The Theory of Constraints

The Theory of Constraints (TOC) is an overall philosophy developed by Dr. Eliyahu M. Goldratt. This philosophy is frequently applied to running and improving an organization. The Theory of Constraints consists of Problem Solving and Management Decision-Making Tools called the Thinking Processes (TP).  The Frehn Center’s approach to TOC is a functional method to logically and systematically answer three questions crucial to any process of ongoing improvement:

• "What to change?"
• "To what to change?"
• "How to cause the change?"

More specific uses of the Thinking Processes can be used to extensively enhance essential management skills, such as:

• Win-win conflict resolution
• Effective communication
• Team building skills
• Delegation
• Empowerment

The Theory of Constraints proposes that the ambition is to make more money. It describes three ways to achieve this goal:

• Increase Throughput
• Reduce Inventory
• Reduce Operating Expense

The Frehn Center’s approach utilizes TOC, which can be viewed as three separate but interconnected areas-Logistics, performance measurement, and logical thinking. Logistics include drum-buffer-rope scheduling, buffer management, and VAT analysis. Performance measurement consists of throughput, inventory, operating expense, and the five focusing steps. Thinking process tools identify the root problem, identifying and expanding win-win solutions, and developing a plan for implementation.

The Frehn Center incorporates TOC into real life business situations. TOC is more than a multifaceted management philosophy and a set of tools or techniques; it demands that a company thinks about problems, solutions, goals, objectives, policies, procedures and measures, in a fresh new way.

Please contact the Frehn Center to discuss implementing TOC applications in your organization.

(717)-477-1430
FrehnCenter@ship.edu