The Theory of Constraints
The theory of constraints (TOC) is a systematic management approach that focuses on actively managing those constraints that impede a firm’s progress toward its goal of maximizing profits and effectively using its resources. The theory was developed nearly three decades ago by Eli Goldratt, a well-known business systems analyst. It outlines a deliberate process for identifying and overcoming constraints. The process focuses not just on the efficiency of individual processes but also on the bottlenecks that constrain the system as a whole. The process improvement team in the opening vignette followed this theory to improve Microsoft’s operations.
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