The goal of the theory of constraints is to make money now and in the future by
managing constraints. The theory of constraints (TOC) recognizes that the performance
of any organization (system) is limited by its constraints. In operational terms, every
system has at least one constraint that limits its output. The theory of constraints develops
a specific approach to manage constraints to support the objective of continuous
improvement. TOC, however, focuses on the system-level effects of continuous
improvement. Each company (i.e., system) is compared to a chain. Every chain has a
weakest link that may limit the performance of the chain as a whole. The weakest link
is the system’s constraint and is the key to improving overall organizational performance.
Why? Ignoring the weakest link and improving any other link costs money and
will not improve system performance. On the other hand, by strengthening the weakest
link, system performance can be improved. At some point, however, strengthening
the weakest link shifts the focus to a different link that has now become the weakest.
This next-weakest link is now the key system constraint, and it must be strengthened
so that overall system performance can be improved. Thus, TOC can be thought of as
a systems approach to continuous improvement