their true potential should the organisations consider the need to invest in acquiring more capacity (step 4). But to continue improving, it is essential to remember step 5: do not let inertia become the system constraint.

Many times, however, a policy, procedure, rule, measure or behaviour is blocking patient flow (details explained in the supplementary material). In these cases, the TP and the CQS are quite useful in identifying and addressing these types of problems. Buffer management is extremely useful in hospital environments, where demand is uncertain (for example, in the emergency department where no appointment schedule exists) and where there are thousands of potential processes flows through the various hospital departments. DBR plays an important role once a patient process flow is then identified and frequently updated by the patient’s physician (the drum) to ensure the patient receives appropriate and timely healthcare (Strear & Sirias, 2020 ). Knight’s Pride and Joy ( 2014 ) provides numerous instances of the use of TOC in a healthcare environment. In an outpatient environment, buffer management is extremely useful in proactively managing the rapid treatment of acute patients, pulling patients forward in time to imminent vacant appointment slots, and monitoring overall and specific appointment types backlogs, as explained in a 2-article series where the authors used TOC to address commonly studied appointment scheduling system design and execution problems (Cox, 2019 ; Cox & Boyd, 2018 ).

5. Limitations

Naturally, this work has some limitations and we would like to acknowledge them. First, the number of TOC implementations described in this study is small. Our dilemma in addressing this limitation was the traditional “Rigor versus Relevance” quandary. Do we wait another ten or more years so that enough published academic research is available to conduct statistical tests of significance OR do we conduct an exploratory investigation of what is available today in hopes that other researchers will move forward in learning more about TOC in healthcare and be on the forefront of developing new knowledge instead of the traditional role of academics of just reporting history? We choose the latter.

As an effort to address the above-mentioned limitation, we included grey literature sources, here represented as TOCICO video proceedings and academic theses. As previously stated, TOCICO is a not-for-profit certification and knowledge development and dissemination organisation. Many members are certified in all aspects of TOC; others are on that journey. Most members are consultants and have led dozens to hundreds of TOC implementations. These presentations are vetted by the top TOC experts in the world. Presenters willingly share their successful and failed implementations in hopes of developing better solutions. Similarly, theses and dissertations are vetted by the students’ examination committees.

A lesser limitation is that we tried to analyse each implementation separately, but many times a single article or video presentation reporting multiple cases treated them as one. Furthermore, this review only considered practical implementations directly related to patient flow. There are many other successful case studies in support services, such as logistic service of medical records in a hospital (Aguilar-Escobar et al., 2016 ), hospital inventory management (Wang et al., 2015 ), medical claims processing (Taylor & Sheffield, 2002 ), and developing technical reports for healthcare decision-makers (Patwardhan et al., 2006 ). These healthcare support-services TOC implementations differ little from TOC implementations in other services, so they provide no gain in TOC knowledge in healthcare.

5.1. Recommendations for future work

In the future, it would be of great value to science and management to have a systematic review that includes theoretical papers with proposed solutions, even though never implemented. Other recommendations are (1) a study revealing details of the most common TOC tools and methods used in the healthcare environments, (2) more studies about TOC in primary care and speciality care, (3) TOC combined with other methodologies, and (4) to develop generic templates of various applications based on the literature and successful case studies through theory building for use in implementing TOC in similar environments (theory testing). Cox and Boyd ( 2018 ) provided such a template for outpatient schedule design and Cox ( 2019 ) provided a template for outpatient schedule execution for testing and modification by other researchers.

6. Conclusion

Existing literature has revealed TOC as a potential effective solution to address the chronic healthcare problems. All documented healthcare services that implemented TOC achieved positive results, even those that only used some components or did a marginal implementation. Those organisations that adequately applied TOC were able to rapidly achieve breakthrough improvement, and with no or little investment. Furthermore, recent research shows that combining the focusing mechanism of TOC with other existing methodologies (e.g., Lean, Six-sigma) would provide larger benefits than using the other methodologies alone. TOC provided positive results in many different environments along the health and social care chain, and in many different countries, which leads one to believe they can be used to improve almost any healthcare environment.

Supplementary Material

Acknowledgments.

This work was supported by the FCT – Fundação para a Ciência e a Tecnologia as part of a PhD scholarship [PD/BD/129829/2017]. This PhD scholarship was funded by the European Social Fund and national MCTES funds. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of this manuscript.

Funding Statement

Fundação para a Ciência e a Tecnologia [PD/BD/129829/2017]

Declaration of interest statement

The authors declare no conflict of interest.

Supplementary material

Supplemental data for this article can be accessed here .

