Theory of Constraints

Welcome to the world of
Theory of Constraints

Organizations are systems of interdependent parts or subsystems. Yet, most continue to depend on functional performance targets- often conflicting ones, in an attempt to get desired overall outcomes! View this video to see the fallacy of this and gain insight into how the interconnected nature of organizations also offers the solution to effectively managing companies.

The Scientific basis of Theory of Constraints

Is managing an organization an art or science? While this debate is on, Theory of constraints (TOC) assumes that it is possible to apply the principles underlying the development of hard sciences, like physics, in the area of management of organizations.

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Theory of constraints

The TOC body of Knowledge

To reach their true potential, organizations need the capability to not only react and adapt quickly, but also to thrive on changes in the environment. TOC offers a comprehensive body of knowledge which can help companies to manage and grow their businesses by building a decisive and sustainable competitive edge.

  • Operations

    Drum Buffer Rope was developed to exploit the manufacturing resource constraint. The application of drum-buffer-rope and buffer management helps manufacturing organizations release hidden capacity while improving reliability of deliveries with lead time reduction.

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  • Distribution

    TOC Replenishment was developed for organization in the distribution and retail business. This application helps making right product available at right time and place with much lower inventory. TOC replenishment helps plug the loss sales due to unavailability.

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  • Projects

    Critical Chain Project Management helps project organization realise benefits of the project early by significant lead time reduction. For multi-project environment, it helps release capacity to execute more projects.

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  • Sales Process

    Sales Flow Management helps companies exploit existing sales capacity and experience quantum jump in sales productivity,while ensuring improved quality of service.

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  • Finance And Measurement

    Thruput accounting was developed to improve effectiveness of financial decision making. Most business decisions made using cost accounting rules can be erroneous and can lead to cost or revenue leakages.

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  • Decision making

    TOC thinking process tools can guide decision makers by facilitating the process of problem structuring, problem identification, solution building, identification of barriers to be overcome and implementation of the solution.

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Creating Ever-Flourishing Companies

The bigger and more successful a firm is, the more vulnerable it can be to disruption! But the good news is that by exploiting “hidden” capacity in production and “untapped” demand in the market, a company can flourish by constantly increasing gross contribution without inflating Operating Expenses and without any capital risk.