There is often at least one aspect of the system that is limiting it from achieving more of its goal. This theory is really a collection of methods for solving the problem of improving overall system performance.  It is called the theory of constraints because it is believed that any manageable system is limited in accomplishing its goal only because of a small number of constraints.  Although you may be able to lessen the amount of constraints there will at least always be one.

A constraint is described as anything that prevents a system from accomplishing its goal completely.  Constraints can be either internal or external to the system.  An internal constraint is evident when the market demands more than what the system can convey.  When this is the case the focus of the system becomes identifying that constraint and using the five focusing steps to potentially remove it.  People, equipment and policy are all examples of internal constraints to a system.  An external constraint on the other hand, exists when the system produces more than what the market will accept.  If this happens to be the case the organization should focus on ways to create more demand for its products or services.

The theory of constraints process seeks to identify the constraint and rebuild the rest of the organization around it by using the Five Focusing Steps.  The Theory of Constraints Process uses several steps which combine cause and effect, experience and intuition.  We can better interpret the world around us when we know how to think and by having better knowledge of how to do this we can then better understand how we can make room for improvement.  The steps for this process are as followed, first identify the resource or policy that prevents the system from obtaining its goal entirely.  Next is to decide how to harness that constraint and make sure it is worthwhile to investigate.  Third, align the whole system so that it supports the constraint that was selected.  Then it is necessary to evaluate the constraint and finally if the constraint has somehow moved or altered in any way it is necessary to return back to step one and start over.  In order to make the most of your goal it is essential that you correctly identify your constraints and follow through with them.

Goldratt’s theory is an overall framework for helping businesses determine the what to change, what to make the change to, and how to go about making this change.  According to Goldratt the only performance measures that matter are throughput or sales less material costs, operating expenses and inventory.  The ultimate goal is to increase the throughput by decreasing the operating expenses and inventory or a combination of all of these.  By identifying the leverage point, implementing some kind of simple but practical solution and by overcoming the fundamental resistance to change businesses are able to achieve ‘The Goal’ as Goldratt stated of eliminating constraints.