  • Aguilar-Escobar, V. G., Garrido-Vega, P., & González-Zamora, M. M. (2016). Applying the theory of constraints to the logistics service of medical records of a hospital . European Research on Management and Business Economics , 22 ( 3 ), 139–146. 10.1016/j.iedee.2015.07.001 [ CrossRef ] [ Google Scholar ]
  • Al Talalwah, N., & McIltrot, K. H. (2019). Cancellation of surgeries: Integrative review . Journal of PeriAnesthesia Nursing , 34 ( 1 ), 86–96. 10.1016/j.jopan.2017.09.012 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Auger, P. (1998). Information sources in grey literature . De Gruyter. [ Google Scholar ]
  • Bacelar, G. (2019). How a doctor implemented TOC and improved his ophthalmology practice over 50% in a few weeks . TOCICO 2019 International Conference Proceedings . TOCICO International Conference: 17th Annual Worldwide Gathering of TOC Professionals. https://www.tocico.org/page/2019Bacelar [ Google Scholar ]
  • Blackmore, C. C., & Kaplan, G. S. (2017). Lean and the perfect patient experience . BMJ Quality & Safety , 26 ( 2 ), 85. 10.1136/bmjqs-2016-005273 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Brandão de Souza, L. (2009). Trends and approaches in lean healthcare . Leadership in Health Services , 22 ( 2 ), 121–139. 10.1108/17511870910953788 [ CrossRef ] [ Google Scholar ]
  • Budd, C. S. (2010). CHAPTER 13: Traditional measures in finance and accounting, problems, literature review, and TOC measures. In Cox, J. F., & Schleier Jr, J. G. (Eds.),  Theory of constraints handbook (pp. 335–371). McGrawHill. [ Google Scholar ]
  • Buwalda, P. E., & Gijs, A. (2013). Increase quality, decrease stress in a hospital . TOCICO International Public Sector Effectiveness Conference Proceedings . TOCICO International Public Sector Effectiveness Conference. [ Google Scholar ]
  • Cattaneo, C., & Bassani, G. (2016). The TOC thinking process: The viability of change . Human Systems Management , 35 ( 4 ), 301–323. 10.3233/HSM-161616 [ CrossRef ] [ Google Scholar ]
  • Chiarini, A., & Bracci, E. (2013). Implementing lean six sigma in healthcare: Issues from Italy . Public Money & Management , 33 ( 5 ), 361–368. 10.1080/09540962.2013.817126 [ CrossRef ] [ Google Scholar ]
  • Corley, J. (2016). The global health care crisis no one is talking about . HuffPost. https://www.huffpost.com/entry/the-global-health-care-cr_b_10074262
  • Cox, J. F. (2019). Using the theory of constraints’ processes of ongoing improvement to address the provider appointment scheduling system execution problem . Health Systems , 1–32. 10.1080/20476965.2019.1646105 [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Cox, J. F., & Boyd, L. H. (2018). Using the theory of constraints’ processes of ongoing improvement to address the provider appointment scheduling system design problem . Health Systems , 9 (2), 1–35. 10.1080/20476965.2018.1471439 [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Cox, J. F., Boyd, L. H., Sullivan, T. T., Reid, R. A., & Cartier, B. (2012). The theory of constraints international certification organization dictionary (Second Edition) . McGraw-Hill Education. http://www.tocico.org/?page=dictionary [ Google Scholar ]
  • Cox, J. F., & Robinson, T. M. (2012). The use of TOC in a medical appointment scheduling system for family practice . TOCICO Conference 2012: 10th Annual Worldwide Gathering of TOC Professionals , 10. https://www.tocico.org/page/12ConfVid9 [ Google Scholar ]
  • Cox, J. F., Robinson, T. M., & Maxwell, W. (2014). Applying the ‘theory of constraints’ to solve your practice’s most vexing problem . Family Practice Management , 21 ( 5 ), 18–22. https://www.aafp.org/fpm/2014/0900/p18.html [ PubMed ] [ Google Scholar ]
  • Cox, J. F., Robinson, T. M., & Maxwell, W. (2016). Unconstraining a doctor’s office. TOC’s buffer management can help solve core scheduling problems . Industrial Engineer , 48 ( 2 ), 28–33. https://www.iise.org/IndustrialEngineer/details.aspx?id=40935 [ Google Scholar ]
  • Crisp, N., & Chen, L. (2014). Global supply of health professionals . New England Journal of Medicine , 370 ( 10 ), 950–957. 10.1056/NEJMra1111610 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • D’Andreamatteo, A., Ianni, L., Lega, F., & Sargiacomo, M. (2015). Lean in healthcare: A comprehensive review . Health Policy , 119 ( 9 ), 1197–1209. 10.1016/j.healthpol.2015.02.002 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • de Kiewiet, M. (2012). Solid gains throughout an acute hospital . TOCICO Conference 2012: 10th Annual Worldwide Gathering of TOC Professionals , 10 . https://www.tocico.org/page/12ConfVid1 [ Google Scholar ]
  • Goldratt, E. M. (1986). The race . North River Press. [ Google Scholar ]
  • Goldratt, E. M. (1994). It’s not luck . http://catalog.hathitrust.org/api/volumes/oclc/31443609.html
  • Goldratt, E. M. (1999). Theory of constraints: What is this thing called and how should it be implemented? North River Press. [ Google Scholar ]
  • Goldratt, E. M., & Cox, J. (2004). The goal: A process of ongoing improvement . (3., rev. ed., 20. anniversary ed). North River Press. [ Google Scholar ]
  • Gonçalves, A. A., De Castro Silva, S. L. F., Martins, C. H. F., Cheng, C., Barbosa, J. G. P., & De Oliveira, S. B. (2018). Decision Support Systems in Cancer Treatment: A Case Study at Brazilian National Cancer Institute . Studies in Health Technology and Informatics , 251 , 199–202. 10.3233/978-1-61499-880-8-199 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Groop, J. (2012). Theory of Constraints in field service: Factors limiting productivity in home care operations [Doctoral dissertation] . Aalto University. http://lib.tkk.fi/Diss/ [ Google Scholar ]
  • Groop, J., Ketokivi, M., Gupta, M., & Holmström, J. (2017). Improving home care: Knowledge creation through engagement and design . Journal of Operations Management , 53–56 ( 1 ), 9–22. 10.1016/j.jom.2017.11.001 [ CrossRef ] [ Google Scholar ]
  • Gupta, M., & Kline, J. (2008). Managing a community mental health agency: A Theory of Constraints based framework . Total Quality Management and Business Excellence , 19 ( 3 ), 281–294. 10.1080/14783360701601850 [ CrossRef ] [ Google Scholar ]
  • Gupta, M. C., Bridgman, S., & Kaur Sahi, G. (2015). Application of TOC-based framework to improve market orientation in a non-profit organization . Journal of Strategic Marketing , 23 ( 7 ), 579–599. 10.1080/0965254X.2014.1001865 [ CrossRef ] [ Google Scholar ]
  • Halim, S. (2019). Is healthcare on the brink of a global workforce crisis? Health Europa . https://www.healtheuropa.eu/global-workforce-crisis/90846/ [ Google Scholar ]
  • Han, J. H., Zhou, C., France, D. J., Zhong, S., Jones, I., Storrow, A. B., & Aronsky, D. (2007). The effect of emergency department expansion on emergency department overcrowding . Academic Emergency Medicine , 14 ( 4 ), 338–343. 10.1197/j.aem.2006.12.005 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Karvonen, S., Rämö, J., Leijala, M., & Holmström, J. (2004). Productivity improvement in heart surgery—A case study on care process development . Production Planning and Control , 15 ( 3 ), 238–246. 10.1080/09537280410001670322 [ CrossRef ] [ Google Scholar ]
  • Kim, C. S., Spahlinger, D. A., Kin, J. M., & Billi, J. E. (2006). Lean health care: What can hospitals learn from a world-class automaker? Journal of Hospital Medicine , 1 ( 3 ), 191–199. 10.1002/jhm.68 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Kimbrough, C. W., McMasters, K. M., Canary, J., Jackson, L., Farah, I., Boswell, M. V., Kim, D., & Scoggins, C. R. (2015). Improved operating room efficiency via constraint management: Experience of a tertiary-care academic medical center . Journal of the American College of Surgeons , 221 ( 1 ), 154–162. 10.1016/j.jamcollsurg.2015.02.032 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Knight, A. (2014). Pride and joy (1st ed.). Linney Group Ltd. [ Google Scholar ]
  • Knight, A., Schragenheim, E., Gibb, H., & Schragenheim, A. (2004). Making TOC the main way in health and social care . TOCICO Conference 2004: 2nd Annual Worldwide Gathering of TOC Professionals , 2 . https://vimeopro.com/tocico/2004-international-conference-presentations/video/165916359 [ Google Scholar ]
  • Lubitsh, G. (2002). A longitudinal study into the impact of theory of constraints (TOC) on three departments in an NHS trust [Doctoral dissertation] . University of East London. [ Google Scholar ]
  • Lubitsh, G., Doyle, C., & Valentine, J. (2005). The impact of theory of constraints (TOC) in an NHS trust . Journal of Management Development , 24 ( 2 ), 116–131. 10.1108/02621710510579482 [ CrossRef ] [ Google Scholar ]
  • Mabin, V. (2019). Using TOC to improve the delivery of chemotherapy for cancer treatments in a large public hospital . TOCICO 2019 International Conference Proceedings . TOCICO International Conference: 17th Annual Worldwide Gathering of TOC Professionals. https://www.tocico.org/page/2019Mabin2 [ Google Scholar ]
  • Mabin, V. (2020). How TOC dramatically improved the delivery of chemotherapy treatments in a large public hospital . TOCICO 2020 International Conference Proceedings . TOCICO Virtual Conference. [ Google Scholar ]
  • Mabin, V., & Balderstone, S. J. (2003). The performance of the theory of constraints methodology: Analysis and discussion of successful TOC applications . International Journal of Operations & Production Management , 23 ( 6 ), 568–595. 10.1108/01443570310476636 [ CrossRef ] [ Google Scholar ]
  • Mabin, V., & Mirzaei, M. (2016). Expanding the world of theory of constraints . 2016 TOCICO International Video Conference Proceedings . 2016 TOCICO International Conference. [ Google Scholar ]
  • Mabin, V., Yee, J., Babington, S., Caldwell, V., & Moore, R. (2018). Using the theory of constraints to resolve long-standing resource and service issues in a large public hospital . Health Systems , 7 ( 3 ), 230–249. 10.1080/20476965.2017.1403674 [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Morley, C., Unwin, M., Peterson, G. M., Stankovich, J., & Kinsman, L. (2018). Emergency department crowding: A systematic review of causes, consequences and solutions . Plos One , 13 ( 8 ), e0203316. 10.1371/journal.pone.0203316 [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Murray, M., & Berwick, D. M. (2003). Advanced access: Reducing waiting and delays in primary care . JAMA , 289 ( 8 ), 1035–1040. 10.1001/jama.289.8.1035 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Paavola, T. (2008). Exploiting Process thinking in Health Care . International Journal of Healthcare Information Systems and Informatics (IJHISI) , 3 ( 2 ), 12–20. 10.4018/jhisi.2008040102 [ CrossRef ] [ Google Scholar ]
  • Paez, A. (2017). Gray literature: An important resource in systematic reviews . Journal of Evidence-Based Medicine , 10 ( 3 ), 233–240. 10.1111/jebm.12266 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Patwardhan, M. B., Sarría-Santamera, A., & Matchar, D. B. (2006). Improving the process of developing technical reports for health care decision-makers: Using the theory of constraints in the evidence-based practice centers . International Journal of Technology Assessment in Health Care , 22 ( 1 ), 26–32. Cambridge Core. 10.1017/S026646230605080X [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Pirasteh, R. M., & Farah, K. S. (2006). Continuous improvement trio—the top elements of TOC, lean and six sigma make beautiful music together . APICS Magazine , 16 (5), 31–33. [ Google Scholar ]
  • Poksinska, B. B., Fialkowska-Filipek, M., & Engström, J. (2017). Does Lean healthcare improve patient satisfaction? A mixed-method investigation into primary care . BMJ Quality & Safety , 26 ( 2 ), 95. 10.1136/bmjqs-2015-004290 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Porter, M. E., & Lee, T. H. (2013). The strategy that will fix health care . Harvard Business Review , 90 ( 10 ), 50–70. https://hbr.org/2013/10/the-strategy-that-will-fix-health-care [ Google Scholar ]
  • Ronen, B. (2005). Special issue on the theory of constraints—practice and research . Human Systems Management , 24 (1) , 1–2. https://content.iospress.com/articles/human-systems-management/hsm571 [ Google Scholar ]
  • Ronen, B., & Pass, S. (2011). Throughput enhancement in operating rooms: Doing more with existing resources . TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals , 9 . https://www.tocico.org/page/11ConfVid21 [ Google Scholar ]
  • Ryu, J., & Lee, T. H. (2017). The waiting game—why providers may fail to reduce wait times . New England Journal of Medicine , 376 ( 24 ), 2309–2311. 10.1056/NEJMp1704478 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Shamseer, L., Moher, D., Clarke, M., Ghersi, D., Liberati, A., Petticrew, M., Shekelle, P., & Stewart, L. A., the PRISMA-P Group . (2015). Preferred reporting items for systematic review and meta-analysis protocols (PRISMA-P) 2015: Elaboration and explanation . BMJ , 349 ( 1 ), g7647. 10.1136/bmj.g7647 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Sierraalta-Arganguren, M. C. (2015). Transformation of the flow of patient-centered care in the emergency room . TOCICO Conference 2015: 13th Annual Worldwide Gathering of TOC Professionals , 13 . https://www.tocico.org/page/15ConfVid37 [ Google Scholar ]
  • Sisko, A. M., Keehan, S. P., Poisal, J. A., Cuckler, G. A., Smith, S. D., Madison, A. J., Rennie, K. E., & Hardesty, J. C. (2019). National health expenditure projections, 2018–27: Economic and demographic trends drive spending and enrollment growth . Health Affairs , 38 ( 3 ), 491–501. 10.1377/hlthaff.2018.05499 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Song, Z., & Ferris, T. G. (2018). Baby boomers and beds: A demographic challenge for the ages . Journal of General Internal Medicine , 33 ( 3 ), 367–369. 10.1007/s11606-017-4257-x [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • Stratton, R., & Knight, A. (2010). Managing patient flow using time buffers . Journal of Manufacturing Technology Management , 21 ( 4 ), 484–498. 10.1108/17410381011046599 [ CrossRef ] [ Google Scholar ]
  • Stratton, R., & West, B. (2014). A holistic solution for community health and social care . TOCICO Conference 2014: 12th Annual Worldwide Gathering of TOC Professionals , 12 . https://www.tocico.org/page/14ConfVid75 [ Google Scholar ]
  • Strear, C., & Sirias, D. (2020). Smash the bottleneck: Fixing patient flow for better care (and a better bottom line) . Health Administration Press. [ Google Scholar ]
  • Taylor, B. (2016). TOC in US healthcare strategy and operations . TOCICO International Conference: 14th Annual Worldwide Gathering of TOC Professionals , 14 . https://www.tocico.org/page/16ConfVid70 [ Google Scholar ]
  • Taylor, L. J., & Sheffield, D. (2002). Goldratt’s thinking process applied to medical claims processing . Hospital Topics , 80 ( 4 ), 13–21. 10.1080/00185860209598005 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • TOCICO . (2018). Theory of constraints international certification organization . https://www.tocico.org/ [ Google Scholar ]
  • Umble, M., & Umble, E. J. (2006). Utilizing buffer management to improve performance in a healthcare environment . European Journal of Operational Research , 174 ( 2 ), 1060–1075. 10.1016/j.ejor.2005.02.059 [ CrossRef ] [ Google Scholar ]
  • Wadhwa, G. (2007). Viable vision: Achievable in healthcare . TOCICO Conference 2007: 5th Annual Worldwide Gathering of TOC Professionals , 5. https://vimeopro.com/tocico/2007-international-conference-presentations/video/165330301 [ Google Scholar ]
  • Wang, L., Cheng, C., Tseng, Y., & Liu, Y. (2015). Demand-pull replenishment model for hospital inventory management: A dynamic buffer-adjustment approach . International Journal of Production Research , 53 ( 24 ), 7533–7546. 10.1080/00207543.2015.1102353 [ CrossRef ] [ Google Scholar ]
  • Womack, D. E., & Flowers, S. (1999). Improving system performance: A case study in the application of the theory of constraints . Journal of Healthcare Management , 44 ( 5 ), 397–407. 10.1097/00115514-199909000-00013 [ PubMed ] [ CrossRef ] [ Google Scholar ]
  • World Health Organization . (2010). The world health report: Health systems financing: The path to universal coverage . World Health Organization. http://www.who.int/whr/2010/en/ [ PMC free article ] [ PubMed ]
  • World Health Organization . (2019). World health statistics 2019: Monitoring health for the SDGs, sustainable development goals . World Health Organization. https://www.who.int/gho/publications/world_health_statistics/2019/en/
  • Young, T., Brailsford, S., Connell, C., Davies, R., Harper, P., & Klein, J. H.. Using industrial processes to improve patient care . (2004). BMJ : British Medical Journal , 328 ( 7432 ), 162–164. PMC. 10.1136/bmj.328.7432.162 [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]

Logo

Theory of Constraints (TOC)

THE BIG IDEA

What Is the Theory of Constraints?

The Theory of Constraints is a methodology for identifying the most important limiting factor (i.e., constraint) that stands in the way of achieving a goal and then systematically improving that constraint until it is no longer the limiting factor. In manufacturing, the constraint is often referred to as a bottleneck.

The Theory of Constraints takes a scientific approach to improvement. It hypothesizes that every complex system, including manufacturing processes, consists of multiple linked activities, one of which acts as a constraint upon the entire system (i.e., the constraint activity is the “weakest link in the chain”).

So what is the ultimate goal of most manufacturing companies? To make a profit – both in the short term and in the long term. The Theory of Constraints provides a powerful set of tools for helping to achieve that goal, including:

  • The Five Focusing Steps: a methodology for identifying and eliminating constraints
  • The Thinking Processes: tools for analyzing and resolving problems
  • Throughput Accounting: a method for measuring performance and guiding management decisions

Dr. Eliyahu Goldratt conceived the Theory of Constraints (TOC), and introduced it to a wide audience through his bestselling 1984 novel, “The Goal”. Since then, TOC has continued to evolve and develop, and today it is a significant factor within the world of management best practices.

One of the appealing characteristics of the Theory of Constraints is that it inherently prioritizes improvement activities. The top priority is always the current constraint. In environments where there is an urgent need to improve, TOC offers a highly focused methodology for creating rapid improvement.

A successful Theory of Constraints implementation will have the following benefits:

  • Increased Profit: the primary goal of TOC for most companies
  • Fast Improvement: a result of focusing all attention on one critical area – the system constraint
  • Improved Capacity: optimizing the constraint enables more product to be manufactured
  • Reduced Lead Times: optimizing the constraint results in smoother and faster product flow
  • Reduced Inventory: eliminating bottlenecks means there will be less work-in-process

Banner Ad

Basics of TOC

Core concept.

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.

Circle flowchart featuring the Five Focusing Steps of TOC.

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

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:

Throughput Accounting

Throughput Accounting is an alternative accounting methodology that attempts to eliminate harmful distortions introduced from traditional accounting practices – distortions that promote behaviors contrary to the goal of increasing profit in the long term.

In traditional accounting, inventory is an asset (in theory, it can be converted to cash by selling it). This often drives undesirable behavior at companies – manufacturing items that are not truly needed. Accumulating inventory inflates assets and generates a “paper profit” based on inventory that may or may not ever be sold (e.g., due to obsolescence) and that incurs cost as it sits in storage. The Theory of Constraints, on the other hand, considers inventory to be a liability – inventory ties up cash that could be used more productively elsewhere.

