THEORY OF CONSTRAINTS (TOC) BY AMAR P. NARKHEDE

INTRODUCTION The theory of constraints is an overall management philosophy that aims at continually achieving more of the goal of a system. If that system is for profit business then the goal becomes one of making more money, in the present as well as in the future Accordingly to TOC, every organization has one key constraint which limits the system performance relative to its goal. The constraints can be either internal constraints or market constraints. In order to manage the performance of the system, the constraint must be identified and managed correctly as per the five focusing steps

THE FIVE FOCUSING STEPS Step zero: Articulate the goal of the organization Step 1: Identify the constraint Step 2: Decide how to exploit the constraint Step 3: subordinate all the processes to the above decision Step 4: elevate the constraint if required permanently increase capacity of constraint Step 5: if, as a result of these steps, the constraint has moved return to step 1. Don’t let inertia becomes the constraints