Theory of Constraints

Origin. Eliyahu Goldratt; the five focusing steps.

Mechanism. In any system with a throughput objective, exactly one constraint governs at a time. Improvement upstream of it increases inventory; downstream, it increases idle capacity. Both are indistinguishable from progress on local metrics.

Procedure. Identify the constraint. Exploit it — extract maximum throughput from it as it stands. Subordinate everything else to that decision. Elevate it — add capacity. Return to step one, because the constraint has moved. Do not let inertia become the constraint.

Applies to. Manufacturing, software delivery pipelines, staffing.

Limitations. The single-constraint premise holds for well-behaved flow systems. In systems with multiple interacting resources or stochastic routing, several constraints bind simultaneously and the focusing steps have no unique referent.