In traditional accounting, there is also a very strong emphasis on cutting expenses. The Theory of Constraints, on the other hand, considers cutting expenses to be of much less importance than increasing throughput. Cutting expenses is limited by reaching zero expenses, whereas increasing throughput has no such limitations.

These and other conflicts result in the Theory of Constraints emphasizing Throughput Accounting, which uses as its core measures: Throughput, Investment, and Operating Expense.

In addition, Throughput Accounting has four key derived measures: Net Profit, Return on Investment, Productivity, and Investment Turns.

Net Profit = Throughput − Operating Expenses

Return on Investment = Net Profit / Investment

Productivity = Throughput / Operating Expenses

Investment Turns = Throughput / Investment

In general, management decisions are guided by their effect on achieving the following improvements (in order of priority):

  • Will Throughput be increased?
  • Will Investment be reduced?
  • Will Operating Expenses be reduced?

The strongest emphasis (by far) is on increasing Throughput. In essence, TOC is saying to focus less on cutting expenses (Investment and Operating Expenses) and focus more on building sales (Throughput).

Drum-Buffer-Rope

Drum-Buffer-Rope (DBR) is a method of synchronizing production to the constraint while minimizing inventory and work-in-process.

The “Drum” is the constraint. The speed at which the constraint runs sets the “beat” for the process and determines total throughput.

The “Buffer” is the level of inventory needed to maintain consistent production. It ensures that brief interruptions and fluctuations in non-constraints do not affect the constraint. Buffers represent time; the amount of time (usually measured in hours) that work-in-process should arrive in advance of being used to ensure steady operation of the protected resource. The more variation there is in the process the larger the buffers need to be. An alternative to large buffer inventories is sprint capacity (intentional overcapacity) at non-constraints. Typically, there are two buffers:

  • Constraint Buffer: immediately before the constraint; protects the constraint
  • Customer Buffer: at the very end of the process; protects the shipping schedule

The “Rope” is a signal generated by the constraint indicating that some amount of inventory has been consumed. This in turn triggers an identically sized release of inventory into the process. The role of the rope is to maintain throughput without creating an accumulation of excess inventory.

The Nature of Constraints

What are constraints.

Constraints are anything that prevents the organization from making progress towards its goal. In manufacturing processes, constraints are often referred to as bottlenecks. Interestingly, constraints can take many forms other than equipment. There are differing opinions on how to best categorize constraints; a common approach is shown in the following table.

There are also differing opinions on whether a system can have more than one constraint. The conventional wisdom is that most systems have one constraint, and occasionally a system may have two or three constraints.

In manufacturing plants where a mix of products is produced, it is possible for each product to take a unique manufacturing path and the constraint may “move” depending on the path taken. This environment can be modeled as multiple systems – one for each unique manufacturing path.

Policy Constraints

Policy constraints deserve special mention. It may come as a surprise that the most common form of constraint (by far) is the policy constraint.

Since policy constraints often stem from long-established and widely accepted policies, they can be particularly difficult to identify and even harder to overcome. It is typically much easier for an external party to identify policy constraints, since an external party is less likely to take existing policies for granted.

When a policy constraint is associated with a firmly entrenched paradigm (e.g., “we must always keep our equipment running to lower the manufacturing cost per piece”), a significant investment in training and coaching is likely to be required to change the paradigm and eliminate the constraint.

Policy constraints are not addressed through application of the Five Focusing Steps. Instead, the three questions discussed earlier in the Thinking Processes section are applied:

The Thinking Processes are designed to effectively work through these questions and resolve conflicts that may arise from changing existing policies.

TOC Example

An excellent way to deepen your understanding of the Theory of Constraints is to walk through a simple implementation example. In this example, the Five Focusing Steps are used to identify and eliminate an equipment constraint (i.e., bottleneck) in the manufacturing process.

Step One – Identify the Constraint

In this step, the manufacturing process is reviewed to identify the constraint. A simple but often effective technique is to literally walk through the manufacturing process looking for indications of the constraint.

The deliverable for this step is the identification of the single piece of equipment that is constraining process throughput.

Step Two – Exploit the Constraint

In this step, the objective is to make the most of what you have – maximize throughput of the constraint using currently available resources. The line between exploiting the constraint (this step) and elevating the constraint (the fourth step) is not always clear. This step focuses on quick wins and rapid relief; leaving more complex and substantive changes for later.

The deliverable for this step is improved utilization of the constraint, which in turn will result in improved throughput for the process. If the actions taken in this step “break” the constraint (i.e., the constraint moves) jump ahead to Step Five. Otherwise, continue to Step Three.

Step Three – Subordinate and Synchronize to the Constraint

In this step, the focus is on non-constraint equipment. The primary objective is to support the needs of the constraint (i.e., subordinate to the constraint). Efficiency of non-constraint equipment is a secondary concern as long as constraint operation is not adversely impacted.

By definition, all non-constraint equipment has some degree of excess capacity. This excess capacity is a virtue, as it enables smoother operation of the constraint. The manufacturing process is purposely unbalanced:

Some useful techniques for this step include:

The deliverable for this step is fewer instances of constraint operation being stopped by upstream or downstream equipment, which in turn results in improved throughput for the process. If the actions taken in this step “break” the constraint (i.e., the constraint moves) jump ahead to Step Five. Otherwise, continue to Step Four.

Step Four – Elevate Performance of the Constraint

In this step, more substantive changes are implemented to “break” the constraint. These changes may necessitate a significant investment of time and/or money (e.g., adding equipment or hiring more staff). The key is to ensure that all such investments are evaluated for effectiveness (preferably using Throughput Accounting metrics).

The deliverable for this step is a significant enough performance improvement to break the constraint (i.e., move the constraint elsewhere).

Step Five – Repeat the Process

In this step, the objective is to ensure that the Five Focusing Steps are not implemented as a one-off improvement project. Instead, they should be implemented as a continuous improvement process.

This step also includes a caution…beware of inertia. Remain vigilant and ensure that improvement is ongoing and continuous. The Five Focusing Steps are kind of like “Whac-A-Mole”…pound one constraint down and then move right on to the next!

Integrating with Lean

Contrasting theory of constraints and lean manufacturing.

The Theory of Constraints and Lean Manufacturing are both systematic methods for improving manufacturing effectiveness. However, they have very different approaches:

  • The Theory of Constraints focuses on identifying and removing constraints that limit throughput. Therefore, successful application tends to increase manufacturing capacity.
  • Lean Manufacturing focuses on eliminating waste from the manufacturing process. Therefore, successful application tends to reduce manufacturing costs.

Both methodologies have a strong customer focus and are capable of transforming companies to be faster, stronger, and more agile. Nonetheless, there are significant differences, as highlighted in the following table.

From the perspective of the Theory of Constraints, it is more practical and less expensive to maintain a degree of excess capacity for non-constraints (i.e., an intentionally unbalanced line) than to try to eliminate all sources of variation (which is necessary to efficiently operate a balanced line). Eliminating variation is still desirable in TOC; it is simply given less attention than improving throughput.

Combining Theory of Constraints and Lean Manufacturing

One of the most powerful aspects of the Theory of Constraints is its laser-like focus on improving the constraint. While Lean Manufacturing can be focused, more typically it is implemented as a broad-spectrum tool.

In the real world, there is always a need to compromise, since all companies have finite resources. Not every aspect of every process is truly worth optimizing, and not all waste is truly worth eliminating. In this light, the Theory of Constraints can serve as a highly effective mechanism for prioritizing improvement projects, while Lean Manufacturing can provide a rich toolbox of improvement techniques. The result – manufacturing effectiveness is significantly increased by eliminating waste from the parts of the system that are the largest constraints on opportunity and profitability.

While Lean Manufacturing tools and techniques are primarily applied to the constraint, they can also be applied to equipment that is subordinated to the constraint (e.g., to equipment that starves or blocks the constraint; to post-constraint equipment that causes quality losses).

The remainder of this section describes how to apply a range of Lean Manufacturing tools and techniques to the Five Focusing Steps.

Process chart for applying the Five Focusing Steps of TOC with Lean Manufacturing tools and techniques.

Applying Lean Tools to “Identify the Constraint”

Lean Manufacturing provides an excellent tool for visually mapping the flow of production (Value Stream Mapping) as well as a philosophy that promotes spending time on the plant floor (Gemba).

Applying Lean Tools to “Exploit the Constraint”

Lean Manufacturing strongly supports the idea of making the most of what you have, which is also the underlying theme for exploiting the constraint. For example, lean teaches to organize the work area (5S), to motivate and empower employees (Visual Factory/Andon), to capture best practices (Standardized Work), and to brainstorm incremental ideas for improvement ( Kaizen ).

Applying Lean Tools to “Subordinate to the Constraint”

Lean Manufacturing techniques for regulating flow (Kanban) and synchronizing automated lines (Line Control) can be applied towards subordinating and synchronizing to the constraint.

Applying Lean Tools to “Elevate the Constraint”

Lean Manufacturing techniques for proactively maintaining equipment ( TPM ), dramatically reducing changeover times ( SMED ), building defect detection and prevention into production processes (Poka-Yoke), and partially automating equipment (Jidoka) all have direct application when elevating the constraint. TPM and SMED can also be viewed as exploitation techniques (maximizing throughput using currently available resources); however, they are fairly complex and are likely to benefit from working with outside experts.

WHAT YOU SHOULD DO NEXT...

1. Learn more about how our product, Vorne XL, can help you eliminate waste and significantly improve OEE.

Vorne XL is the simplest and fastest way to monitor and improve production. It's a one-time cost and takes just a day to install. And you can try it completely free for 90 days.

2. Download our FREE package of tools to supercharge your manufacturing productivity

The package includes leadership lessons, training guides, meeting and report templates, summaries of key concepts, project organizers, and more. You'll also receive our monthly newsletter for free. Unsubscribe at any time.

3. Sign up for our monthly newsletter

Get free monthly updates with proven methods for improving our manufacturing productivity. Unsubscribe at any time.

Everything You Need to Know About Theory of Constraints

By Kate Eby | July 24, 2017 (updated February 24, 2023)

  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn

Link copied

The past century has seen the rapid development of business management and business process improvement methodologies. From scientific measurement to Agile , with statistical process control, Six Sigma , and Lean Manufacturing in between, nearly every decade has seen a newly proposed framework. Who could have imagined that one of the most widely studied methodologies, promoted by top CEOs and used around the world, would first be communicated through a work of fiction? The Goal , by Eliyahu M. Goldratt, describes the trials and eventual success of a production manager, who learns to use “the goal” to make money for the company. Eventually the manager’s focus on “the goal” helps him find the path to productivity for the entire company. The tools and approaches he uses in the novel would later become the Theory of Constraints (TOC). 

In this article, we’ll discuss the history and principles of the Theory of Constraints. We’ll explain what a constraint is and why you should view it as a positive. We’ll explore the many tools described by the Theory of Constraints, including the Five Focusing Tools and the Thinking Processes. We’ll share examples and case studies from industry experts, and provide a list of resources to help you acquire an even richer understanding of the methodology.

What Is the Theory of Constraints?

The Theory of Constraints is a management approach that considers that at any given time, an organization is limited from achieving its highest goal by a single constraint. The theory provides tools to help identify and break through the constraint. Industry experts help create a richer picture of what TOC offers: 

Program Manager Chuck Werner describes TOC from a manufacturing perspective. “[It’s] all about the flow, and being able to move a part or move a step in a process along in a balanced way so that each stage in a process has the appropriate work to work on when it’s needed,” he says. 

Michael Clingan, a business consultant and certified TOC practitioner says, “It’s a prioritization method. It’s a way of looking at a complex system. Businesses have a lot of moving parts and TOC says, OK, how do I make the biggest impact without spending a lot of money, and that will make the most difference to what I’m trying to achieve with the business? ” 

TOC creator and author Eli Goldratt simply defined it as, “A Thinking Process that enables people to invent simple solutions to complex problems.”

Seeing the Big Picture Like a video camera, Theory of Constraints helps you to rack in and out of tight focus and look closely at a process or step, and then see the step in the context of the entire line, process, or organization. This holistic perspective is key to TOC because it views organizations as a chain of departments and functions. The axiom holds true that the chain is only as strong as its weakest link. If you find the weak link, or constraint as it’s called in TOC, and bring attention to it, you’ll find your way to meet your target.    TOC provides an alternative view of individual or local productivity in a product line or organization. Just because individuals or departments can speed through tasks and create high output doesn’t mean that they are benefiting the rest of company. TOC also holds that a company’s most important task is to make money or, for a services organization, to serve clients. A company accomplishes this goal not by creating a product, but by actually selling the product, or generating revenue. TOC calls this throughput . 

