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Summary of Eli Goldratt's book The Goal

Introduction to Throughput Accounting

The 5 Theory of Constraints focusing steps

A review of The Goal video

The drum buffer rope dice game

Buffer management

Summary of Critical Chain

Making a rock-solid Business Case for Theory of Constraints

Making a rock-solid Business Case for Theory of Constraints
Putting Dollars to the Theory of Constraints

The business case for an implementation of Critical Chain project management, or of the Sales solution in isolation of other applications, or a workshop on the Thinking Processes ... each would naturally have an entirely different business case.

However, a Drum-Buffer-Rope implementation in a manufacturing business, in combination with the minimum of sales elevation to keep the plant busy, is the single most common Theory of Constraints implementation and the one I shall use for a base model.

ERP and Theory of Constraints make for a powerful combination

ERP and Theory of Constraints make for a powerful combination
Theory of Constraints and Enterprise Resource Planning

When I first encountered Eli Goldratt's concepts I had designed MRP systems, developed MRP systems, implemented a simple MRP system in the factory where I worked, and project-managed the implementation of more than 20 systems in Europe and North America, as a consultant.

What I learned when I first encountered Eli's new ideas was precisely why so many MRP implementations — although considered successful in relative terms — failed to yield the scale of performance improvement that could have been expected given the advancement that the MRP logic and computer technology represented over the previous means of production planning, scheduling and control.

Lean and Theory of Constraints form a powerful combination

Lean and Theory of Constraints form a powerful combination
Theory of Constraints and Lean; the uneasy relationship that should be a solid win/win

While it would be ideal to talk about a TOC/Lean marriage, and while there ARE tremendous opportunities for synergy (this is the only time I use this over-worked word in this entire web site, by the way) the reality is that there IS perceived competition between Lean and Theory of Constraints because in reality many Lean practices appear counter-productive, sub-optimal, and, ironically, wasteful from a TOC perspective while many TOC practices are contrary to a by-the-book Lean perspective.

Six Sigma and Theory of Constraints are a powerful combination

Six Sigma and Theory of Constraints are a powerful combination
Theory of Constraints and Six Sigma; it should be win/win/win for the technologies and the user, rather than either/or

When a technology makes a big logical or emotional impact on someone, it seems to show-up in the form of defensiveness and aggression. Defensiveness as in, "we have Brand X, we don't want or need Brand Z". And aggression as in, "Brand X is the best, Brand Z sucks."

Maybe it's that tribalism that helps a company buy-in so strongly to a new way of thinking and working, and achieve results. But with Theory of Constraints and Six Sigma there should only be one either/or, and it's at the philosophical level.

Resources to learn more about Theory of Constraints

Resources to learn more about Theory of Constraints
Books, Videos, DVD's, classroom courses, webinars ... where to start?

If reading is your preferred entrance point, there is a wide-ranging variety of books available, some attempting to cover the whole body of knowledge, some (naturally) focusing on specific applications.

Choosing a Theory of Constraints consultant

Choosing a Theory of Constraints consultant
TOC Consultants: not just one tribe

This isn't the standard discourse on how to choose a consultant. Just some background issues that you might want to consider when you look for a consultant.

In many ways, you can view TOC consultants in layers.

Layer 1: The pioneers

When Eli Goldratt first introduced his (then) unusual concepts into North America in 1978, he was bucking every trend in manufacturing, and Eli, his company and his concepts were at war with a huge body of knowledge that was still itself revolutionary, and had the backing of every manufacturing organization in the Western world — MRP, just evolving into MRP II. So the people who joined and worked with him were the first of several waves of highly motivated contrarians who enjoyed the contrarian position, enjoyed the shock-power of the Goldratt concepts (Cost Accounting: Enemy #1 of productivity! for example), and believed deeply in the concepts. They also had to REALLY know the topic because they had to prove everything, every time.

In those days the topic was simply, scheduling. There was no distribution solution, marketing or sales solution, project management solution, strategic or people solution ... in fact the Thinking Processes did not even exist. Not even a concept. There was software to support the scheduling; in fact, the software was the core of the scheduling in those days. But knowledgeable consultants were vital to help companies apply the concepts that the software supported.

