Constraints Management
Your system has a constraint. That sounds bad, but it's good. It is the part of your system you can improve to get significant and nearly immediate results.
The Theory of Constraints focuses attention on the most loaded resource, the system constraint. Increasing the effective capacity of the constraint increases the output through the system. The constraint is also an indicator of the health of the system. If it is running well, the system is running well. If the constraint is struggling or stopped, so is the system. It's very easy to manage a complex system with only one resource to watch closely.
Production Management
A common manufacturing approach has been to pay attention to everything, and try to increase the efficiency of all of the individual system parts expecting to improve the whole. The primary effect seems to be to keep resources busy. Keeping busy is better at making inventory than money.
In the 1980s, the Theory of Constraints (TOC) was developed by Dr. Eliyahu M. Goldratt to describe a common characteristic of systems, and he created a methodology using that characteristic to improve performance. Every system has something that limits it, usually just one thing. Identifying and helping this system constraint will improve the output significantly. Improving any other part of the system will not increase throughput. [Throughput is Sales less Totally Variable Expenses.]
Think of a garden hose with a kink in it as shown in see Figure 1. Helping the kink will improve the output of that system. Helping any other part will not. [Well maybe 500PSI would temporarily help.]
Figure 1: Constricted garden hose
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Editor's Note
