Management By Constraints

Management By Constraints is a breakthrough for organisations worldwide seeking operational and strategic improvement. Based on the Theory Of Constraints (TOC) philosophy developed by Goldratt (Goldratt and Cox, 1988), the key elements of Management By Constraints involve the focusing steps:

  1. Determine the system’s goal
  2. Establish global performance measures
  3. Identify the system constraint
  4. Decide how to exploit the constraint and break dummy and policy constraints
  5. Subordinate the rest of the system to the above decision (the constraint)
  6. Elevate and break the constraint
  7. If a constraint was broken return to step 3. Do not let inertia become the system constraint.

This viewpoint revolves around determining the systems goal, then what constraints limit this being achieved. In most cases, the goal of an organisation will be to make money now and into the future. A constraint can be defined as “any element or factor that prevents an organisation from achieving a higher level of performance with respect to its goal” (Ronen & Pass, 2007). Identifying the constraint is crucial in the process as improving a non-constraint (sub-optimal performance) will not increase the throughput of the organisation.

Calsta subscribe to this methodology as well as other Theory Of Constraints processes such as The sophisticated Thinking Processes for decision making (Current Reality Tree, Evaporating Cloud, Future Reality Tree, and Strategy and Tactics Tree) and Critical Chain Project Management (CCPM).

References:

Goldratt, E. M. 1988. “Chapter 2 laying the foundation,” The Theory of Constraints Journal 1 (2):1 – 20.

Ronen, B. & Pass, S. (2007). “Focused Operations Management: Achieving More with Existing Resources,” John Wiley & Sons, Inc., Hoboken, New Jersey.