Theory of Constraints (TOC)
On the Theory of Constraints (TOC)

Theory of Constraints (ТОС) is a philosophy of business (organization, system) management based on the understanding that business success (constant increase in profit) is predetermined by the effectiveness/efficiency of its constraints. It was developed in the 1980s by the Israeli scientist Dr E. Goldratt. TOC is for your business. Every company has a physical and/or logical constraint at a certain point of time. The ability to correctly identify such constraints, decide how to embrace them and fairly bring all the other parts of the system under this decision allows companies to increase their profits and strengthen market positions even in stagnant markets. TOC is based on common sense and teaches to focus. Manipulating a small number of aspects of the system produces an effect several-fold larger than the result of simultaneous manipulation of all or majority of the system problem areas, which are, in fact, only symptoms, and not the root problem. Check yourself: if you have been making certain efforts for a long time with null results and feel like “fighting fire”, this means that your efforts are put in the wrong direction.

Focusing on the essentials is the key idea of TOC. TOC approaches have been introducing around the world over the past 40 years, and companies that share the TOC paradigm do not only create a long-term competitive advantage, but also successfully capitalise it. Why are TOC solutions important for you? Almost every possible external factor of business growth is temporarily exhausted: sales markets have declined, external financing is still unavailable or costly, and consumers have become more discerning and demanding. Currently most businesses have a market constraint. To continue developing, companies should know how to work with this constraint.

Eliyahu Goldratt
31 March 1948 — 11 June 2011
Developer of Theory of Constraints (TOC), author of several bestsellers in the field of business non-fiction literature, Bachelor of Science in Physics of Tel Aviv University and Master and PhD of Bar-Ilan University
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