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What is the Theory of Constraints?

Conceptual thinking
Edited on Aug 23, 2021
2 Answers
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Anonymous A asked on Aug 22, 2021

I read through some articles but couldn't grasp the essence of the theory.

Are any coaches familiar with the Theory of Constraints?

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Pedro
Expert
updated an answer on Aug 23, 2021
Bain | EY-Parthenon | Roland Berger | Market Sizing Expert | 30% discount in Feb & March

If you have time, there are several videos available about the book “The Goal”, where the concept was initially introduced (including a video with the whole story). It is also a great read.

In short, the theory says that if you need to improve a system / process capacity, you should look for the most limiting factor. If you have a fashion store and want to increase capacity, what do you need:

  • More area? (i.e. you can't fit more customers inside right now?)
  • More inventory? (i.e. customers want to buy but products are not avilable?
  • More salespeople? (i.e. to help out the customers)
  • More dressing rooms? (i.e. so more customers can try out the clothes)
  • More cashiers? (i.e. to speed up payment)

How to you know which one do you need? Look into the process (in this case, the purchasing process), and check where you have “inventory” piling up (in this case, customers). Is it outside the store, in the dressing room, in the cashiers, etc.? 

No customers waiting? Well, in that case you have spare capacity in the store and could deal with more customers. ;) In that case, the constraint to higher sales is not having enough customers coming in.  ;)

Note: I would not expect this to come up in a case.

(edited)

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Ian
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Content Creator
replied on Aug 22, 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi there,

I'm curious as to why you're asking (this won't come up in a case), but in general it's about identifying your most pressing constraint/issue, resolving it, then moving onto the next.

A lot of these concepts are not dissimilar from Lean, Six Sigma, Agile, etc. etc. Ultimately, it's about removing blockers/bottlenecks in order of highest priority.

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