Tools and Methodologies In Theory of Constraints, managers and teams seek to find the answers to three basic questions, which provide an aim and a plan for problem-solving:

  • What to change?
  • What to change it to?

How to change it?

There are several tools unique to TOC. They provide structure and consistency in problem recognition and problem solving, and maintain focus on the organization’s goal. The main tools offered include: 

  • The Five Focusing Steps
  • The Thinking Processes
  • Throughput Accounting

Theory of Constraints is often compared to Lean Manufacturing, in that both are concerned with maintaining an efficient flow in production and both focus on continuous improvement. Like Lean thinking, TOC can serve both large and small, and for profit and nonprofit organizations. As in other circumstances, small companies may achieve better results. 

“It’s easier to use where you have access to the execs in charge of the whole organization,” says Clingan. “If I use Six Sigma, I can show cost or variation and that looks really good. TOC is more about impacting overall organizational performance and sometimes that takes a little longer to become visible.” 

Project Management Guide

Your one-stop shop for everything project management

the 101 guide to project management

Ready to get more out of your project management efforts? Visit our comprehensive project management guide for tips, best practices, and free resources to manage your work more effectively.

View the guide

Who Developed Theory of Constraints?

Eliyahu Goldratt, a physicist turned business consultant, articulated the Theory of Constraints in a 1984 novel, The Goal: A Process of Ongoing Improvement . In 1986, he created the Avraham Y. Goldratt Institute to teach the theory. He further elaborated his ideas in books such as Critical Chain and What is This Thing Called the Theory of Constraints? A movie based on the book The Goal is used in management training. One of Goldratt’s many quotable quotes is, “An expert is not someone who gives you an answer, an expert is someone who asks you the right question.”

Taking cues from linear programming and systems thinking, Goldratt described a systemic approach to achieving success. He described companies as containing circles, representing areas of specialization. Individuals in one area focus on their little circle. However, each area is joined, like links in a chain. In solving problems, someone in a circle can’t necessarily see the interdependency, and someone looking in from the outside can’t see the specific needs of each circle. The theory is sometimes referred to as Critical Chain Project Management.

What Is the Theory of Constraints Philosophy About Organizations? Theory of Constraints holds that any organization is actually simple. Everyone wants a win-win outcome, and there’s every reason for this to happen. All organizations are considered measurable and controllable by three characteristics:

  • Throughput: The rate at which the system creates money through sales
  • Operational Expense: All the money spent to turn inventory into throughput
  • Inventory: All the money invested for things to sell 

What Are the Benefits of Theory of Constraints?

When Theory of Constraints is applied well, it provides a philosophical change in an organization. Its effectiveness is not limited to manufacturing, and can bring benefits to banking, healthcare, sales, and other industries. Some of the specific benefits of TOC include: 

  • The concept of a constraint makes it easier to find what is slowing the advancement of the whole company.
  • Constraints focus improvements on where they can have the most impact on profit.
  • TOC provides a structure for continuing improvements. 
  • The holistic view of the company and the continuous search for constraints gives you better control over your process, so that you can anticipate backups.
  • TOC exposes additional capacity without further investment. In other words, TOC forces you to use what you already have, instead of immediately spending money for things such as new equipment or bigger facilities. 

By contrast, some consider that a methodology like Six Sigma focuses solely on improving a silo. Six Sigma focuses on improving quality, and quality may not be the only issue in an organization. As Dave Nave says of Six Sigma in his article “ How to Compare Six Sigma, Lean and the Theory of Constraints ,” “Improving all of an organization’s individual processes could have a detrimental effect on the company’s ability to satisfy the customer’s needs and provide product and services at the right time at the lowest cost. The realized savings might be less than the cost of all the improvements.”

TOC also provides a framework that can be effective in complex situations. Clingan gives the example of working to start up a Nigerian chemical fertilizer plant operation after ten years of neglect.

Michael Clingan

“There were people from all the different functional silos in the plant. There were people who were sub-contractors. There were people who’d been with the plant before and there were new kids,” describes Clingan. “And with all that going on, we still came out with good solutions to make the plant more reliable, and get fertilizer finished goods to the farmers who needed it most …  The team worked fantastically well together.”Michael Clingan, Certified TOC Expert and Goldratt Institute Certified Jonah’s Jonah, of The Claymore Group .

The Goal in Theory of Constraints

When discussing tools, it’s easy to forget an essential aspect of Theory of Constraints, and certainly, one that the philosophy says is easily missed in business: the goal. In Goldratt’s novel, the mentor, Jonah, says only one goal exists: to make money. Every action must trace back to that. In the movie version of The Goal, Jonah says, “Efficiencies aren’t the goal of a business. Why do you think your company built your business? To show off your efficiencies?” Fair wages or a good work environment aren’t the goal either. (However, note that while the goal for a business is generally to make money, the goal for a social service organization or government department may not be profit.) 

Chuck Werner

This emphasis on the goal distills through all layers of an organization. Everything starts with a goal, and every part of the company has a goal. Chuck Werner, Lean Program Manager and Six Sigma Master Black Belt with the Michigan Manufacturing Technology Center , explains, “If you want to sustain something — this is true in 5S , in the Toyota Production System , in TOC — you actually have to understand what its purpose is. As I say, what is the particular mission, of the line, of the process, of that particular operator. Team members have to truly understand what is value added and you truly have to understand what the purpose is.”

What Is a Constraint in Management?

If every system, or organization, has at least one constraint, then what exactly is a constraint? Goldratt defined a constraint as “Anything that limits a system from achieving higher performance versus its goal.” Basically, a constraint is a step or process that is producing less than what’s demanded of it, or it is something that limits profit, or in TOC terms, throughput. 

Rather than viewing them as problems, Goldratt saw constraints (also known as bottlenecks), as the keys to unlocking productivity. Constraint management accepts that constraints exist in most organizations. Although experts and practitioners disagree, they generally accept that only one constraint can exist at any time (although some say as many as three can exist at one time).

“Theory of Constraints works backward from the goal,” explains Clingan. “We’re not looking for just any constraint, only the one keeping us from achieving more of the goal.” 

By addressing only one or two constraints at a time, the next biggest problem appears, and so on. The benefit of focusing on one problem at a time is that it requires fewer material, financial, and emotional resources than does attacking everything at once. Clingan believes that working on multiple problems simultaneously can also result in the constraint simply moving back and forth between silos without ever being solved. 

What Do Constraints Look Like? A system can have internal or external constraints, and they can appear as physical or policy constraints. Here is how H. William Dettmer describes these in the ASQ white paper “Constraint Management.” 

  • Market: Not enough demand
  • Resource: Not enough people, equipment, or facilities to meet demand for deliverables
  • Material: Not enough materials in the quantity or quality needed to produce enough deliverables
  • Supplier/Vendor: Inconsistent supplies or too much lead time
  • Financial: Poor cash flow, so that a company must wait for deposits before work can begin on an order
  • Knowledge/Competence: Company employees don’t have the skill to improve the company or complete a job
  • Policy: Laws or policies that keep a company from its goal 

Policy constraints are the most common and often underlie other constraints. Absenteeism, for example, is a constraint, which may cause less experienced personnel to assume the duties of the absent worker. Constraints can also appear as a person. Werner gives the example of assigning one highly talented worker (capable of doing many different tasks) tasks better performed by a dedicated department. 

In contrast to a methodology like Six Sigma, which seeks quality and improvement throughout a process company, the focus in TOC is one constraint at a time. “The thing I’d love for people to know about Theory of Constraints is that you’re only working on one problem at a time, so you’re lining up your problems,” stresses Clingan. “You work on the biggest constraint and eliminate that; then you move to the next. It’s a sequential process. It’s not trying to improve everything at once.” 

The Five Focusing Steps in Theory of Constraints

To move nearer to your goal or even to achieve it, you must understand the company constraints. How do you recognize a constraint? The Five Focusing Steps — Identify, Exploit, Subordinate, Elevate, and Avoid Inertia — help you to find and address them.

  • Identify the First System Constraint: Use knowledge of the types and characteristics of constraints to find one. In manufacturing, this may be easy. “Step one, in true Theory of Constraints, is to look for what we call a big pile of stuff,” says Werner. It may be as simple as finding one worker overwhelmed with tasks, while the people on either side stand idle. Big piles before a step reveal a bottleneck. Breaking the constraint may be easy. If that’s the case, look for the next constraint.
  • Exploit the Constraint: Decide how to best to use the constraint without further investment. This concept harks back to the notion that a constraint is not a problem, but an opportunity. Werner gives the example of the shop that discovered their cutting machine operated only 60 percent of the time. They wanted to buy another machine. Werner advised them instead to improve scheduling of loading and setup for the machine. 

In his book, Dettmer elaborates further: “Exploitation of the constraint should be the kernel of tactical planning - ensuring the best performance the system can draw now . For this reason, the responsibility for exploitation lies with line managers who must provide the plan and communicate it so that everyone else understands the exploitation scheme for the immediate future.”

  • Subordinate Everything to the Constraint: Subordination means that parts of the system that are not constraints (called, unsurprisingly, non-constraints ), support the constraint. As Dettmer says, “This is, at the same time, the most important and the most difficult of the focusing steps to accomplish.” 

Subordinating can have social implications, because humans may not logically understand why, when they are performing well, they are being asked to slow down, and they may resent it. 

  • Elevate the Constraint: If the first three steps did fix or break the constraint, it’s time to elevate it. In other words, bring extra resources to the situation to increase capacity. 

Elevating a constraint might include adding more machines, or people, or shifts, or spending money for advertising, or hiring writers to create lead-generating web articles. Since elevation involves expenditure, you need to consider whether the ROI justifies the expense.  

  • Avoid Inertia: Throughout the Five Steps, if a constraint is broken in one step, you need to go back to the first step to identify other constraints. Goldratt called it POOGI — a process of ongoing improvement. Dettmer compares the Five Focusing Steps to PDCA (plan, do check, act).

You can anticipate constraints in existing processes, but you can also plan for them while designing a product, process, or service. Werner says you do that through value stream mapping the process. “You should look at what the cycles will be and work back with Takt time with the understanding that at the very least you should be able to meet 115 to 120 percent of the demand of the customer.”

5 Focusing Steps

What Are the Thinking Processes in Theory of Constraints?

In manufacturing, but especially in service and transactional industries where you may not see “big piles,” you may need to use other tools to find what’s keeping an organization from achieving its greatest success. Thinking Processes help to find the root cause of a problem by capturing the symptoms, called undesirable effects (UDEs). By arranging these responses in tree diagrams, an organization can get a picture of what’s happening. The Thinking Processes are designed to work through what the theory calls layers of resistance, the individual perceptions of why things aren’t working optimally. 

Clingan uses the Thinking Processes to help groups find the core constraint. Each team member provides an opinion to identify the constraint. He explains, “Someone may think that engineering is the problem. Someone else may think that manufacturing is just incompetent. But when you get everyone in a room and you're rolling it all up, there’s a lot of ah-ha moments with people working together. That to me is one of the real strengths of the Thinking Processes. They’re just really good tools for helping think better together.” 

The Thinking Processes help to find answers to the key TOC questions:

What needs to be changed?

  • Current Reality Tree: The current reality tree describes how things are. You collect the UDEs of the problem, and then arrange them until your can detect the underlying or core problem. 

What should it be changed to?

  • Future Reality Tree: A future reality tree documents how things should be. It represents the current reality tree with new ideas, called injections, which create desirable effects or desirable effects (DEs).
  • Negative Branch Reservations: As you work on your future reality tree, someone may express concern about the outcome of the injections. A negative branch is a way to diagrammatically explores this concern. 
  • Evaporating Cloud Tree: An evaporating cloud tree explores all the conditions that must be in place for the injection to succeed. It may be used as a preliminary step to creating the future reality tree, to overcome objections to proposed injections, and has at its core the Theory of Constraint notion that organizations can always find a win-win solution to any problem. 
  • Strategy Tree and Tactics Tree: These trees help you diagram what must happen to create an improvement. Team members identify difficulties and explore paths through or around obstacles.

