The historical and today background of theory of constraints
Theory of Constraints (TOC) is a management philosophy which is focused on the weakest ring(s) in the
chain to improve the performance of systems. Companies, whether they are in the production or service
sector should be more focused on understanding their own structure in terms of processes to survive in
a global competition. In this situation, TOC becomes an important problem structuring and solving
methodology which changes the way of thinking of managers. Since the TOC first put forth by Goldratt
(1984) in his novel The Goal, the theory has drawn wide attention from practitioners and academic
researchers.
In the quest to improve manufacturing performance, a number of broad-based operations management
philosophies, e.g. total quality management (TQM), just-in-time (JIT), or lean manufacturing (LM),theory
of constraints (TOC), and more recently, six sigma (SS) and supply chain management (SCM) have been
proposed in the literature and are being implemented in practice. It is widely held that the successful
implementation of these philosophies requires systems thinking, functional integration, and flatter
organizational structures. From the operations manager’s perspective, these practices require managers
to work on cross-functional implementation teams and participate in cross-functional decision-making
processes.
Many believe that TOC does not contribute anything new because you can accomplish virtually the same
thing with the linear programming (LP). While this is understandable, given the importance of
constraints for both, it is important to understand the differences. TOC is a manufacturing philosophy,
just as just-in-time (JIT) or total quality controls (TQC) are manufacturing philosophies. Linear
programming (LP) is a specific technique.
Theory of constraints
Theory of constraints is an example of management philosophy built upon a limited number of
assumptions and designed to provide a process of continuous ongoing improvement. The assumption
forming one foundation of TOC is that a system’s outputs are determined by its constraint(s).
Assumptions forming another foundation are new definitions for throughput, inventory and operating
expenses. These definitions are designed to support the goal of the organization. In a manufacturing
environment the goal is to make money, now and in the future. Throughput, inventory, and operating
expense are measures used to assess performance toward this goal.
Nowadays, companies struggle to survive in a global competition. Every company tries to find the best
philosophy which is suitable with their strategy to gain any and every advantage among their rivals.
Companies should be more focused on understanding their own structure in terms of processes
whether they are in the production or service sector. In this situation, Theory of Constraints (TOC)
becomes an important theory which focuses on the weakest ring(s) in the chain. TOC views processes as
they are rings of the same chain instead of thinking they are independent from each other. At the same
time, theory focuses on the weakest points which are bottlenecks for the entire company and try to
determine the relationship of these bottlenecks. Therefore, this integrated management philosophy
changes the way of thinking of managers and become an important tool for solving root problems.
Originally TOC is used to plan the production process and allocate resources but its content is improved
day by day as the technology evolves and competition between rival companies increases in business
world.
Nowadays it can be used a kind of management philosophy and can be integrated with cost accounting
system. It is not of importance which sector your company belongs because TOC is actually based on
system improvement. Since 30 years, TOC is successfully implemented by almost every sector and with
almost every size of companies.
TOC is based on the idea that every system has at least one bottleneck which can be defined as any kind
of situation that impedes the system to reach high performance level in terms of its purposes (Goldratt,
1990). In literature there are several studies to understand this management philosophy in detail. In
their study Watson et. al. (2007) stated that to better understand the historical evaluation of TOC it can
be useful to separate its evaluation into five eras; (i)The optimized product technology era, (ii)The goal
era, (iii)The haystack syndrome era, (iv) The it’s not luck era and (v)The critical chain era (Watson et.al.,
2007). This classification is useful to see how this philosophy evolves through time and how the main
point of TOC researches evolves.
In literature initial studies generally focused on optimized production technology which is improved by
Goldratt in 1980s. On the other hand when the book named “The Goal” published in 1984, studies about
TOC were rapidly increased and researchers started focus on the architecture of drum-buffer-rope. After
the importance of TOC is realized by academicians and managers, studies started to focus on TOC
measures, thinking processes which is one of the most important tool of TOC and project management
and etc. Recently, after almost 30 years TOC is still one of the greatest strategies for companies.
Bibliography

Aggarwal1985 S.C Aggarwal: Harvard Business Review, 63(5) (1985), pp8-16.


Alex Coman, et al. Production outsourcing: A linear programming model for the Theory-OfConstraints Volume 38, Issue 7, 2000
Chase Jacobs, Operational and Supply Chain Management 13th Edition, pp

International Journal of Operations & Production Management Vol. 28 No. 10, 2008, pp. 9911012.

International Journal Production Research Vol. 30, No.6, 1992, pp1471-1478.

