Strengthen the Weakest Link: Theory of Constraints
In the same way that a chain is only as strong as its weakest link, the throughput of a multi-stage process is limited by the slowest step. The Theory of Constraints states that in order to improve any system, this weakest link or constraint must be improved or eliminated, and the next priority becomes finding and eliminating the next-weakest link.
The Theory of Constraints has been applied in many countries, many types of company and many industries leading to rapid and remarkable improvements – an independent study found implementing ToC led to a mean increase in revenue/throughput of 68%.
What is the Theory of Constraints?
The Theory of Constraints (ToC) hypothesizes that complex systems are made up of chains of linked processes – consider a manufacturing operation, constructing a building or a software release process. Earlier process steps must be completed before later process steps can start.
The maximum throughput of the entire process is limited by a constraint or bottleneck. The Theory of Constraints is used to identify the constraint, improve it to the point that it is no longer the limiting factor on the system, then move on to the next constraint and repeat the whole process.
Dr. Eliyahu Goldratt introduced the ToC concepts in his bestselling book “The Goal”, published in 1984 and is now considered a landmark publication in terms of management best practices. Goldratt focuses on the ultimate goal of the majority of companies – increasing profit. In practice, this comes down to improving other KPIs, such as cycle times, lead times, throughput and production capacity as well as minimising waste.
What are constraints?
Before we can start identifying and eliminating constraints, first we must understand exactly what a constraint is. In Dr. Goldratt’s own words, a constraint is “Anything that limits a system from achieving higher performance versus its goal.” They can also be referred to as bottlenecks.
A constraint or bottleneck can come in many forms, some applicable to manufacturing environments and some more applicable to services and knowledge work. Most constraints will be able to be improved, however some will be limited by external factors (i.e. government regulations, market conditions). Here are the typical categories they fall into:
Physical constraints: Missing or unfit for purpose equipment, not enough staff, not enough space, material or inventory shortages.
Policy constraints: Company procedures, government regulations, union contracts, informal workplace norms, “the way things have always been done”.
Market constraints: Production capacity is higher than the external market can support – the market is the limiting constraint. With repeated elimination of internal constraints, many companies will arrive here.
The 5 Focusing Steps
The Theory of Constraints uses a cyclical method, the 5 Focusing Steps, to identify and then improve or eliminate constraints.
Identify the current constraint – what is limiting the rate at which your goal is achieved.
Exploit the constraint – this step involves looking at how the constraint can be improved using existing resources. This could be something such as better scheduling of staff or equipment, or prioritising incoming tasks differently.
Subordinate everything else to the constraint. By definition, the non-constraint steps will have some “slack” – this can be used to support and improve the constraint.
Elevate the constraint. If the low-effort improvements of exploiting and subordinating the constraint have been attempted but unsuccessful, you may need to invest extra capital to eliminate the constraint. This could be spending on better equipment, more staff or additional training, for example.
Repeat the process with the next constraint. Dr. Goldratt warns against inertia – once some improvements have been made to the system, it’s easy to get complacent and stop searching for the next constraint to solve.
The Theory of Constraints and Kanban
The Theory of Constraints inspired David J Anderson while he was developing modern Kanban. The goal is the same – continuous improvement, increasing efficiency, improving throughput, decreasing cycle times and removing blockers or bottlenecks.
The Theory of Constraints integrates very well with the Kanban Method. A Kanban board enables the project manager and the team to instantly identify bottlenecks. As constraints are identified their root cause can be eliminated. Small constraints can be dealt with on a day-to-day basis, while large-scale constraints may require setting new Kanban roadmap goals and realign your company direction.
Another powerful Kanban tool for identifying constraints is the cumulative flow diagram. This diagram visually shows how work in each process state progresses over time. By understanding the most common CFD patterns, the location of common constraints becomes much more clear.
Here are a few easy ways to apply the Theory of Constraints to your Kanban workflow:
The first step is to find where your constraints are. There are several warning signs on your Kanban board and your Kanban charts that can help you find them.
- Keep an eye out for a big increase in work-in-progress in a single process state
- Look out for tasks or work items stuck in the process without anyone working on them
- Identify areas where process expeditors Class of Service are frequently involved
- Recognise the CFD patterns associated with blockers – flat lines, bulging band and disappearing bands
- Examine items with longer than average cycle time
- Check in with your team during regular Kanban meetings to get their perspective on current constraints
Try resolving the constraint with the resources you already have. This could mean:
- Reducing the WIP limit of the process state
- Reallocating team members to work on the constraint from process states with more capacity
- Having team members swarm problematic tasks
- Changing the Class of Service policies for expedited tasks
- Adjust WIP limits for different Swimlanes or Classes of Service
Next, align all other non-constraint steps to support improving the constraint. This is most important in the upstream and downstream states:
- Upstream: the constraint step should never be starved for input. Work should be ready as soon as the team working on the constraint step have capacity to pull it through. (Note: work should never be pushed through by management!)
