The Constraints Theory?

What is The Constraints Theory?

Constraints are the factors that prevent the performance of the business in line with its development and achievement of profit-oriented goals. Constraints are defined as barriers that restrict any system from performing better on its goals. The Theory of Constraints is defined as “a management approach that focuses on continuous improvement through the management of constraints”.

Based on these definitions, performance criteria in the organizations are classified as financial criteria and activity criteria. Constraints are basically grouped under two headings: internal constraints (such as capacity limitations, the behavior of managers and workers, logistics or management policies) and external constraints (such as market demand or supplier constraints).

The theory of constraints is a management approach that argues that constraints should be managed to eliminate their negative effects on a business's performance-limiting effects. This theory considers the system as a chain, and each time the weakest link in the chain is called the "constraint". It envisages focusing the constraint on the system elements on which it depends.

The Theory of Constraints is a management technique developed from the optimized production time system. In the theory of constraints, parts of the system are examined as a whole, not as independent processes. The system is a whole and all its parts are interrelated. The Theory of Constraints is based on the "weakest link" principle. The Theory of Constraints improves performance in a system by focusing the attention of management on the constraints of the system. The main purpose of the Theory of Constraints is to establish the continuous improvement process in the enterprise through simultaneous production. The concept of simultaneous production is defined as the systematic method of moving materials through efficient resources in order to respond to market demands.

The Theory of Constraints is predicated on the following seven basic assumptions.

i-The main goal for businesses now and in the future is to make money.

ii-Profit contribution of sales is calculated by deducting variable material and energy expenses from sales revenues.

iii-Every business has at least one constraint that constrains expenses.

iv-There are three basic types of resources in businesses.

a) Scarce bottleneck resources,

b) Non-bottleneck resources,

c) Capacity-constrained resources

v-Many manufacturing processes have only one or a few constraints, so they are simple to control.

vi-There are dependent events that cause interaction between resources and products, so a bottleneck in one resource affects the efficiency of other resources.

vii-By identifying the bottlenecks of the production system in terms of resources must be balanced with non-bottleneck resources.