Framework library · Operations and resilience
Theory of constraints
In any chain of dependent steps, one step limits what the whole chain can deliver, and an hour lost there is an hour lost to the system. The theory of constraints finds that step, gets the most out of it, makes the other steps serve it and only then adds capacity, because more capacity anywhere else adds nothing to output.
Use it when
- Output is below demand, work queues in front of one step, and adding people elsewhere has not helped.
- You are about to invest in capacity and need to know where it will raise output.
- Several teams or contractors each look efficient, yet the whole pipeline delivers late.
- A build or provisioning programme has a fixed target per quarter and keeps missing it.
Avoid it when
- Capacity exceeds demand at every step and the problem is delay or quality. Use value stream mapping or Six Sigma DMAIC.
- The constraint is the market: you can deliver more than customers buy. The work is then in sales and pricing, not operations.
- The steps are not dependent, such as separate teams serving different customers. Each team is its own system.
How to run it
Identify the constraint
List the steps in order with capacity and demand for the same period. The step with the highest utilisation, usually above 100%, is the constraint; the queue in front of it confirms it.
Exploit the constraint
Make sure it never waits for work, never works on anything that will be rejected later, and loses no time to avoidable stops.
Subordinate everything else to it
Pace the other steps to what the constraint can take. Work released faster than the constraint can absorb only builds queues.
Elevate the constraint
Only now add capacity: another crew, a second supplier, a contract with service levels. Check the cost against the output it adds.
Start again and watch for inertia
When the constraint moves, go back to the first step. Do not let rules made for the old constraint hold back the new one.
Work through it
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Mistakes to avoid
- Measuring every step on its own efficiency. Keeping steps that are not the constraint busy builds stock and hides the constraint.
- Elevating before exploiting. Buying capacity is often unnecessary when the constraint loses a fifth of its time to waiting or rework.
- Treating an outside body as beyond reach. A utility or a planning authority can still be managed: earlier applications, complete submissions, a named contact.
- Stopping after one cycle. Once the constraint is lifted, another step becomes the limit.
Where it comes from
Developed by Eliyahu M. Goldratt and introduced in The Goal, a business novel written with Jeff Cox and first published in 1984. The five focusing steps (identify the constraint, exploit it, subordinate everything else to it, elevate it, then start again without letting inertia become the constraint) are Goldratt's summary of the method and appear in The Goal. Source.
Use it with
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