In 1983 Eli Goldratt wrote a novel about a plant manager fighting to save his plant and his marriage. 

The book was entitled The Goal and become a word-of-mouth best seller. Now available in more than 

20 languages it is believed to be the best selling business book of all times.

The Goal enabled thousands of companies to significantly improve their manufacturing operations 

by emulating the actions of the plant manger. It laid out five simple steps for management to follow 

and this approach became known as The Theory of Constraints (TOC).

1. Identify the constraint (s)

2. Decide how to Exploit the constraint (s)

3. Subordinate everything to the above decisions

4. Elevate the constraint (s)

5. If a constraint is broken go back to (1)

While the five steps were intended for use on many types of organizations, in reality they have been applied primarily in manufacturing operations. For the most part these companies focused on only the first three steps. They either recognized through intuition or discovered by experience that the changes necessitated by repeating the process were more than they could manage. Nonetheless, the gains from using the first three TOC steps have reportedly exceeded that of all the other improvement techniques combined.

In the process of implementing this approach in hundreds of companies we learned two important things. First, no company has a real physical bottleneck. There is always at least 25% more capacity that can be gained usually with little or no additional expense or investment. Often the untapped capacity available is much greater than 25%. Despite the lack of a real capacity constraint we saw companies get outstanding benefits by designating an operation as the constraint and applying the next two steps. Output surged, deliveries improved and lead times and inventories dropped. There was an obvious benefit to using some point to manage and control the flow of work, even if it wasn’t a real bottleneck.

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Once we had fully tested the value of such Control Points we modified the five steps to:

1. Select the Control Point

2. Squeeze everything possible out of the Control Point

3. Synchronize everything else to the above actions

These changes greatly simplified applying the TOC principles. The benefits were undeniable. In addition to experiencing a one time surge in output, companies found that they were now much more reliable and responsive than their competitors’. They also confirmed that they could produce additional product at essentially the cost of materials.