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 methodology 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 methodology 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 IT consultant 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 methodology is focus. In the same way that Kanban WIP limits 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 powerful visual tools of 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 an independent consultant who helps organizations manage their products more efficiently. She is a proud mother of a daughter and a son, and enjoys good food and heavyweight boxing championships. Sonya is a regular blogger and founder at Nave.
Are you always short on time and on budget, even though your team is motivated and skilled? Learn how our team at N… https://t.co/X689iUIVVCFollow
Large teams and complex projects face a common issue – the Kanban board becomes cluttered and hard to read. Learn h… https://t.co/SrMVqGjvV1Follow
Have you felt like your team is always busy, but nothing is ever quite finished? WIP limits in Kanban stop tasks ge… https://t.co/1K2PxVupKOFollow
Explicit policies in Kanban reduce the risk of productivity breakdowns and escalations of tasks. Learn how to boost… https://t.co/95u0itdVGVFollow
Are long cycle times holding your business back? By following these tips and integrating data-driven analytics into… https://t.co/Z72iNrrzz2Follow
Project managers are constantly balancing short-term responsiveness and long-term strategic planning. TTo give your… https://t.co/b2ymjJbehiFollow
In the same way that Kanban uses analysis and feedback loops to improve workflow efficiency, Kanban meetings aim to… https://t.co/vQB3xtCrezFollow
How did supermarket restocking techniques revolutionize project management? Learn the history of Kanban and how it… https://t.co/mrAppr9R9GFollow
Kanban processes improve by continuously making incremental changes. Effective changes are built upon data. In this… https://t.co/PXcCNewcdnFollow
Kanban can help you run your business better, make your processes more efficient and empower your team to accomplis… https://t.co/ELat3VvCyZFollow
High flow efficiency is vital to sustaining a scalable, productive business. Learn how you can calculate, analyze a… https://t.co/b8S5pojnb8Follow
What makes the difference between an effective daily standup and one that just wastes your team’s time? Our short g… https://t.co/fKBYqdO6QDFollow
Two Kanban roles, Service Request Manager and Service Delivery Manager have emerged to equip teams with important d… https://t.co/LrWhFIKGDOFollow
Predicting how long a task will take plagues project managers everywhere. Cycle time is an easy way to work out you… https://t.co/ep2TSISPDdFollow
Though it's easy to focus on less complex tasks first, neglecting work in progress can put your team at immense ris… https://t.co/dn2nJdiA57Follow