Basic principals underlying Theory of Constraints

Basic principals underlying T.O.C (Theory of Constraints)

1. In managing change and solving problems System thinking is preferable to analytical
thinking.

2. Ongoing improvement is imperative :

An optimal solution deteriorates over time as the system’s environment changes. A process of
ongoing improvement is required to update and maintain the effectiveness of a solution.

3. The system optimum is not the sum of the local optima

4. Systems are analogous to chain

5. It is pointless to strengthen non- constraint :

Strengthening any link in a chain other than the weakest one does nothing to improve the strength of the whole chain

6. Understand the system and its goal before changing it :

Knowing what to change requires through understanding of the system’s current reality,

7. Most of the undesirable effects within a system are caused by a few core problems (few
causes)

8. Core problems are almost never apparent on the surface:

Core problems manifest themselves through a number of undesirable effects that should be linked together through cause and effect.

9. Solving core problem eliminates resulting undesirable effects :

While elimination of individual undesirable effects gives a false sense of security if the underlying core problem is ignored. Solutions that that do this are likely to be short lived. Solution of the core problem simultaneously eliminates all resulting undesirable effects.

10. To solve core problem you must challenge underlying assumptions and invalidating at least
one assumption.

11. System constraints are either physical constraints or policy constraints.

12. Solutions tend to resist change:

Inertia is the worst enemy of a process of ongoing improvement

13. Ideas are not solutions:

The best ideas in the world never realize their potential unless they are implemented.

Although the TOC has its roots in the manufacturing environment; applications have been
developed for service industries. Measures of speed and cycle time must be defined appropriately for the nature of the enterprise. Additionally, specific TOC implications for management accounting have been assessed to consider the benefits of throughput accounting in business rather than using traditional cost accounting methods.