What Is Throughput Accounting?

Theory of Constraints accounting differs from traditional accounting in that it views accumulating inventory as a bad behavior, and cutting costs as less important than selling goods (again, throughput). Throughput accounting has three core aspects:

  • Throughput: All the money received from customers, minus raw materials. 
  • Inventory: Also called investment, this is money that is tied up in physical things: product inventory, machinery and equipment, and so on. Scrap is inventory until it is sold. Raw materials and products sitting in a warehouse include inventory, which is a liability, not an asset.
  • Operating Expense: Money spent to create throughput, or to turn inventory into throughput.

What Is a Drum Buffer Rope System?

Drum Buffer Rope (DBR) is a scheduling and planning tool. As a type of microcosm of constraints, it considers that any system has at least one limited resource. This limited resource controls the output for the entire system, and so it is the drum, setting the beat for delivery. Buffers of time protect the scarcity or drum from disruption. The rope ensures that all other resources are subordinated to the drum; in other words, timed and scheduled to support it.

Other Theory of Constraint Tools: Plant Types Analysis

Plant types describe how materials flow through a factory. In Theory of Constraints, this is called the VATI analysis, and can help with scheduling problems. Draw the diagram from the bottom of your page to the top of your page. 

  • V Plant (One to Many): One material can become many things, a flow of one-to-many. Examples include parts that become radios or milk that becomes ice cream, cheddar cheese, and sour cream. One process may rob resources from another process. After processing begins, it can’t move back through the line to feed another process.
  • A Plant (Many to One): This is the true assembly line, where different material or components converge to build one product. Feeding lines must then be timed properly, so the final product has enough materials. 
  • T Plant (Multiple Lines or Many to Many): One general material flow can split to make many different products. T Plant is true of many manufactured parts, including computers with customizations, such as different colored cases and different speeds of CD/DVD players. Poor synchronization and the robbing difficulties (as one line takes materials from another) can plague T Plants. 
  • I Plant (Flows in a Sequence): Workflows, as in an assembly line, with steps in sequence. Work moves from one step to the next (one to one). The main constraint is the slowest step. An example of workflow might be a fine-jewelry workshop. Rings are formed, soldered, set with a stone, burnished, and polished.

TOC VATI

Theory of Constraints Versus Lean

Practitioners generally consider that a toolbox of varied tools is the most useful. TOC focuses on working with constraints and pushing past them, which leads to greater production,and thereby, greater revenue. By contrast, Lean focuses on eliminating waste, which leads to cost savings. Nave also sees Lean as focusing more on improving flow, and on making small changes in the immediate. “If your organization values a systems approach where total participation is not desired … then TOC might be a good way to start.”

Theory of Constraints Examples

How do you apply TOC methodology to a real situation? Here are Michael Clingan’s manufacturing and healthcare examples of the Five Focusing Steps used to help real businesses improve their performance. 

Manufacturing - An aerospace and medical device supplier was losing business.

  • Identify: Customers started buying elsewhere because devices were failing.
  • Exploit: Company improved product testing and offered better technical support to customers.
  • Subordinate: The company used internal resources to create new sub-assemblies (parts made separately to be included in a larger part) to make things easier for customers. 
  • Elevate: Company maintained stocks to fill orders quickly, and provided a lifetime product warranty. They also hired a new salesperson for the new product line.
  • Avoid Inertia: As a result, profits doubled, and sales increased 68 percent over three years. The company then incorporated new sub-assemblies into other products. 

Healthcare - A behavioral health facility had a 15-day intake cycle and a 42 percent dropout rate. 

  • Identify: Initially identified the constraint as the intake coordinator. After walking the intake process (Gemba walk from Lean), the constraint appeared as clinician scheduling. The intake coordinator was merely trying to cover for this, for example, by finding other resources.
  • Exploit: Improved clinician effectiveness with voice recognition for note entry, and improved calendaring.  
  • Subordinate: Created a simple escalation system to use clinicians from other parts of the organization (at bat, on deck, ready, modified from the Drum Buffer Rope tool in Theory of Constraints).
  • Elevate: Reduced intake to an hour and eliminated separate appointments. No extra investment was required.
  • Avoid Inertia: The intake coordinator had now become the constraint. The exploit included iPad data capture; subordination, the use of reception resources; and elevation, the hiring of an intake coordinator and a treatment coordinator.

Banking scenario offered by Clingan: “Customer engagement directly drives bank revenues. Engaged customers have three or more products and generate 37 percent higher revenues. Retention is also directly related to the number of products a customer has.”

  • Identify: Tellers have the most opportunities to interact with customers, but must handle translations as quickly as possible.
  • Exploit: The tellers received training in how to handle service issues and sales opportunities.
  • Subordinate: Ensured that other staff could assume teller duties, and that the exchange with loan officers and others was a smooth experience for customers.
  • Elevate: None necessary.
  • Avoid Inertia: A new product became a constraint because the sales training at the exploit stage generated more sales than any other branch of the company. 

What Are the Criticisms of Theory of Constraints?

As with any methodology, TOC has its critics. Some complain that TOC offers nothing that couldn’t be extracted from other 20th century methodologies, such as PERT and critical path . In fact, Goldratt dealt specifically with PERT and critical path method in his 1990 business novel, Critical Chain . In it, he posed the question of how, with so many safety buffers built into schedules, PERT and critical path projects still overshot completion dates. His answer: too many buffers caused student syndrome , where people procrastinated because they knew the schedule allowed it. As Graham K. Rand states in an article in the International Journal of Project Management, “In contrast to PERT/critical path method, which may be characterised as dealing solely with certain technical aspects of project management, the application of theory of constraints focuses very much with how senior management deal with human behavior.” 

Clingan also notes that since Goldratt created TOC in 1984, a substantial body of knowledge has accumulated, and hundreds of books have been written on it, sometimes with over a thousand pages detailing just one tool or aspect of the theory. That can make it seem inaccessible. “It started so simple and now there’s so much attached to it.”

“I think TOC is a framing tool,” says Clingan. “In a nutshell, sometimes TOC, like other methodologies, is dogmatic about its approach. I think TOC works best when it’s very flexible and says how do we get the best results as soon as we can.”

Theory of Constraints Training and Certification

There are many available paths to proficiency in Theory of Constraints. Some people, such as Michael Clingan, start with self-training, simply by reading The Goal . Often individuals pursue further training after a private consulting firm has taught the methodology in their workplace. 

In addition, formal training is offered through worldwide outlets of the Goldratt Institute. At the Institute, practitioners train to become Jonahs , after the mentor in the novel. Advanced practitioners are called Jonah’s Jonahs . 

In the early Millennium, Goldratt brought together leading TOC practitioners to create the Theory of Constraints International Certification Organization (TOCICO). Certification involves testing in fundamentals, with supervision of methods and results used in practical projects.  

Chuck Werner believes that you should acquire TOC training and certification with a knowledge of Lean tools. “When we say subordinate a bottleneck , how do you do that? How do you balance a line? They say the first step in solving a problem is to recognize that you have one. But if you don’t know what to do about it, all you are is someone who’s frustrated and knows they have a problem.” 

Werner also adds that line supervisors who oversee the actual work require TOC training. Problems start at the operator level, but supervisors must recognize when a problem starts to build. “They need to react when it’s still a little pile of stuff and not when it’s a giant pile of stuff, and nothing’s coming out at the end of the line and the customer’s on the phone angry.”

Although TOC may have been more widely discussed in the 1990s, it still carries weight. Clingan says he receives positive comments when people see it on his resume. In fact, in 2011, Time Magazine cited The Goal as one of the 25 most influential business management books . Even Amazon founder Jeff Bezos leads senior executives in reading the book . 

Clingan suggest that viewing the Goldratt website materials and taking classes through private trainers is an excellent start to learning TOC. “I think that the best thing I can say is to jump in,” he says. “Buy The Goal , read it, and actually start applying it. Walk through the organization and try to identify the constraints. Walk through with other people and try to look at it from a client’s or customer’s perspective and try to identify the constraint or bottleneck area that’s preventing you from doing more for your customers.”

Theory of Constraints Resources

Eliyahu Goldratt was a prolific writer and speaker. Three of his books are listed here; in addition, you can find videos of his speeches on YouTube. The Goal What is This Thing Called the Theory of Constraints? Critical Chain  

Resource by Other Authors Theory of Constraints Handbook ABC’s and 123’s of Process Improvement - coming soon

Why Smartsheet Is a Useful Tool for Practicing Theory of Constraints

Empower your people to go above and beyond with a flexible platform designed to match the needs of your team — and adapt as those needs change. 

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. 

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

Discover why over 90% of Fortune 100 companies trust Smartsheet to get work done.

Strategic Management Insight

Theory of Constraints (TOC)

Theory of constraints

What is the Theory of Constraints

Theory of Constraints (TOC) , a process improvement approach that aims to improve the performance and profitability of any system by identifying and eliminating the “constraint” that limits its output, throughput, and goal achievement.

Dr Eliyahu Goldratt [1] , an Israeli physicist turned management guru, conceived the Theory of Constraints and introduced it through his bestselling 1984 novel, “The Goal”. [2] Since then, TOC has continued to evolve and develop and is today a well-known management best practice.

Why use Theory of Constraints

An independent study on the application of the Theory of Constraints (TOC) in various companies yielded the below findings: [3]

Why use Theory of Constraints

Over the years, the principles of TOC have proven instrumental in enabling organizations to achieve profitability through enhanced performance, strategic market positioning, robust financials, proactive problem-solving (rather than firefighting), improved customer service, prevention of conflicts and more.

TOC principles have been used in a wide range of industries and domains from manufacturing to software development to project management to healthcare.

The Goal in Theory of Constraints

To identify constraints in any system, it is important to define what an organization intends to achieve. This raises the question – what is the goal of an organization?

According to TOC, the one and only goal of any for-profit organization is to make money.

In a plethora of conflicting objectives and operational targets, the relationship between actions taken on the ground versus the money it generates for the organization is often lost or is vague at best. Hundreds of key performance indicators (KPIs) make it difficult for organizations to focus on what is important.

TOC addresses this problem by defining the Goal in terms of just three key measurements – Throughput, Inventory and Operational expense.

The goal of an organization is to increase throughput while simultaneously reducing both inventory and operating expenses .

TOC goal

By evaluating an organization’s objective through the Theory of Constraints (TOC) framework, clarity arises as to whether it contributes to the organization’s overarching goal of generating profits.

Everything within an organization fits within the three parameters – Throughput, Inventory and Operational Expense.

For example, a decision to install a machine will lead to higher depreciation costs, which is an operational expense. The current value of that machine is inventory. If the machine improves throughput over and above the burden on inventory and expense, it contributes to the organization’s overall goal.

Similarly, if an organization’s (or a department’s) objective is to improve productivity, any action that moves it towards making money is productive and an action that takes it away from making money is non-productive.

Constraint in Theory of Constraints

A constraint is what “limits a system from achieving higher performance versus its goal”.

For any organization, throughput measures the flow of goods and services to market and a constraint is that which limits the maximum possible flow. In other words, the constraint is what, if the organization had just a little more, would generate higher Throughput.

When driving continuous improvement, organizations are tempted to try to improve everything at once, but it rarely leads to sustained improvement in the overall performance of the organization. This is because not all improvements are created equal. Only a few improvements/changes impact the constraint and improve throughput while most do not. This seemingly minor distinction makes all the difference.

Example of a Constraint

To demonstrate this concept, consider an automobile manufacturing company whose manufacturing process consists of 5 stage, as depicted in the figure below:

Example of a Constraint

The five stages are – frame manufacturing, engine installation, parts assembly, painting, and shipping. Maximum capacities per day are indicated under each activity.

It can be seen from the figure that the paint shop has the lowest capacity of 75 cars per day. Going by the definition of constraint, this is the current limiting factor for the maximum number of cars that the company can produce.

Suppose the engine installation department decides to invest $15,000 in a new robotic arm that improves the capacity by an additional 25 cars per day. As seen from the figure above, the engine installation capacity would increase from the current 125 per day to 150 per day.

Would this change the throughput?

Unfortunately, this would have no impact on the painting process and hence, the throughput would remain unchanged. Such a move would not benefit the company.

Suppose that the company decides to install an additional Painting bay to double the capacity from 75 per day to 150 per day. With this, the constraint will shift to engine installation. With this, the company can manufacture 125 cars instead of 75 cars.

