Theory of constraints (TOC)

Concept

A management approach by Eliyahu Goldratt which says that every system has one constraint that limits its output. Improving anything else does not raise output.

Description

The theory of constraints was developed by Eliyahu Goldratt and made known by his novel The Goal. Its central idea is that every system has at least one constraint, the resource that limits how much the whole system can deliver. An hour gained at the constraint is an hour gained for the whole plant. An hour gained elsewhere is mostly wasted.

The method works in five focusing steps: find the constraint, get the most out of it, align everything else to its pace, raise its capacity if needed, and then look again, because the constraint may have moved. In production the idea leads to a protected buffer in front of the bottleneck and to schedules built around it. It is the basis of drum-buffer-rope scheduling.

Related topics in brief

• iFAKT GmbH · Related to · Organization
  Stuttgart-based consulting company and software specialist for Industry 4.0, founded in 2001, that helps manufacturers plan and optimize production and logistics processes; developer of the Polaris software.
• Bottleneck (production) · Related to · Concept
  The resource or process step that limits how much work can pass through a production system in a given period; after a disruption the bottleneck can shift to another machine, inspection step, tool or person.
• Buffer management · Related to · Concept
  Deciding where to place buffers of stock or time in a production system and how big to make them, so that disturbances do not stop the bottleneck or the customer delivery.
• Constraint-based scheduling · Related to · Concept
  A production scheduling approach that places each operation on a real resource and time slot only when hard constraints such as machine capability, tooling, labor skills, material release and precedence are met, then compares feasible options against business objectives.
• Finite capacity scheduling · Related to · Concept
  Finite capacity scheduling plans production operations onto real resource calendars, treating each machine, person or station as limited, so conflicts between orders become visible instead of being left to the shop floor.
• Polaris Optimizer · Related to · Product
  Module of iFAKT Polaris that automatically generates optimized production plans under constraints such as resources, shifts, zones, qualifications and capacities.

Glossary

Experts and companies for this topic

• Mirko Peters · Microsoft MVP

Maintained by Mirko Peters (Microsoft MVP) · Last updated: 2026-11-11