Jaydeep Balakrishnan, et al. Discussion: Theory of constraints and linear programming: A reexamination Volume 38, Issue 6, 2000
John H. Blackstone Theory of constraints - A status report Volume 39, Issue 6, 2001
L. D. Fredendall, et al. Improving the product mix heuristic in the theory of constraints Volume
35, Issue 6, 1997
M. S. SPENCER, et al. Optimum production technology (OPT) and the theory of constraints
(TOC): analysis and genealogy Volume 33, Issue 6, 1995
Shafer, S. Mand J. R. Meredith. 1998. Operations Management: A Process Approach with




Spreadsheets. New York: John Wiley & Sons.
1. Introduction
To do so, managers need a common language, the language of theory (Handfield and
Melnyk, 1998). Areas such as marketing, finance, strategy, and organizational
behavior are well grounded in theory-development methods but the need for
theory-building, testing, and modification in operations management (OM) has been
widely recognized (Meredith
et al.
, 1989; Flynn
et al.
, 1990; Swamidass, 1991;
McCutcheon and Meredith, 1993).
Westbrook (1995) suggested that OM academics must embrace creative tension
between theory and practice and must develop new theories from the observation of
actual practices. Theory development remains the most fertile research area in the field
of operations management (Westbrook, 1995; Pannirselvam
et al.
, 1999). A number of
attempts have been made to develop and propose theories and theory-like principles of
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0144-3577.htm
Theory of
constraints
991
Received October 2006
Revised December 2006,
December 2007,
May 2008
Accepted May 2008
International Journal of Operations &
Production Management
Vol. 28 No. 10, 2008
pp. 991-1012
q
Emerald Group Publishing Limited
0144-3577
DOI 10.1108/01443570810903122
operations management. These attempts include: trade-off theory (Skinner, 1969), the
process-product matrix (Hayes and Wheelwright, 1979), the customer-contact model
(Chase and Tansik, 1983), the TOC (Goldratt and Cox, 1984; Boyd and Gupta, 2004), the
cumulative theory (Ferdows and DeMeyer, 1990), the theory of production competence
(Cleveland
et al.
, 1989; Vickery, 1991), priority management theory (Westbrook, 1994),
the theory of TQM (Flynn
et al.
, 1994; Handfield and Melnyk, 1998), the theory of swift
and even flow, and the theory of performance frontiers (Schmenner and Swink, 1998).
This list is not exhaustive but rather an attempt to highlight major initiatives
undertaken in the academic OM literature. Schmenner and Swink (1998) further
suggested that these theories in operations management should be carefully examined,
refined and, if warranted, abandoned.
In this paper, we examine the TOC as a unifying theory in operations management.
A significant number of journal articles have been written:
.
to trace the history of optimized production technology, the predecessor to TOC
(Goldratt, 1988; Fry
et al.
, 1992) as well as that of TOC (Gardiner and Blackstone,
1994, Watson
et al.
, 2007);
.
to review the basic concepts of TOC (Ronen and Starr, 1990; Fawcett and
Pearson, 1991);
.
to categorize TOC concepts and terms (Spencer and Cox, 1995);
.
to review TOC literature (Rahman, 1998; Balderstone and Mabin, 1998) and
successful applications (Mabin and Balderstone, 2003, Kim
et al.
, 2008);
.
to demonstrate applications of TOC in various areas such as SCM, enterprise
resource planning, sales and marketing, human resource management
(Blackstone, 2001), and strategic planning (Gupta
et al.
, 2004)
.
to highlight its current applications (Gupta, 2003); and
.
to place it among extant operations research/management science methodologies
(Davies
et al.
, 2005).
SUMMARY
Since initial work done by Goldratt in the mid-1980s and as the concepts related to the theory of
constraints (TOC) have become more developed, many have concluded that the TOC approach
offers nothing in addition to what can be accomplished through linear programming (LP).
Through the use of an example, this paper compares TOC to LP and clarifies the differences
surrounding the TOC philosophy and the LP technique
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DOI:
10.1080/00207549208942967
RICHARD LUEBBEa & BYRON FINCHa
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SUMMARY
Since initial work done by Goldratt in the mid-1980s and as the concepts related to the theory of
constraints (TOC) have become more developed, many have concluded that the TOC approach
offers nothing in addition to what can be accomplished through linear programming (LP).
Through the use of an example, this paper compares TOC to LP and clarifies the differences
surrounding the TOC philosophy and the LP technique
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Theory of constraints - A status report John H. Blackstone
(52)
Volume 39, Issue 6, 2001
o
Discussion: Theory of constraints and linear programming: A re-examination
Jaydeep Balakrishnan, et al.
Volume 38, Issue 6, 2000
o
Improving the product mix heuristic in the theory of constraints L. D. Fredendall,
et al.
Volume 35, Issue 6, 1997
o
Optimum production technology (OPT) and the theory of constraints (TOC):
analysis and genealogy M. S. SPENCER, et al.
Volume 33, Issue 6, 1995
o
Production outsourcing: A linear programming model for the Theory-OfConstraints Alex Coman, et al.
Volume 38, Issue 7, 2000
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