New constraint

Investing in that robotic arm will now improve throughput. But there is a catch. Notice how the next constraint in the system becomes the parts assembly that limits the production to 135 per day.

The benefit of increased engine capacity will be realized to the extent of an additional 10 cars per day before the constraint shifts to the Parts Assembly which then limits the throughput to 135 cars per day.

In most systems, there is one constraint at a time that limits it from advancing towards its Goal. The central message of TOC is to identify and address such constraints one at a time to improve throughput.

And any improvement in throughput takes the company that much closer to its Goal.

Constraint vs. Bottleneck

A bottleneck is a resource whose capacity is less than or equal to the demand while a constraint is a limiting factor to an organization’s performance. It is the current obstacle to the organization achieving its goal.

A constraint can be called a bottleneck, but a bottleneck is not always a constraint.

Consider the example of the automobile manufacturing company above. Having upgraded the paint and assuming a market demand of 140 cars per day, the constraints and bottlenecks for the company will be as below: [4]

Notice how the parts assembly process is not currently a constraint but still a bottleneck. If the engine bay can produce more than 135 cars, the constraint will shift to the next bottleneck, i.e. Parts assembly.

Alternatively, if the market demand itself would be 130 cars per day (instead of 140), then the Engine bay would be the only constraint as well as the bottleneck.

Can there be Multiple Constraints?

In real-world scenarios, processes are far more complicated and involve thousands of sequential as well as non-sequential sub-processes that come together to form the final product (or service).

Such systems could sometimes have more than one constraint but in most cases, current constraints are only a handful.

It is important to note that Every independent path of flow will have its own constraint , but the system (as a whole) will still have one (or two) constraint(s) as the limiting factor to the overall flow.

TOC encourages focusing on one or two constraints at a time and exploiting them to improve throughput.

Types of Constraints

Constraints can be both internal and external to the organization.

They can also be classified as Equipment-based (where the way equipment is used limits the system’s ability), People-based (lack of skills or wrong knowledge and beliefs), and Policy-based (written or unwritten policies that prevent the system from making more).

Examples of some of the constraints are as below:

Capacity Constraint (internal) : This is when the current ability to deliver is less than the market demand for those products or services.

Like in the example above, a company in this situation typically has a backlog of sales orders, low delivery performance, and/or stockouts. By the principle of TOC, the real test of an internal capacity constraint is very high utilization of at least one internal resource (95%+).

Cash Constraint (internal) : This is when a company’s ability to source inputs is less than market demand due to the inability to pay suppliers. This situation can also be triggered when suppliers blacklist an organization due to late payments and/or disputes may have been taken to court.

Suppliers typically expect upfront payments in such cases and a small increase in cash usually can increase sales, throughput, on-time delivery and available cash in a relatively short amount of time.

Regulations and Standards (internal/external) : Regulations and standards can limit a system’s time and level of use. These can be quotas, schedules, or mandatory. For example, reducing the speed of a machine between 22:00 hrs. to 06:00 hrs. to control noise levels.

Demand Constraint (external) : This is where the market demand at current prices is less than the rate at which a company could produce the product or service.

When a company begins eliminating its internal constraints, they shift and eventually, the supply outnumbers the orders that the company could secure. In such a situation, all backlog orders are fulfilled, and production is limited by the number of orders.

Though this is an external constraint, it can be addressed through focused marketing efforts or providing bulk discounts if the economics works out.

Market Constraint (external) : this is where a company captures the bulk of the market and runs out of further space to grow.

For example, Google Search occupies almost 90% of the search engine market share and has limited potential to increase its user base significantly. Unless the market itself expands, there is little chance that it could double its user base in a short span as it did very easily in its growth years.

Supply Constraint (external) : This is when a company is unable to meet all its demand due to shortages in input materials/services. For example, chip shortages triggered during the pandemic impacted almost every company in the automobile and electronics sector. [3]

Dependent Events, Statistical Fluctuations & the Origin of Constraints

A balanced plant is an ideal system where the capacity of all resources is trimmed to exactly match the market demand. In such a system, every resource works to its full capacity and is optimally utilized. There are no constraints in such a system, which operates at peak efficiency with zero wastage.

The only problem is that such a plant does not exist.

Two factors make it difficult to achieve such a balance. Dependent Events and Statistical Fluctuations .

In any plant process, an event, or a series of events, must take place before another can begin. The subsequent event depends upon the ones before it. This is called a dependent event.

Likewise, in these processes, some types of information can be determined precisely while others cannot. These types of information vary from one instance to the next and are subject to statistical fluctuations.

For example, it’s possible to predict whether a computer-controlled robot will complete an assembly in precisely 56 seconds, but it is not possible to predict if a truck will arrive at the loading bay precisely at 9:15 AM.

When companies operate complex processes with thousands of variables, most of the factors critical to running them successfully cannot be determined precisely ahead of time. When a fluctuation occurs in one of the sub-processes, a constraint is created.

The Five Focusing Steps of Theory of Constraints

The Theory of Constraints proposes a five-step process to improve efficiency and achieve higher throughput. While originally applied to the manufacturing process, these steps today are used in a wide range of industries, from production to finance to healthcare. They are depicted in the figure below:

Five Focusing Steps of Theory of Constraints

Step 1: Identify the constraint

In any system, a constraint always exists, or else production would be infinite. Identifying a constraint begins with the research of the bottlenecks – the weak links in the system.

Production bottlenecks are generally known and easy to identify. If not, a good way to find would be to spot signs of inventory pileup upstream where parts wait to get processed. Similarly downstream, resources are under-utilized as they wait for parts to arrive through the constraint.

Non-production bottlenecks are a bit tricky to locate. They could range from bad planning to poor skills to an engineering practice that is followed but not actually needed etc. These can be identified using the TOC thinking processes discussed later in this article.

Step 2: Exploit the constraint

To exploit a system’s constraint is to make sure the constraint is fully utilized. This step aims to identify the factors that negatively impact the constraint’s workflow and eliminate/mitigate their impact.

Exploit the constraint

The figure above shows typical losses for a production line resource. If this resource were to be a constraint, then exploiting the resource, in this case, would mean:

  • Adjusting the schedule for a 24-hour operation.
  • Minimizing downtime through preventive maintenance, maintaining a buffer stock of spare and tools, and scheduling maintenance during changeover/loading.
  • Optimizing the machine’s performance to operate close to its maximum capacity, including determining the optimal batch size and appropriate loading techniques.
  • Implementing rigorous quality control measures to identify errors in input materials, with a focus on upstream quality control rather than downstream.

In this step, any potential inefficiencies related to uptime and productivity must be eliminated as they directly impact the company’s overall productivity.

On the contrary, if the resource is not a constraint, the principles of the TOC suggest a different approach. In such cases, it is advisable to allow the resource to remain idle or underutilized which brings us to Step 3.

Step 3: Subordinate everything else to the Constraint

A constraint cannot be exploited (Step 2) in insolation as processes operate in “chains”. Any changes made to a constraint located mid-process will have an impact on the previous as well as the subsequent processes.

Such impact could be in the form of slowing down/speeding up downstream processes, producing more at some stations while less at another, or making changes to the number of intermediate parts which are buffer inventory.

Often, this can mean higher costs/time in operating some of the non-constraint processes. To subordinate a constraint implies making such modifications despite them appearing suboptimal at a local level.

The idea is to avoid local optimization and focus on constraint optimization.

TOC provides an effective tool to manage this process called the Drum-Buffer-Rope (DBR) .

DBR originated in Goldratt’s first book “The Goal” [2] , but got its name later in his book “The Race”. [5]

DBR is a constraint-aware workflow control process in which the “drum” beat sets the pace of production based on the constraint’s capacity, the “buffer” provides a contingency, and the “rope” controls the flow of work.

DBR in a Manufacturing Process

In the manufacturing example (figure above), the drum is the bottleneck, i.e. Station-3 which has the lowest capacity of 75 parts/day. This also governs the system’s throughput.

The buffer is the material upstream of the constraint, which is to make sure the drum is never starved. This is to address any fluctuations in previous stations.

The rope is a signal or information from the buffer to the beginning of the line (Station-1). If the drum processes parts, the parts in the buffer move forward. The rope then sends information to replenish another part at the beginning of the line.

Notice how stations 1 & 2, which have capacities higher than the constraint, will be under-utilized. The central idea of Step-3 (subordinating everything else) is to let this happen as it does not impact the throughput.

If stations 1 & 2 were allowed to run at full capacity, the corresponding accumulation of inventory (before station 3) would increase expenses without improving throughout – a move that would take the process away from its Goal.

Step 4: Elevate the Constraint

In this step, more substantive changes are implemented to break the constraint. These steps might involve a significant investment of time and/or money.

The key action in this step is to weigh the impact of additional investments like bringing in a new resource or major process modifications using the throughput accounting metrics (throughput / inventory / operational expense) and implement them to improve the throughput.

Step 5: Find the next constraint (Back to step 1)

When constraints are elevated (Step-4), they cease to be bottlenecks, allowing attention to shift toward the next limiting factor in the process – the new Constraint.

This necessitates a return to Step-1 until the new constraint is optimized. Eventually, the constraint may shift towards external factors such as market demand. In such cases, the company can address this by concentrating on cost-reduction strategies to enhance competitiveness or by intensifying marketing efforts.

This is the TOC’s ongoing process for continuous improvement.

The Theory of Constraints Thinking Process

TOC applies the cause-and-effect thinking processes used in the hard sciences to understand and improve organizations. The process is analogous to a clinician treating a patient as follows:

Problem Diagnosis -> Designing a Treatment Plan -> Executing the Treatment Plan

In the language of organization problem-solving, the process is described via the use of three questions:

What to Change?

What to change to, how to cause the change.

TOC also provides six logical steps that are embedded into these questions and aid in effective organizational problem-solving as discussed below: [3]

From a list of observable symptoms, cause-and-effect is used to identify the underlying common cause, the core problem, for all the symptoms.

In organizations, the core problem is inevitably an unresolved conflict that keeps the organization trapped and/or distracted in a constant tug-of-war (management versus market, short-term versus long-term, centralize versus decentralize, process versus results). This conflict is called a Core Conflict.

Due to the destructive impact of Core Conflicts, organizations often devise policies, measures, and behaviors to mitigate their adverse effects. When addressing the Core Conflict, these approaches must be eliminated, altered, or substituted.

The process involves two steps:

Step 1 : Identify the Core Conflict causing the symptoms, or UnDesireable Effects (UDEs), of the chosen subject.

Step 2 : Build a Current Reality Tree (CRT) [8] that validates the identification of the Core Conflict. This helps understand the existing cause-and-effect relationships of the subject and identifies the conspiring formal and informal policies, measurements and behaviors that support the existence of the UDEs.

Current Reality Tree

By challenging the logical assumptions behind the Core Conflict, a solution to the Core Conflict is identified in this step.

Step 3 : An Evaporating Cloud (EC) [9] (Also called Core Conflict Cloud) must be constructed to articulate the core conflict clearly. This helps surface hidden assumptions so that some of them can be invalidated.

Evaporating Cloud

This is only the starting point for the development of a complete solution – a strategy for resolving all the initial symptoms and many others, once and for all.

The strategy must also include the changes that must be made alongside the solution to the Core Conflict to ensure that the solution works and that the organization is restored to its “best possible health.”

These often involve changes to the policies, measurements, and behaviors identified in “What to Change?”, as well as the organization’s strategic objectives.

The strategy is not complete until all potential negative side-effects of the strategy have been identified and the means for preventing or mitigating them become key elements of the strategy.

Step 4: Construct a Future Reality Tree (FRT) [10] that lays out the complete solution/strategy that:

  • Resolves all the UDEs
  • Ensures alignment with the Strategic Objectives (SO)
  • Ensures that no new negative side effects (Negative Branches) will occur
  • Identifies what changes in the culture of the system and/or sub-system must be made to ensure the symptoms are resolved
  • Leverages the existing TOC applications needed to make the solution/ strategy work
  • Quantifies the “bottom line” value of achieving those desired effects and SOs

FRT maps the full implications of the proposed injections (actions that solve the conflict) to ensure that they are sufficient to solve every UDE.

Considering the unique culture within organizations, a transition plan is developed in this step. This helps move the organization towards strategy realization.

