What is the Theory of Constraints?

The theory of constraints is a type of management concept that looks at all obstacles to achieving more as being caused by a small number of different types of constraints. This theory can apply to any type of manageable system, but it is most commonly discussed when it comes to manufacturing, warehousing, and other related industries. 

A manager who follows the theory of constraints will always work to identify what the specific constraint is that is limiting their ability to make improvements. There is an almost endless list of different types of constraints that may be present, and the challenge is often narrowing down the list to identify the specific thing that is causing the issue in a given situation. 

To do this, the theory has managers use five focusing steps, which are: 

• Identify the constraints of a system
• Learn how you can exploit the constraints of the system
• Everything should be subordinated to the decisions made above
• Evaluate the system’s new constraints
• If the steps above are able to break a constraint, repeat step 1

While the specific constraints in a given situation can be any number of things, managers who are new to this theory will generally want to start by looking at some of the most common ones. The three higher-level categories of constraints that are most common are equipment, people, and policy. Each of those three categories can have many different specific constraints that limit a facility's ability to improve and optimize its production.