Those people were the first wave of TOC consultants, and several are still active today, 27 years later. Quite simply, those still around are typically hugely experienced in the production application, darned good, and expensive (but worth it).

Software issues associated with the Theory of Constraints

Software issues associated with the Theory of Constraints
Software in support of a Theory of Constraints implementation: often unnecessary, sometimes an obstacle, mostly useful, occasionally vital

When a Theory of Constraints consultant learns his or her soon-to-be client has just bought or is in the middle of an implementation of "standard" software, it's understandable that the first reaction is often "oh dear."

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Privacy Statement for ExecutiveBriefing-TOC Site
Privacy Statement

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Theory of Constraints Viable Vision - unheard-of profit growth

Theory of Constraints Viable Vision - unheard-of profit growth
An Outrageous Concept: your profit in 4 years to meet or exceed your sales revenues today ... with 90% of the risk assumed by the consultants

Eli Goldratt has been seeking ways to make Theory of Constraints the dominant management strategy in organizations of all kinds, world wide, for decades; a fairly ambitious goal, as is usual for Eli. At the same time, he has probably felt a little frustrated at the superficial comparisons between Lean and Theory of Constraints, Six Sigma and Theory of Constraints, made my managers who understand Lean or Six Sigma but who only think they understand TOC.

The Viable Vision program is Eli's answer to both of these.

Variations on the Theory of Constraints Thinking Processes

Variations on the Theory of Constraints Thinking Processes
The Theory of Constraints Thinking processes are extremely flexible, as you'd expect from tools used in the Boardroom and the shop floor ... yet taught in Kindergarten!

There are variations on the tools themselves, and variations on how you can use them.

Transition Tree - a Theory of Constraints Thinking Process

Transition Tree - a Theory of Constraints Thinking Process
The Transition Tree is a cause-effect planning tool (one of the Theory of Constraints' Thinking Processes) that nails down the action plan

Another Effect-Cause-Effect diagram, the Transition Tree is a deceptively simple tool used to develop a detailed action plan of precisely what must happen, in time-sequenced, cause-effect detail, in order to have a high degree of assurance that a desired outcome will be achieved in reality.

PreRequisite Tree - a Theory of Constraints Thinking Process

PreRequisite Tree - a Theory of Constraints Thinking Process
The PreRequisite Tree is a Theory of Constraints planning tool that actually uses Obstacles as levers to achieve the end result

Often, the obstacles to achieving something appear to be so large as to make it appear beyond reach. Or at least, to make the path so difficult that it is not easy even to see where to start. Both of which are primary causes of procrastination, of course.

The Evaporating Cloud: a Theory of Constraints Thinking Process

The Evaporating Cloud: a Theory of Constraints Thinking Process
The Evaporating Cloud is the perfect tool to use when you find yourself between a rock and a hard place, damned if you do and damned if you don't

This is one of those tools that, after you develop some proficiency, you cannot imagine not having in your arsenal.

There are many variations of the Evaporating Cloud, all with mostly subtle differences, but the heart of the technique is identical; this is one of the Theory of Constraints most common tools in practice, even taught in Kindergarten in some parts of the world!

Future Reality Tree - a Theory of Constraints Thinking Process

Future Reality Tree - a Theory of Constraints Thinking Process
The Theory of Constraints Thinking Process that focuses on designing the future you want — the Future Reality Tree

The Future Reality Tree is one of the most enjoyable, as well as one of the most powerful, Thinking Process tools to work with, and is particularly effective as a tool for gaining consensus on a plan of action. It uses cause-effect logic to develop a plan to create a future condition ... for example, to eliminate a suite of performance problems in production, or to create a suite of performance characteristics in a hospital.