This plan must specify necessary actions, responsible parties, and timelines and must chart the overall course for getting from the Current Reality to the Future Reality.

Step 5 : Construct a PreRequisite Tree (PRT) [11]

Details of what each part of the system/sub-system must contribute and when to achieve each of the milestones must be mapped using a PRT.

A PRT takes the complete set of injections (solution elements) from the FRT and sets them as its “objectives.” It then breaks these objectives down into an ordered sequence of intermediate objectives (key milestones) for execution.

generic PreRequisite Tree

Step 6 : The last step is to create a detailed task interdependency diagram using Transition Trees (TRTs). A Transition Tree is a step-by-step sequential depiction of how to implement the change. TRTs combine an entity of current reality, a statement of need and an action (injection) to create a new reality (expected effect).

Generic Transition Tree

Thus, the three questions—What to Change? What to Change To? and How to Cause the Change?—alongside the Six steps, together form the framework known as the TOC Thinking Process.

Six Layers of Resistance to Change

Building active consensus, collaboration and buy-in is crucial for the success of a plan.

To address this, TOC has developed a process based on the psychology of change that acknowledges and systematically addresses the questions people intuitively ask when evaluating a change.

Six Layers of Resistance to Change

If these questions aren’t answered frankly and effectively (with both the people who must implement and those who will be affected by the change), there will be no buy-in and support. Like most changes, no matter how great the idea or tremendous the value, the strategy and tactics are bound to fail.

The Nine Rules of Theory of Constraint

Before developing the Theory of Constraint, Goldratt, along with other Israeli researchers worked on a theory called Optimized Production Technology (OPT). Developed in the 1970s, OPT is a production management methodology that helps organizations achieve greater profitability and less waste. [7]

TOC has been shaped by the nine rules of OPT that are essential to adapt the TOC mindset. They are:

1. Balance flow, not capacity

By balancing the flow of the products with the market demand, constraints can be eliminated while avoiding excess capacity.

2. An hour lost at a bottleneck is an hour lost for the total system

A bottleneck with no reserve capacity (constraint) governs the system’s throughput. Any loss here is critical and irreversible.

3. An hour saved at a non-bottleneck is just a mirage

The flow remains dependent on the bottleneck. An hour earned on a non-bottleneck does not benefit the system’s throughput but will only increase the inventory.

4. The level of utilization of a non-bottleneck is determined not by its own potential but by some other constraint in the system

By applying the principle of the DBR, non-bottleneck resources must be controlled by the bottleneck. Using non-bottlenecks according to their capacity would only produce excess inventory.

5. Utilization and activation of a resource are not the same

“Utilizing’’ a resource means making use of the resource in a way that moves the system toward the goal. “Activating’’ a resource is like pressing the ON switch of a machine; it runs whether or not there is any benefit to be derived from the work it’s doing.

6. Bottlenecks govern both the throughput and inventory in the system

The overall throughput of the system cannot exceed the amount of the constraint. The blind activation of upstream resources can quickly inflate inventories.

7. The transfer batch may not and often should not be equal to the process batch

The transfer batch, which refers to the number of items moved between process stages, is typically not required to be the same as the process batch size. They can differ due to various factors and considerations to optimize the overall efficiency and effectiveness of the system.

8. The process batch should be variable, not fixed

The process batch, referring to the number of items processed together, should ideally be flexible and adaptable rather than rigidly fixed. This variability allows for better responsiveness to changing conditions, improved efficiency, and optimization of resources based on the specific requirements and constraints of the system.

9. Capacity and priority should be considered simultaneously, not sequentially

By considering them simultaneously, decision-makers can optimize resource allocation based on both the available capacity and the relative importance or urgency of tasks, leading to more effective and efficient utilization of resources within the system.

Throughput Accounting and True Cost of a Constraint

TOC’s Throughput Accounting is an alternative accounting methodology that attempts to eliminate harmful distortions introduced by traditional accounting practices – distortions that promote behaviors contrary to the goal of increasing profit in the long term.

Inventory: traditional accounting treats inventory as an asset, assuming it can be sold for cash. This can lead to producing unnecessary items which inflate assets and generate “paper profit” based on unsellable inventory that also incurs storage costs.

In contrast, the Theory of Constraints views inventory as a liability, as it ties up cash that could be better utilized elsewhere.

Expense: traditional accounting prioritizes expense reduction, while the Theory of Constraints values increasing throughput over cutting expenses. Expense reduction is limited by reaching zero expenses, whereas increasing throughput has no such limitations.

When eliminating constraints, companies encounter situations where expensive or less efficient alternatives could increase throughput. But in such cases, decisions are driven by isolated cost considerations or local optima rather than throughput. This could be counterproductive.

Consider the example in the figure below that illustrates a chain installation bay involving two machines. Assume that the bay is a constraint in the factory. The chain can be installed either by utilizing a cost-effective and efficient machine (Machine-1) only or by also simultaneously utilizing a more expensive and slower machine (Machine-2).

As the process is a constraint, there is a queue of bulldozers (inventory) waiting to complete this process.

Chain installation

An assembly of a bulldozer where the chain installation process is a constraint

If one looks at the process in isolation, it becomes clear that Machine-2 is both expensive to run and slow, thereby it is ideal to process the load on Machine-1. If the installation bay manager were to make a decision, he/she might choose to reduce costs by using only Machine-1 (cost control is an important KPI for individuals and departments).

It is only when the situation is analyzed using the principles of TOC, the true cost emerges.

Scenario 1: Using only the fast and efficient machine:

Scenario 2: Augment capacity using the slower and less efficient machine:

In the second scenario, the company can ship five additional bulldozers per day making an additional revenue of $500,000 and a profit of $50,000 by spending $ 10,000. This takes the company closer to its Goal vs the first scenario of running a single machine.

While unit economics drive decisions in most companies, the goal-optimized process flow in TOC demonstrates how constraint elimination can have a huge impact on the Revenue and Profitability of a company.

In Conclusion, the Theory of Constraints is a powerful management philosophy that helps organizations achieve their goals by focusing on the most critical factor that limits their performance.

It provides a set of tools and methods for identifying and eliminating constraints, analyzing, and resolving problems, measuring, and improving performance, and developing and communicating strategies.

While TOC has helped organizations improve productivity, quality, customer satisfaction, profitability and more, its principles can be equally beneficial when applied to individual problem-solving endeavors.

1. “Eliyahu M Goldratt”. Wikipedia, https://en.wikipedia.org/wiki/Eliyahu_M._Goldratt . Accessed 21 Jun 2023

2. “The Goal”. Wikipedia, https://en.wikipedia.org/wiki/The_Goal_(novel) . Accessed 21 Jun 2023

3. “The Theory of Constraints and its Thinking Processes”. Everydaykanban, https://www.everydaykanban.com/wp-content/uploads/2013/05/the_theory_of_constraints_and_its_thinking_processes.pdf . Accessed 23 Jun 2023

4. “Constraint vs. bottleneck”. CHRIS HOHMANN, https://hohmannchris.wordpress.com/2014/05/06/constraint-vs-bottleneck/ . Accessed 22 Jun 2023

5. “Shortage of Legacy Chips Keeping Ford CEO Up at Night”. Bloomberg, https://www.bloomberg.com/news/articles/2022-11-18/shortage-of-legacy-chips-keeping-ford-ceo-up-at-night . Accessed 22 Jun 2023

6. “The Race”. ISBN, https://isbnsearch.org/isbn/9780884270621 . Accessed 23 Jun 2023

7. “A Critical Look at Goldratt’s Drum-Buffer-Rope Method”. Christoph Roser (Allaboutlean.com), https://www.allaboutlean.com/drum-buffer-rope/ . Accessed 23 Jun 2023

8. “Current reality tree (theory of constraints)”. Wikipedia, https://en.wikipedia.org/wiki/Current_reality_tree_(theory_of_constraints) . Accessed 23 Jun 2023

9. “Evaporating Cloud”. Wikipedia, https://en.wikipedia.org/wiki/Evaporating_Cloud . Accessed 24 Jun 2023

10. “What is Future Reality Tree?”. visual-paradigm.com, https://online.visual-paradigm.com/knowledge/problem-solving/what-is-future-reality-tree/ . Accessed 23 Jun 2023

11. “Prerequisite Tree (PRT)”. Tocinstitute.org, https://www.tocinstitute.org/prerequisite-tree.html . Accessed 24 Jun 2023

12. “Thinking Processes – Transition Tree”. CHRIS HOHMANN, https://hohmannchris.wordpress.com/2015/07/13/thinking-processes-transition-tree/ . Accessed 24 Jun 2023

13. “Learn how OPT acts in process optimization by identifying production bottlenecks”. Thinkleansixsigma, https://www.thinkleansixsigma.com/article/opt-what-is-and-how-it-works . Accessed 23 Jun 2023

Leave a Comment Cancel reply

Save my name and email in this browser for the next time I comment.

To read this content please select one of the options below:

Please note you do not have access to teaching notes, using the theory of constraints to improve competitiveness: an airline case study.

Competitiveness Review

ISSN : 1059-5422

Article publication date: 1 March 2006

The aim of the discipline of Operations Management is to gain competitive advantage. One more recent and lesser‐known Operations Management technique that is finding greater acceptance is the Theory of Constraints (TOC). This paper illustrates the use of a specific TOC technique termed “The Thinking Processes” to solve an airline industry case toward improved competitive outcomes.

  • Organizational theory
  • Competitive strategy
  • Operations management
  • Competitive advantage

Polito, T. , Watson, K. and Vokurka, R.J. (2006), "Using the theory of constraints to improve competitiveness: an airline case study", Competitiveness Review , Vol. 16 No. 1, pp. 44-50. https://doi.org/10.1108/cr.2006.16.1.44

Emerald Group Publishing Limited

Copyright © 2006, Emerald Group Publishing Limited

Related articles

We’re listening — tell us what you think, something didn’t work….

Report bugs here

All feedback is valuable

Please share your general feedback

Join us on our journey

Platform update page.

Visit emeraldpublishing.com/platformupdate to discover the latest news and updates

Questions & More Information

Answers to the most commonly asked questions here

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

  • We're Hiring!
  • Help Center

paper cover thumbnail

The Application of Theory of Constraints in Industry: A Case Study

Profile image of CHIRANJIB BHOWMIK

The aim of this paper is to implement TOC in forging area in which the constraints prevents the throughput of the system to enhance the quality and reduce errors. Many quality improvement (QI) approaches have a limited evaluation of the factors in the selection of QI projects. Theory of constraints (TOC) has been proposed as a remedy for the better selection of QI projects. The strategic Thinking Processes (TP) of Theory of constraints is designed to struggle an enormous problem faced by organizations. The paper proposes an improvement of TOC–based TP in one of the leading forging industry in India to identify and overcome the system constraints in the business. The result shows that the TOC-TP identifies the production constraints and suggests measures to improve the system. The research is applicable to any production house in which product quality reduces the throughput of the organization. This is the first time that the theory of constraints philosophy has been used to maximize...

Related Papers

Review of Administration and Innovation - RAI

Hamilton Pozo

case study theory of constraints

Alexander Decker

Niek Du Preez

Erkam Guresen

Theory of constraints (TOC) is a technique that produces solutions for every kind of bottleneck in a short time. The philosophy of the theory is to determine the weaker part of the process chain and to eliminate this constraint point by taking action. After improvement, the next weaker part of the process chain is determined, and so on, for continuous improvement. The main goal is to apply improvement actions continuously to reach an excellent system structure. This paper describes how the five main steps of the theory of constraints were applied to eliminate waste at a supplier firm in Turkey..

Priyank Vartak

A toggle clamp manufacturer company struggling to keep pace with this increasing competition with a fear to lose the future orders because of their larger delivery time was selected for this study. This research is primarily focused on improving on time deliveries, productivity as well as reducing lead time and inventory levels by implementing five step methodology of Theory of Constraint Philosophy. In order to improve the delivery time, the five steps methodology of Theory of Constrained philosophy provides a better option as it aims at improving the productivity by focusing only at a bottlenecks rather than focusing on an entire process. For this purpose, manual method is used along with critical path analysis and value stream map for identifying the bottleneck resources which causes the problem of larger delivery time. The local optimization techniques are used to eliminate identified bottleneck and thus reducing the delivery time by reducing production lead time. Comparison of ...

