What is TOC?
Many people who encounter TOC for the first time,
look for a simple explanation of the body of knowledge.
In essence, TOC is a process of ongoing
improvement for any system, be it business, personal or environmental. It is a
more effective approach than all the other approaches bandied about, since it is
based on a common sense approach to change. This can be described as follows:
-
A system's current performance is determined
and dictated by the constraint that exists within it
Performance of the system can only be
improved if the constraint is permanently removed
When the constraint is removed, the system
moves to higher level of performance, and immediately encounters another
constraint
The Theory of Constraints is very effective at
increasing the performance of business systems. However, if you had to ask
" What does TOC really do?", few people will be able to answer
the question. Many people know about DBR, Throughput Accounting and all the
other good stuff, but nobody can tell you what it all does.
Here is the
answer
TOC coordinates
decisions to synchronize the behavior of all systems for maximum output and minimum waste
Lean manufacturing focuses
on eliminating waste in all forms, but nobody asks what caused
the waste in the
first instance! TOC does - and has the answer!
Originally, TOC postulated that any system's
performance is determined by its constraints. This is still valid and true, but
which system are we referring to? We have determined that a MINIMUM of 77
systems are required to make any business successful. But, because of our
ingrained cost reduction obsession, we try to optimize every system. This causes
friction between systems, which is the root cause of waste.
That's why TOC is so much more powerful than
Lean. It changes the system that causes the waste, removes the friction between
systems, and makes the entire organization more effective. By
systematically identifying and removing the biggest constraints (or drivers of
waste) the benefits from TOC is more significant and achieved much faster
than any other approach.
By systematically moving from one constraint to
the next, rapid and lasting performance improvement is sustained. This process
is known in the TOC fraternity as:
The five-step process to remove
physical constraints
To explain these concepts in more detail, we developed a
walk-through of each step. By clicking on the link below, you will gain a good
understanding of the fundamental principle of the Theory of Constraints.
Read the
Five Step Process
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