- Downstream: work should never remain idle in the constraint step once it has been finished. The downstream state must have enough capacity to pull finished work through.
Keep your entire team focused on resolving the bottleneck, re-prioritising their other tasks if necessary.
If exploiting and subordinating have not been enough to resolve the constraint, you should then look at increasing your capacity.
- Get feedback from your team during Kanban meetings and put forward ideas during Strategy Reviews and Operations Reviews.
- Hire extra staff or give existing staff additional skills training
- Look into new software, tools and/or equipment
Remember to only move to the Elevate step if you are absolutely sure you can’t make use of your existing resources.
Verify that the bottleneck has been resolved. If the constraint has truly been improved and the limiting factor removed, your total throughput will increase. If the constraint has been resolved, go back to step 1 and identify the next constraint. If there is no increase in throughput, either the constraint has not been sufficiently improved or the limiting constraint was not properly identified.
WE UNCOVER THE EFFICIENCY OF YOUR WORKFLOW
Optimise your performance with Kanban analyticsExplore Your Data Now
A great aspect of applying the Theory of Constraints is that remarkable improvements are possible with a relatively low investment. The first constraints to be eliminated – the low-hanging fruit – are typically solved by making changes in working policy and processes.
Another benefit of ToC is focus. In the same way that WIP limits in Kanban ensure tasks are completed before work can start on new tasks, focusing on one constraint at a time is a more efficient approach than taking on every problem at once. Focusing on too many constraints at a time also increases the risk of the issue being passed back and forth, rather than actually being resolved.
Combining the principles of the Theory of Constraints with the Kanban Method makes it easy to locate system constraints and determine their root cause – eliminating waste and increasing throughput.
What constraints have you identified in your processes? How were they improved or eliminated? Has the Theory of Constraints positively impacted your business? Tell us about your experience in the comments!
Meet the Author
Sonya Siderova is a passionate product manager and a driving force behind Nave, a Kanban analytics suite that helps teams become more efficient through data-driven decision making. When she's not catering to her two little ones, you might find Sonya absorbed in a good heavyweight boxing match or behind a screen crafting a new blog post.
We help you increase your performance, identify problems with ease and focus on improving workflow efficiency. Choo… https://t.co/jsxa4GMc5TFollow
To make your processes more efficient, first you need to identify where you are falling behind. Learn how to recogn… https://t.co/PiVxLY7CRJFollow
Business agility is changing about outside IT. Agile Kanban Istanbul presents the opportunity to increase the densi… https://t.co/WD2ABPmJkuFollow
Detailed practitioner view on how to handle a true complex customer centric problems through business agility… https://t.co/KHIYHNgqWEFollow
Find out how maintaining a Kanban pull system and using analytics to spot bottlenecks early, prevents project delay… https://t.co/EPdBviI2nNFollow
Track your current tasks in progress. Review the state of your process in the past. Learn more about Aging Chart fo… https://t.co/ZD7zwt50vPFollow
Get the most out of your Kanban system with our expert tips and guidelines for Kanban teams.… https://t.co/J1Wg3RlQr3Follow
Successful project managers are effective leaders whose decisions will drive a business forward. Here are the top 5… https://t.co/L7KSJNgvmcFollow
This is a story of a failed Kanban adoption and what could have been done to prevent the failure.… https://t.co/TbrQuFKbOhFollow
Nave's Kanban analytics for Jira allow you to build immersive charts from your existing data so that you observe an… https://t.co/snPPY0J8pxFollow
Prioritization in Kanban backlog revolves around your customer value and business needs. Find out how to grow as a… https://t.co/tqK9i9f96fFollow
Learn about the key issues around employee engagement, motivation and how to increase discretionary efforts in your… https://t.co/zi3dG5xXtfFollow
All of our plans come with unlimited users, real time updates, and complete board history sync. Any plan is free fo… https://t.co/vYoylZicPCFollow
Businesses with higher levels of team motivation perform better for a simple reason: they appreciate their employee… https://t.co/vndEHMTQyUFollow
Hear dozens of tips and tricks from Capital One Innovation Lab about how they use Kanban techniques to generate pow… https://t.co/Q3fcJUT1XbFollow
Learn about Kanban’s core practices in a gripping story about suffering and achievement. Get ideas about how you ca… https://t.co/oUCCtCmpR4Follow
Are you looking to improve your team performance, but find yourself held back? Throughput measures your team’s capa… https://t.co/G3ZLrpAxLoFollow
Take your team to a whole new level with Nave's Kanban analytics for Trello. Picture what's going on behind your da… https://t.co/BLkkibV7KGFollow
CFD for Asana has advanced chart overlay that shows the number of tasks in progress for the last 6 months.… https://t.co/DdJuVBPhAcFollow