Theory of Constraints

The theory of constraints is a management philosophy introduced by Eliyahu Goldratt in his 1984 business novel The Goal, which holds that any complex system, such as a manufacturing process, has at any given time exactly one constraint, or bottleneck, that limits the system's overall output, and that improving performance requires identifying and managing that constraint rather than optimizing every part of the system equally. Goldratt proposed a five-step focusing process for applying the theory: identify the constraint, exploit it, subordinate every other process to that decision, elevate the constraint if needed, and then repeat the cycle once the constraint shifts. The theory has been widely applied in operations and production management as an alternative or complement to approaches such as lean manufacturing and total quality management.