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The theory of constraints (TOC) is a management paradigm that views any manageable system as being limited in achieving more of its goals by a very small number of constraints. There is always at least one constraint, and TOC uses a focusing process to identify the constraint and restructure the rest of the organization around it.
The primary thinking processes, as codified by Goldratt and others: Current reality tree (CRT, similar to the current state map used by many organizations) — evaluates the network of cause-effect relations between the undesirable effects (UDE's, also known as gap elements) and helps to pinpoint the root cause(s) of most of the undesirable effects.
Current reality tree example. A CRT begins with a list of problems, known as undesirable effects (UDEs.) These are assumed to be symptoms of a deeper common cause. To take a somewhat frivolous example, a car owner may have the following UDEs: the car's engine will not start; the air conditioning is not working; the radio sounds distorted
[2]: 31 For example, Goldratt surfaces the following assumptions behind the 2nd statement in the example EC: In order to reduce setup cost per unit we must run large batches, because. setup cost is fixed and can't be reduced. the machine being set up is a bottleneck with no spare capacity. [9]: 48–50 And again, with the 5th statement:
Constraints accounting, which is a development in the Throughput Accounting field, emphasizes the role of the constraint, (referred to as the Archemedian constraint) in decision making. [7] Goldratt's alternative begins with the idea that each organization has a goal and that better decisions increase its value.
Eliyahu Moshe Goldratt (March 31, 1947 – June 11, 2011) was an Israeli business management guru. [1] [2] He was the originator of the Optimized Production Technique, the Theory of Constraints (TOC), the Thinking Processes, Drum-Buffer-Rope, Critical Chain Project Management (CCPM) and other TOC derived tools.
Applying the Theory of Constraints to project management; The goal of the book is the last point, but Goldratt makes it clear that educational systems must change to better accommodate the quickly changing world of business. The book walks the reader through a series of steps to establish the principles for the discussion.
The theory was first derived by Dr Eliyahu Goldratt through his 1984 bestselling novel, 'The Goal.' Dr Goldratt was a well-regarded educator in the construction industry, being sought-after by many large companies. In the mid 1990s, Goldratt in 2000, established Goldratt's Marketing Group to further enhance the TOC knowledge to those interested.