What is the Theory of Constraints (TOC)?

The Goal by Eli Goldratt was published in 1984 and went on the become an international best-seller, as well as leading to the creations of one of the top 3 business improvement methodologies used in the world today - the Theory of Constraints (TOC).

The TOCICO Dictionary defines the Theory of Constraints (TOC) as 'A holistic management philosophy developed by Dr. Eliyahu M. Goldratt that is based on the principle that complex systems exhibit inherent simplicity, i.e., even a very complex system made up of thousands of people and pieces of equipment can have in any given time only a very, very small number of variables – perhaps only one (known as a constraint) – that actually limits the ability to generate more of the system’s goal.'

Corporations like Amazon, Walmart, McDonald's, Procter & Gamble, Microsoft, Hitachi, General Motors, Boeing, BAE, EuroCryoSpace, Embraer, Delta Airlines, Tata Steel and many more have used the Theory of Constraints (TOC) principles to engineer a decisive competitive edge and achieve FAST and amazing RESULTS. Watch these FREE VIDEOS to learn more about What isTOC!

Viable Vision ~ by Dr. Eli Goldratt

Maybe the best way to describe what I mean by a “Viable Vision” is by a quote taken from a letter I wrote to my friends:

“When I do an analysis of a company I am somewhat satisfied only when I clearly see how it is possible to bring the company to have, in less than four years, net profit equal to its current total sales.”

Download the Viable Vision letter read during Eli's keynote presentation at the 2004 TOCICO International Conference.

The Core ~ TOC is Based on 3 Basic Assumptions

• Basic Assumption #1: Everything within a system is connected by cause and effect relationships. Identification of the causes leads us to converge onto an apparent core problem/contradiction/conflict. Manifestation: Search for a logical reasoning. The use of Cause and Effect relationships to structure our thinking, record our analysis and understand the suggested solution for any problem (based on Convergence)
• Basic Assumption #2: All contradictions can be resolved without compromise – our level of understanding and our assumptions hold the contradiction in place. A compromise is not usually a win-win solution. Manifestation: Resolve conflicts. A strong belief that there should be no conceptual conflict within our reality – hence – striving to find a win-win solution to any perceived "no solution situation” (Local & Global)
• Basic Assumption #3: There is no resistance to improvement – people do not embrace change because we have not brought them to see the win for them. Manifestation: Seek for collaboration and contribution. The use of TOC logical tools logic to communicate to ourselves and thereafter to the team with the view of working together to achieve the desired improvement (based on Respect) 
  

Written and donated for use by Oded Cohen and Jelena Fedurko

Systems and Systems Thinking

What prevents us from achieving the goal?

CONSTRAINTS – factors or elements that determine how much the system can accomplish.

Main Types of Constraints of a System:

• Capacity Constraint – a resource which cannot provide timely capacity the systems demands for it.
  
• Market Constraint – the amount of customers’ orders is not sufficient to sustain the required growth of the system.
  
• Time Constraint – The response time of the system to the requirement of the market is too long to the extent that it jeopardizes the system’s ability to meet its current commitment to its customers as well as the ability of winning new business.

THE FIVE FOCUSING STEPS OF TOC

1. Identify (choose) the system’s constraint.
2. Decide how to exploit the system’s constraint.
3. Subordinate everything else to the above decision.
4. Elevate the system’s constraint.
5. If the constraint is broken go back to step one but do not allow Inertia to cause the system’s constraint.
   

Written and donated for use by Oded Cohen and Jelena Fedurko

Managing Systems

The Leader of a system sees their role as to ever improve the performance of the system under their responsibility. Improved performance is a result of implementing a new idea ("solution”) onto the existing system.

The manager who introduces the solution needs to know:

1. Which parts of the system are "erroneous” and have to be replaced
2. The new parts must be introduced to replace the erroneous parts
3. All the other parts of the system stay as they are!

Managers need a systematic approach to develop plans for the pursuit of a significant improvement of their systems. This systemic approach is about finding answers to the four questions of system improvement.

1. WHAT to change? Pinpoint the core problem
2. WHAT to change to. - Construct simple practical solutions
3. HOW to cause the change? - Induce the proper people to make the change (to invent such solutions)
4. WHAT creates the process of ongoing improvement (POOGI)? - Create a mechanism to determine what to improve next

TOC enhances the ability of managers to develop or construct solutions for improving the performance of their systems. At the same time – TOC also enhances the ability to communicate the solution to the proper people that their support and collaborations is necessary for implementing the solution.

Written and donated for use by Oded Cohen and Jelena Fedurko.

Leading People Through Change

Years of experience in implementing changes for improvements have taught us that what is perceived to be "Resistance to Change” stems, in most of the cases, from disagreement with the initiator of the change. We have also learned that the disagreement is structured logically.

There are potential six layers of resistance to change:

• 1. Disagreement on what the problem is
• 2. Disagreement with the direction of solutions
• 3. Disagreement that the solution will bring the desired benefits.

• 4. Fear that the solution will result in negative consequences (risks)
• 5. Obstacles to implementation seem to be impossible to overcome

• 6. Say "Yes” and do nothing

The six layer demands Leadership and people skills to draft people to support and contribute to the successful implementation of the solution.

 Written and donated for use by Oded Cohen and Jelena Fedurko.

Our Vision and Mission

The Theory of Constraints International Certification Organization (TOCICO) is more than ever committed to growing the Theory of Constraints (TOC) for everyone! The TOCICO unites people who share a passion for win-win holistic thinking and share a vision that this will become the main way to manage organizations. We are a global Not-for-Profit certification organization for TOC practitioners, consultants and academics to develop and administer certification standards, and facilitate the exchange of latest developments. Our mission is to be the primary source of knowledge and pathway to become real TOC practitioners with member resources and certification recognized worldwide no matter from where you start your journey.