Theory of Constraints

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Funnel model to illustrate the main principle of the theory of constraints: "In every value chain there is exactly one system that determines the performance of the whole - a clear bottleneck"

The Theory of Constraints (TOC) (also bottleneck theory or throughput management ) describes the entirety of thought processes and methods for improving the performance ( throughput ) of systems based on the ideas of Eliyahu M. Goldratt .

Bottleneck theory is based on the knowledge of systems theory that the throughput of a system is determined exclusively by a limiting factor (the bottleneck or constraint ). The throughput can only be improved if the overall system is optimized across the board based on the limiting factor.

Based on the thought processes of bottleneck theory, there are successful practical methodologies for production control ( drum buffer rope ), for marketing and sales, for retail, for supply chain management , for finance and controlling , for strategy development and, above all, for project management ( Critical chain project management ) (see bottleneck ).

historical overview

TOC was not developed in one go, but in stages. In 1979 the first steps were mapped in software as an “Optimized Production Timetable”. From 1982 this software was sold as " Optimized Production Technology " or OPT . It was not until 1987 that Goldratt released the basic ideas from the product and generalized them under the term “Theory of Constraints” (TOC).

The five focusing steps

The five focusing steps form the core of the bottleneck theory.

  1. "Identify the bottleneck" ( English Identify the System's Constraints ): In every value chain there is exactly one system that limits the throughput. In manufacturing this is usually the process step with the lowest capacity , in project management a specific team or skill. But it can also be management capacity , thinking and communication bandwidth. The bottleneck is identified through an analysis of the inventory or through the appropriately adapted planning processes.
  2. "Make full use of the bottleneck" ( English Decide How to Exploit the System's Constraints ): After the focus has been placed on the bottleneck, it becomes apparent that this bottleneck is typically not used optimally. The optimization goes in two directions below. On the one hand, it must be ensured that the bottleneck never runs empty, i.e. always has a small work list. On the other hand, the bottleneck must be relieved of all tasks that do not necessarily have to be processed in the bottleneck.
  3. "Arrange everything utilization decision as" ( English Subordinate Everything Else to the Above Decision ): Here all support processes are systematically aligned with the bottleneck. It is ensured that there is only as much work in the overall system as can actually be processed by the bottleneck. It is ensured that optimal work can be carried out in the bottleneck, i.e. clear priorities, quality assurance before the bottleneck or improvement of the tools used.
  4. "Eliminate the bottleneck" ( English Elevate the System's Constraints ): The next step is to remove the bottleneck. This is done expressly in accordance with the two preceding ones, as this is usually associated with an increase in fixed costs and there is a risk that existing, unfavorable management paradigms will further solidify.
  5. "In step 1 again start" ( english If in the Previous Steps a constraint Has Been Broken, Go Back to Step 1 ): there is always a systemic bottleneck. As soon as a bottleneck is resolved, a new one must arise elsewhere. A cycle begins marked by sudden improvements.

The biggest challenge is not to rest on the successes, but to concentrate on the next bottleneck.

Thinking tools (English "Thinking Processes")

In the context of bottleneck theory, tools have been developed that help dissolve blockages in thinking, make assumptions transparent and develop new solutions, that is, to get processes of thinking and change going.

What should be changed?

  • Present tree ( English Current Reality Tree , CRT): a tree representation of the current state based on undesirable phenomena.
  • Cloud , also Dilemma Cloud or Conflict Cloud : a graphic representation of an existing dilemma or conflict. The representation promotes the disclosure of the underlying assumptions, which are systematically questioned, which often leads to new insights and allows win-win solutions to be found or uncovered harmful rules (the use case is also called "fire cloud").

Where should the change lead?

  • Future Tree ( English Future Reality Tree , FRT): a tree view of the future desired state, focusing on the measures to be taken.
  • Future tree with negative branches (English Negative branch reservations): Here the future tree and its measures are supplemented by reservations - possible negative side effects.

How should the change be caused?

  • Prerequisite tree ( English PreRequisite Tree , PRT): a tree representation that shows which prerequisites must be met in order to achieve the goal (the future tree). The starting point is the search for obstacles on the way to the goal.
  • Implementation Tree ( English Transition Tree , TRT): a tree representation, what actions must be why not put in what order to achieve a goal.

