The conceptThe concept of the TOC can be summarised as:• Every system must have at least one constraint. If it were not true, then a real system such as a profit making organisation would make unlimited profit. A constraint therefore, "is anything that limits a system from achieving higher performance versus its goal" (Goldratt, 1988, p. 453). • The existence of constraints represents opportunities for improvement.Contrary to conventional thinking, TOC views constraints as positive, not negative. Because constraints determine the performance of a system, a gradual elevation of the system's constraints will improve its performance. The TOC has two major components. First, a philosophy which underpins the working principle of TOC. It consists of the five focusing steps of on-going improvement, the drum-buffer-rope (DBR) scheduling methodology, and the buffer management information system, and is usually referred to as TOC's "logistics" paradigm. The second component of TOC is a generic approach for investigating, analysing, and solving complex problems called the thinking process (TP). In addition, TOC prescribes new performance measurements which are quite different from the traditional cost-accounting system. We discuss these components in the following sub-sections.
PhilosophyThe working principle of TOC provides a focus for a continuous improvement process. The principle consists of five focusing steps (Goldratt, 1990b, p. 5) which are summarised in Figure 1. The steps are:(1) Identify the system's constraint(s). These may be physical (e.g. materials, machines, people, demand level) or managerial. Generally, organisations have very few physical constraints but many managerial constraints in the form of policies, procedures and rules and methods (Goldratt, 1990b). Recently, Goldratt (1993 developed a technique called a Current Reality Tree to identify policy constraints. It is important to identify these constraints and also necessary to prioritise them according to their impact on the goal(s) of the organisation.(2) Decide how to exploit the system's constraint(s). If the constraint is physical, the objective is to make the constraint as effective as possible.A managerial constraint should not be exploited but be eliminated and replaced with a policy which will support increased throughput. (3) Subordinate everything else to the above decision. This means that every other component of the system (nonconstraints) must be adjusted to support the maximum effectiveness of the constraint. Because