Aitor Lizarralde

Purpose: The theory of constraints (TOC) drum-buffer-rope methodology is appropriate when managing a production plant in complex environments, such as make-to-order (MTO) scenarios. However, some difficulties have been detected in implementing this methodology in such changing environments. This case study analyses a MTO company to identify the key factors that influence the execution of the third step of TOC. It also aims to evaluate in more depth the research started by Lizarralde et al. (2020) and compare the results with the existing literature. Design/methodology/approach: The case study approach is selected as a research methodology because of the need to investigate a current phenomenon in a real environment. Findings: In the case study analysed, the protective capacity of non-bottleneck resources is found to the key factor when subordinating the MTO system to a bottleneck (BN). Furthermore, it coincides with one of the two key factors defined by the literature, namely protec...

Total Quality Management & Business …

Hilma Raimona Zadry

IJESRT Journal

Theory of constraints (TOC) is about thinking in logical and systematic way similar to the Plan do check act (PDCA) learning loop. It is not only about analyzing the causes and effect but also verifying basic assumptions, exploring alternatives and process improvement. The goal of TOC is to maximize the efficiency, profitability, quality of work. This paper includes basic theoretical information about TOC. It basically helps in problem solving & implementing the solution for the same. TOC is majorly applied in manufacturing sector, including distribution, marketing, project management, and accounting. In short, any situation involving change to a system TOC is applied

Total Quality Management & Business Excellence

SHA'RI BIN MOHD YUSOF UTM RAZAK SCHOO

RELATED PAPERS

European Educational Research Journal

Gerardo Echeita

Carnets de géologie (Notebooks on geology)

BENKHEDDA Abdelhakim

XV International Conference on Durability of Building Materials and Components. eBook of Proceedings

Chetan Aggarwal

The Japan Society of Applied Physics

Tetsuo Hatakeyama

Frattura ed Integrità Strutturale

Bouchouicha Benattou

Climate Change Management

Samuel Darkwah

Journal of Physics: Condensed Matter

Arvind Maurya

Brazilian Journal of Development

Elaine Almeida

Discrete Applied Mathematics

Karell Bertet

International Journal of Environmental Research and Public Health

Clinical Cancer Research

Dafydd Thomas

BMC Primary Care

Allan Krasnik

Journal of the Mexican chemical society

Rafael Ortiz-Alvarado

JURNAL BIMBINGAN DAN KONSELING AR-RAHMAN

Maria Antonietta Ragusa

Shahjada Selim

Quién: revista de filosofía personalista

James Beauregard

Infection Control & Hospital Epidemiology

michael Omondi

Journal of Craniofacial Surgery

Anna Avantaggiato

Revista Brasileira de Engenharia de Biossistemas

Heloiza Ferreira Alves do Prado

Chemie Ingenieur Technik

Rustem Valiullin

Theory and Applications of GIS

Wanglin Yan

Theology & Sexuality

Amina Selimovic

Veterinary Parasitology

Janice Liotta

Nature Communications

Francesco Meinardi

  •   We're Hiring!
  •   Help Center
  • Find new research papers in:
  • Health Sciences
  • Earth Sciences
  • Cognitive Science
  • Mathematics
  • Computer Science
  • Academia ©2024

Extraordinary Performance Improvement. Fast.

Extraordinary Performance Improvement. Fast.

Theory of Constraints Case Studies

Detailed case studies of our clients’ theory of constraints implementations, we always learn, from every implementation. it’s our internal version of continuous improvement..

So if you’re into performance improvement – and you wouldn’t be here if you weren’t – you might find some of our insights valuable.

Over time, we are documenting a range of implementations in the form of the problems a company was facing, the shape of their particular Theory of Constraints implementation, obstacles and issues arising in the implementation, the outcomes (warts and all), and what WE learned from the implementation.

We are of course careful not to reveal too much – both for purposes of confidentiality and because our clients don’t hire us just to implement systems, they hire us to help them kick their competitors’ rear ends. We do not want to give away blueprints of exactly what we did.

But there’s a LOT to be learned from the broader picture, and we can still get into some issues at a good level of detail.

For now, here’s a link to the details of our first-ever implementation . The report was co-written with the GM of the client for publication in a Furniture magazine, and I’ve edited it a little to keep the names out because it WAS a long time ago. However, some of the “players” are still around, and still available for comment, the last time I checked.

The article is 100% appropriate to today, incidentally. The only changes are, we can do much more for a client today than we could then – but what this company achieved just with the basic Synchronous Manufacturing application, as it existed almost 20 years ago, is outstanding.

But you be the judge. Visit the RTA Furniture Factory Case Study .

IMAGES

  1. Theory of Constraints- A Case study

    case study theory of constraints

  2. Theory Of Constraints Case Study

    case study theory of constraints

  3. Ultimate Guide to Theory of Constraints

    case study theory of constraints

  4. (PDF) Theory of constraints case study in the make to order environment

    case study theory of constraints

  5. Theory of constraints case study webinar

    case study theory of constraints

  6. (PDF) The Theory of Constraints: A case study as a strategic tooling in

    case study theory of constraints

VIDEO

  1. How to study theory subjects?📚#shorts

  2. Lesson Study: Theory, Aplication, and Future Research

  3. How To Study Theory Subject

  4. constraints

  5. Revamping Business Processes Using Theory of Constraints Tools

  6. When to study theory subjects? 🤔

COMMENTS

  1. TOC implementation in a medium-scale manufacturing system with diverse

    A case study method should be considered when a study is focused on answering the question of 'how' (Yin, Citation 2003). Among the many types of case studies, an instrumental one is employed in this study. According to Stake (Citation 1995), the instrumental case study provides insight into an issue or helps to refine a theory. It differs ...

  2. Outcomes of managing healthcare services using the Theory of

    Improving system performance: A case study in the application of the theory of constraints. Journal of Healthcare Management, 44 (5), 397-407. 10.1097/00115514-199909000-00013 [Google Scholar] World Health Organization . (2010). The world health report: Health systems financing: The path to universal coverage. World Health Organization.

  3. Using Goldratt's Theory Of Constraints For Digital ...

    Using Goldratt's Theory Of Constraints For Digital Transformation: A Case Study Vladimir Drogan Forbes Councils Member Forbes Business Council COUNCIL POST | Membership (fee-based)...

  4. Applying the TOC TP: a case study in the service sector

    An increasingly utilized framework for implementing the continuous improvement management philosophy is the Theory of Constraints (TOC). Although this systemic managerial approach was initially developed and applied in the manufacturing sector, its underlying philosophy has been expanded to address three basic questions: What to change?;

  5. Theory of Constraints Case Study in the Make-to-Order Environment

    Theory of Constraints Case Study in the Make-to-Order Environment. Journal of Industrial Engineering and Management, 14(1), 72-85. https://doi.org/10.3926/jiem.3283 1. Introduction

  6. Theory of Constraints: A Literature Review

    In literature there are too much researches, case studies, theses, and company implementations about TP. ... Reengineering using the theory of constraints- A case analysis of Moore Business Forms. Industrial Marketing Management, 25, 311-319. Tulasi L. and Rao A. R. (2012). Review on Theory of Constraints. International Journal of Advances in ...

  7. Revolutionizing supply chain management the theory of constraints way

    Revolutionizing supply chain management the theory of constraints way: a case study Kartik Modi , Harshal Lowalekar & N.M.K. Bhatta Pages 3335-3361 | Received 30 Jan 2018, Accepted 04 Sep 2018, Published online: 25 Sep 2018 Cite this article https://doi.org/10.1080/00207543.2018.1523579 Full Article Figures & data References Supplemental Citations

  8. Theory of Constraints (TOC)

    The Theory of Constraints is a methodology for identifying the most important limiting factor (i.e., constraint) that stands in the way of achieving a goal and then systematically improving that constraint until it is no longer the limiting factor. In manufacturing, the constraint is often referred to as a bottleneck.

  9. Ultimate Guide to Theory of Constraints

    What Is the Theory of Constraints? The Theory of Constraints is a management approach that considers that at any given time, an organization is limited from achieving its highest goal by a single constraint. The theory provides tools to help identify and break through the constraint. Industry experts help create a richer picture of what TOC offers:

  10. Using the theory of constraints to create a paradigm shift in

    CASE STUDY Using the theory of constraints to create a paradigm shift in organisation performance at a large primary care provider practice James F. Cox III ... theory of constraints (TOC) offers the capability of rapidly improving healthcare planning and delivery. Action research (Susman & Evered, 1978), a qualitative research methodology is ...

  11. (PDF) Application of the Theory of Constraints for Continuous

    Theory of Constraints. Studies in Managerial and Financial Accounting 25 (2012) 117-137. ... Also a case study is chosen for the empirical aspect of the study as there are no case studies ...

  12. The Theory of Constraints: A case study as a strategic tooling in

    A case study of the use of Theory of Constraints in a small sized company of automotive spare parts production located in the city of Campo Limpo Paulista (São Paulo) that introduced TOC...

  13. The Case Study of Bottlenecks Identification for Practical

    In this study, the implementation of the theory of constraints (TOC) rules for job-shop systems to advance the state of research on constraint scheduling is investigated.

  14. Theory of Constraints (TOC): All You Need to Know

    Why use Theory of Constraints. An independent study on the application of the Theory of Constraints (TOC) in various companies yielded the below findings: [3] ... in this case, would mean: Adjusting the schedule for a 24-hour operation. Minimizing downtime through preventive maintenance, maintaining a buffer stock of spare and tools, and ...

  15. Using the theory of constraints to improve competitiveness: an airline

    Using the theory of constraints to improve competitiveness: an airline case study - Author: Tony Polito, Kevin Watson, Robert J. Vokurka. The aim of the discipline of Operations Management is to gain competitive advantage. One more recent and lesser‐known Operations Management technique that is finding greater acceptance is the Theory of ...

  16. [PDF] Revolutionizing supply chain management the theory of constraints

    DOI: 10.1080/00207543.2018.1523579 Corpus ID: 115523549; Revolutionizing supply chain management the theory of constraints way: a case study @article{Modi2018RevolutionizingSC, title={Revolutionizing supply chain management the theory of constraints way: a case study}, author={Kartik Modi and Harshal Lowalekar and N M K Bhatta}, journal={International Journal of Production Research}, year ...

  17. Theory of constraints

    The theory of constraints ( TOC) is a management paradigm that views any manageable system as being limited in achieving more of its goals by a very small number of constraints. There is always at least one constraint, and TOC uses a focusing process to identify the constraint and restructure the rest of the organization around it.

  18. PDF The theory of constraints as a manufacturing strategy:a case study in a

    1. INTRODUCTIONS Theory of Constraints (TOC) can be defined as a procedure for managing factors, production processes, organizational decisions and situations in which there are constraints in the current state. The TOC is a business management tool that links all the manufacturing techniques.

  19. Theory of Contraints

    In December 2019, the Theory of Constraint was applied to the 909th Aircraft Maintenance Unit with help from Tesseract and Goldratt Consulting to increase air refueling capabilities through mission capable KC-135 aircraft.

  20. Integrating enterprise resources planning and theory of constraints: A

    Theory of constraints is a comprehensive managerial philosophy, which offers a new approach to the management and continuous improve of the operations in the company; it is a method for the ...

  21. The Application of Theory of Constraints in Industry: A Case Study

    Design/methodology/approach: The case study approach is selected as a research methodology because of the need to investigate a current phenomenon in a real environment. Findings: In the case study analysed, the protective capacity of non-bottleneck resources is found to the key factor when subordinating the MTO system to a bottleneck (BN).

  22. Theory of Constraints Case Studies

    Theory of Constraints Case Studies - Extraordinary Performance Improvement. Fast. Theory of Constraints Case Studies Detailed Case Studies of our clients' Theory of Constraints Implementations We always learn, from every implementation. It's our internal version of Continuous Improvement.

  23. Theory of constraints case study in the make to order environment

    Purpose: The theory of constraints (TOC) drum-buffer-rope methodology is appropriate when managing a production plant in complex environments, such as make-to-order (MTO) scenarios. However, some ...

  24. Optimal sizing of battery energy storage system for a large‐scale

    The details of selected grid code constraints are described in Section 3. The proposed techno-economic optimization approach is presented in Section 4. Section 5 provides simulation results of the case study and discussions. Finally, Section 6 concludes the paper. 2 WIND DATA