Definition

Theory of Constraints (TOC)

Part of the Business terms glossary:

The Theory of Constraints (TOC) is a philosophy of management and continuous improvement originally developed by Dr. Eliyahu M. Goldratt and introduced in a book called The Goal. The book, a novel, is often used in business classes. The story, which is told in first person narrative, is about a new plant manager who is given ninety days to turn things around and make the plant run successfully or the plant will close. The plant manager finds a mentor who asks questions that guide the manager -- and the reader -- to realize that every complex system has at least one constraint (bottleneck) and it's the constraint that determines the ability of the system to be successful.

Learn more:
This white paper from the Goldratt Institute provides an introduction to the Theory of Constraints and its thinking processes.

This was last updated in March 2011
Posted by: Margaret Rouse

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