Areas of application

  1. Production control ( drum buffer rope ): The bottleneck becomes a clock ( drum English: drum ). He will (through a worklist buffer English: buffer ) secured so that it is always busy. The signal for release of new orders given by the filling level of the buffer, the (English: as by a cable rope ) is transmitted. The jobs are then prioritized which are necessary to fill the buffer.
  2. Marketing and sales: the application of the bottleneck theory should lead to capacities being freed up, lead times and costs falling and adherence to deadlines improved. This enables the company to set itself apart from the competition.
  3. Retail: the bottleneck theory for retail includes close coordination across the entire distribution chain through the correct placement of the department stores and the prioritization of fast replenishment so that excess and shortage can be avoided.
  4. Supply chain management: is the comprehensive application of bottleneck theory to the first three areas of application.
  5. Finance and controlling : the bottleneck theory works with a few parameters (throughput, stocks / investments and operating costs). All financial decisions are evaluated solely based on their impact on the bottleneck.
  6. Strategy development: as soon as operational excellence is achieved, strategic issues come to the fore. Through consistent application of the thought processes, a strategy and tactics tree is created that pursues the long-term security of the company and thus the jobs.
  7. Plant construction and project management ( critical chain project management ): Production control forms the basis and is therefore fully multi -project capable. This is supplemented by buffer management and controlling, which eliminates the effects of the inevitable disruptions in the work packages.

For many of these areas of application, there are generic strategy and tactic trees that have emerged from years of experience. These describe in tree form a sensible procedure to gain the benefit of the bottleneck theory for an application area. The bottleneck theory is therefore not only a target model, but also includes the knowledge of how this target model can be achieved.

Methods

In the course of the implementation of bottleneck theory, a number of methods are used, some of which are congruent with the areas of application.

  • Throughput accounting : key figures and controlling of the throughput world.
  • Drum Buffer Rope : Production control when the bottleneck is in the company.
  • Simplified DBR : Simplified DBR when the bottleneck is the market.
  • Pull distribution: principles for the clever placement of stocks so that the desired product is very likely in stock at the point of sale .
  • Mafia offer : Use of operational excellence as a unique selling point compared to the competition.
  • Critical chain project management  : the multi -project management solution for reliably meeting deadlines and increasing throughput.
  • Thinking processes : the thinking processes mentioned above.
  • Strategy & Tactic Trees : Generic process models for standard applications of bottleneck theory.
  • Layers-of-Resistance : Model for explaining and overcoming obstacles.

criticism

Goldratt's work had a major impact on management literature, but also on academic literature on project management and operations research . His work did not go through the usual academic reception process, nor did Goldratt indicate the origins of his ideas. The critical path , for example, was anticipated in the PERT / CPM project methodology ; the importance of buffers worked out by Ronen and Triesch.

Goldratt was a businessman who sold his software solution and consulting services. Its reception in science falls in view of the work of Herroelen and Leus; Herroelen, Leus and Demeulemeester; Raz, Barnes and Dvir and others differently than in management circles. In 2005, Dan Trietsch claimed that the academic discipline could offer better solutions to the problems Goldratt addressed.

Regardless of the criticism, the Theory of Constraints has proven itself in practice much better than other approaches. The international comparative study by Steven J. Balderstone and Victoria J. Mabin gives an overview of the results to be achieved.

See also

literature

Web links

Individual evidence

  1. ↑ a b Victoria J.Mabin, Steven J. Balder Stone: The performance of the theory of constraints methodology: Analysis and discussion of successful TOC applications. In: International Journal of Operations & Production Management. Volume 23, No. 6, 2003, pp. 568-595.
  2. ↑ Eliyahu M. Goldratt: What is this thing called Theory of Constraints and how should it be implemented? North River Press, Great Barrinton (Mas.) 1990, ISBN 0-88427-166-8 , p. 4.
  3. ^ A b Trietsch, Dan: Why a Critical Path by any other Name would smell less sweet? : Towards a Holistic Approach to Pert / Cpm. In: The Project Management Institute. Volume 36, No. 1, March 22, 2000, pp. 27-36, ISSN  8756-9728 redorbit.com
  4. ^ B. Ronen, D. Trietsch: A decision support system for purchasing management of large projects. In: Operations Research. Volume 36, No. 6, 1988, pp. 882-890.
  5. ↑ W. Herroelen, R. Leus: On the merits and pitfalls of critical chain scheduling. In: Journal of Operations Management. Volume 19, 2001, pp. 559-577.
  6. ↑ W. Herroelen, R. Leus, E. Demeulemeester: Critical chain project scheduling: Do not over simplify. In: Project Management. Volume 33, No. 4, 2002, pp. 48-60.
  7. ^ T. Raz, R. Barnes, D. Dvir: A critical look at critical chain project management. In: Project Management Journal. Volume 34, No. 4, 2003, pp. 24-32.
  8. ↑ Steven J. Balderstone, Victoria J. Mabin: A Review of Goldratt's Theory of Constraints (TOC): Lessons from the international literature. In: School of Business and Public Management. Victoria University of Wellington, New Zealand.