How To Contact the WebMaster of Executivebriefing-TOC

How To Contact the WebMaster of Executivebriefing-TOC
How to contact the authors of this Theory of Constraints Site

Jackson Constraints Group, Inc

The Principals may be contacted at the following Postal or e-Mail address:

Information on this Theory of Constraints Site and authors

Information on this Theory of Constraints Site and authors
Jackson Constraints Group, Inc.

The principals of JCG Inc. have more than 17 years of experience in Theory of Constraints, with successes in every application and a proficiency in the Thinking Processes that comes from being involved with their development almost two decades ago.

The Thinking Processes of the Theory of Constraints

The Thinking Processes of the Theory of Constraints
Unique Planning & Analytical Tools for Managers

The "TOC Thinking Processes" are the Theory of Constraint ’s analytical, planning, problem-solving and communication processes, and they can be used by any organization to improve performance by constructing a powerful and practical solution to their own, specific core problems. They are also integral to all the TOC applications that have been developed – including Synchronous Manufacturing, Critical Chain Project Management, Distribution, Supply Chain, Throughput Accounting and the Marketing Solution.

Theory of Constraints in Health Care

Theory of Constraints in Health Care
Applying Theory of Constraints to Health Care: fast, major improvements in Emergency & Accident performance (and more)

Please note: data is available to support all claims made below.

When the UK government set a 4-hour standard for Accident & Emergency treatment (as I understand it, in 4 hours you must be back home, in a hospital bed, or dead ... I think I can see some undesirable side effects to this standard, I must be stating it incorrectly) the performance in many hospitals was dismal.

When the first implementation of Theory of Constraints was only 90 days old, in Milton Keynes, the results were already spectacular; and soon more than 90% of all incoming cases were treated within the time guidelines. This subsequently increased ... even as volumes of incoming increased with the 'flu season and the closing of a nearby hospital's department.

Theory of Constraints in the Educational System

Theory of Constraints in the Educational System
Did you know that school teachers, principals, and students use Theory of Constraints? Internationally?

In 1995 Eli Goldratt established "TOC for Education" as a not-for-profit foundation. The heart of the mission is to improve children's education by giving them tools and training to help them learn, think and communicate more effectively.

It's probably a surprise to learn that teachers and Principals across North America are recording clear benefits from the use of TOC not only from their own use of the TOC tools, but by teaching students from kindergarten to Grade 12 the TOC approach to conflict resolution, how to think through consequences, how to work in a team, and more.

It might be an even bigger surprise to learn that the educational systems of countries such as the Philippines, Malaysia, Mexico, Yugoslavia, Venezuela, United Kingdom, South Africa are also taking advantage of the Theory of Constraints. For example, how about 35,000 teachers and 650,000 students being taught Theory of Constraints in Malaysia!

Theory of Constraints embodies respect for people

Theory of Constraints embodies respect for people
Theory of Constraints provides a management philosophy, applications, and tools that embed RESPECT for people

It is no accident that Theory of Constraints typically gains the support of union members and shop stewards when a unionized organization is involved in a TOC implementation. At a level of management philosophy the TOC aims at converting "surfaced" additional capacity into more revenues, rather than into cost saving through trimming the "surplus capacity." And with its Unrefusable Offer strategy, TOC takes away the usual defense for layoffs ... that cost reduction is the only path to profit improvement or productivity growth. The TOC's Thinking Processes are also excellent tools in support of genuine employee empowerment.

Theory of Constraints and Company Strategy

Theory of Constraints and Company Strategy
A Methodical Strategic Planning Process unlike any other

There are many elements that may go into a sensible strategy; the Theory of Constraints provides value to the process in a wide variety of ways.

As a starting point, the Unrefusable Offer — a methodical way to developing a competitive edge that enables you to win substantial new business almost on demand — means that downsizing simply never has a role in a company strategy. A strategy can be confidently set in a direction of increased sales.

Using Theory of Constraints to make Sales or to gain Buy-in

Using Theory of Constraints to make Sales or to gain Buy-in
Using Theory of Constraints to construct an offer that is simply too good for the market to refuse (aka Mafia Offer)

Capacity constraints can usually be elevated and broken with focused management, and if necessary, increased Operating Expense or capital investment.

