What is the Theory of Constraints?

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.

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.