The Theory of Constraints (TOC) is an important optimising technique that focuses on improving the throughput of work at the (usually) single bottleneck or constraint in the workflow.
This Menu draws together a number of the Profit Savvy articles on the subject for your convenience. One research project demonstrated that 89% of improvement in a manufacturing business came from the application of TOC.
There is usually very few, and often just one, thing that causes a logjam in your business.
This is true of many types of business; not just manufacturers of products.
There are a number of articles in Profit Savvy covering various aspects of this important topic. We gather them together her for your convenience when learning how this important optimizing technique can improve your business.
Introduction to Theory of Constraints (TOC)
Our introduction to TOC article is Theory of Constraints (TOC) and you should read this first to gain an understanding of the concept.
Then read it again and maybe again until the remarkable simplicity and impact of the TOC concept is burnt into your mind.
TOC needs to become an ingrained habit so that you are always looking for the opportunities to dramatically improve your businesses throughput.
Main TOC Principals
Listed here are more detailed and specialist applications of TOC for you to choose from.
Drum, Buffer, Rope
These are three technical concepts for implementing TOC effectively once you have learnt to find the constraint in your business.
They give you methods for tuning the workflow process to 'feed' the constraint in the most efficient manner so it always works at maximum throughput and therefore profitability.
80/20 and TOC
The amazing 80/20 Rule (see The Amazing 80/20 Rule Tool) is an optimizing technique that demonstrates that some parts of your business are up to 16 times more valuable than other parts. When the 80/20 Rule meets TOC, it is the Profit Savvy equivalent of Godzilla meets the Hulk!
See how these two techniques can work together here; 80/20 and the Theory of Constraints
TOC in Retail
Retailers probably don't think of themselves as a workflow business but this article shows that TOC can apply to them and how to take advantage of the technique.
TOC to Optimise Sales Funnel
The Sales Funnel is a well-known method of describing the several layers that a possible customer needs to pass through en route to becoming a customer. Each layer contributes more information about your business to the potential customer to encourage them to purchase. The Theory of Constraints (TOC) can show you the very first place you should look at in your Sales Funnel for maximum increase in sales.
Profit Savvy believes TOC is one of the fundamentals that every business person needs in their "toolkit" of skills.
The best way to grasp this concept is to try to apply it.
If you want to take most advantage of what you have been reading here, pause right now and identify the constraint in your business and think how you an take most advantage of it.
We are confident your time will be very well spent.