But Market constraints – a lack of sales, or a margin-squeeze that erodes profits even if sales grow – are the constraints that companies often have the most difficulty in breaking. Throwing money at the problem through advertising rarely improves the situation. Simply increasing sales activity often fails to resolve the issue. Promotions can actually be a profit-killer. Across-the-board price cuts may be disastrous. What other options are there? The Theory of Constraints offers a unique approach.

Theory of Constraints' Unrefusable Offer, aka the Mafia Offer

Theory of Constraints' Unrefusable Offer, aka the Mafia Offer
Using Theory of Constraints to construct an offer that is simply too good for the market to refuse (aka Mafia Offer)

Capacity constraints can usually be elevated and broken with focused management, and if necessary, increased Operating Expense or capital investment.

But Market constraints – a lack of sales, or a margin-squeeze that erodes profits even if sales grow – are the constraints that companies often have the most difficulty in breaking. Throwing money at the problem through advertising rarely improves the situation. Simply increasing sales activity often fails to resolve the issue. Promotions can actually be a profit-killer. Across-the-board price cuts may be disastrous. What other options are there? The Theory of Constraints offers a unique approach.

Critical Chain Project Management; a performance breakthrough

Critical Chain Project Management; a performance breakthrough
Critical Chain Project Management

In most project environments, people are working flat-out or even at burn-out rates. Uncertainty is characteristic of the environment; requirements, tasks, resource availability often change within the project life-span. Task times are estimates and can "prove" to be wrong by a mile.

In these circumstances it is difficult to understand how any approach to Project Management — not just Theory of Constraints — can claim to offer the potential for reduced project durations with high confidence levels in meeting the promised dates without compromising the deliverable or the project budget.

The Theory of Constraints moves Supply Chain Management to a new level

The Theory of Constraints moves Supply Chain Management to a new level
Supply Chain Management — going beyond the common superficial solution

When Supply Chain Management is combined with the Theory of Constraints' unorthodox approach to "breaking" market constraints, the result makes conventional Supply Chain management look superficial.

Theory of Constraints Distribution Solution

Theory of Constraints Distribution Solution
A True Replenishment Approach

Just to set the scene: I do not consider the distribution solution and supply-chain solution to be synonymous from a Theory of Constraints perspective, even though they are lumped together in Eli Goldratt's educational materials. Distribution is typically an element in a supply-chain solution, often it's even the major element, and it is a powerful application in its own right ... but a TOC Supply Chain approach can include much more (and be much more powerful) than just the Distribution Solution.

Throughput Accounting: the key to profit-oriented decisions

Throughput Accounting: the key to profit-oriented decisions
Throughput-Based Decision Making

In a near-legendary presentation in 1981, Eli Goldratt declared Cost Accounting to be "Enemy #1 Of Productivity." He could with equal accuracy have called it Enemy #1 of Profitability ... especially for a manufacturing business. Throughput Accounting, or as some prefer to call it Throughput-based decision making, is the replacement.

Drum Buffer Rope; the Theory of Constraints Production Solution

Drum Buffer Rope; the Theory of Constraints Production Solution
Synchronous Manufacturing

The TOC Production Solution is a scheduling and shop floor control technique called Drum-Buffer-Rope or DBR (strange name explained later). Synchronous Manufacturing, or Synchronous Flow Manufacturing, or Synchronous Management, are broader terms that include the the DBR approach but reflect a bigger-picture, whole-company synchronization. These terms date back to the pioneers who worked with Eli Goldratt before the Theory of Constraints was a formal technology (many are still active consultants and authors today, incidentally).

Current Reality Tree: Finding Core Problems in a problem soup

Current Reality Tree: Finding Core Problems in a problem soup
Current Reality Tree: this Theory of Constraints tool provides the cause-effect connections between a Core Problem and the symptoms it generates

Nothing happens by chance in a real system. Every performance symptom is an effect of one or more causes. The Current Reality Tree is a cause-effect technique that serves three main purposes:

Theory of Constraints: new site

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