Five Steps to Implementing TOC
Implementing the Theory of Constraints (TOC) can transform your operations and lead to substantial gains in efficiency and profitability.
But how do you go about it? Here are the five core steps to implementing TOC, each explained in detail:
Step 1: Identify the Constraint
The first step of the process is to identify the weakest link in the system. This constraint, also known as the bottleneck, is the factor that is most significantly limiting the system from achieving high performance or throughput.
Identifying this constraint involves a careful analysis of the entire process to locate the limiting factor. This can some of the following for example:
- A machine or process step that has the longest processing time.
- A policy that causes delays or inefficiencies.
- Limited market demand for the product.
- A key skill or expertise that is in short supply.
A good method that can be used to identify constraints in processes is a Value stream map (VSM) that maps out all the key process steps and cycle times to understand which process step takes the longest to complete and could be the bottleneck in the process is a lot of work in progress (WIP) is stacking up before that step.
Step 2: Exploit the Constraint
Once the constraint has been identified, the next goal is to exploit it, which means making the most efficient use of this resource. This does not necessarily involve investing in new resources, but could involve optimizing the use of what is currently available.
This could involve ensuring the constrained resource is used only for tasks that exploit its full potential. Or, reducing inefficiencies or idle time for this resource. You could also consider improving the quality of inputs to the constraint to reduce rework or errors.
The focus here is to achieve the most capacity possible from the constraint without any significant expense.
Step 3: Subordinate Other Processes
Subordinating involves aligning the entire process to support the efficient working of the identified constraint. This mean that other elements of the process should be adjusted to ensure that they are in sync with the constraint’s capacity.
The approach for this step could include:
- Adjusting the pace of work in other parts of the system to match the constraint’s pace.
- Changing schedules, processes, or priorities to ensure the constraint is not starved or overwhelmed by work.
- Aligning procurement, production, and distribution strategies to the rhythm of the constraint.
This step is crucial in ensuring that the system works in a synchronized manner, respecting the limits of the bottleneck.
Step 4: Elevate the Constraint
If the constraint still exists after trhe exploiting and subordinating steps, the next step is to elevate its performance. This can involve:
- Investing in additional resources or equipment to increase the capacity of the bottleneck.
- Implementing training programs to enhance skills or hiring additional staff.
- Changing or modifying policies that may be causing the constraint.
Elevation is about finding ways to fundamentally increase the capability of the constrained resource.
Step 5: Go Back to Step 1: The Continuous Nature of TOC
After successfully addressing a constraint, the system’s overall performance will improve, but this often leads to the creation of a new constraint. The process is cyclical, and thus it’s essential to go back to step 1, identifying the new bottleneck, to continue the improvement journey.