Theory of Constraints—Types of Constraints (internal/external)


The Theory of Constraints is part of the material on Lean Principles that is covered in the Certified Six Sigma Green Belt material (chapter 3 of the primer put out by the Quality Council of Indiana).   The next few posts including this one will discuss this theory by explaining its components.  All of these were presented by our instructor in our Green Belt Six Sigma class; for more details, one online resource I found that is reliable is www.leanproduction.com.

  1. What is a constraint? (internal/external distinction)
  2. Three measures of a system (throughput, inventory, operating expenses)
  3. Five focusing steps (Identify, Decide, Subordinate, Elevate, Repeat)
  4. Three questions of Thinking Processes (identifying and analyzing constraints)
  5. Tools or “Trees” (formalizing Thinking Processes) (Current Reality, Evaporating Cloud, Future Reality, Strategy and Tactics)
  6. Drum-Buffer-Rope (relationship of production to constraints)

1. Theory of Constraints—Introduction

The Theory of Constraints is a theory developed by Dr. Eliyahu Goldratt, who popularized it in his novel The Goal, first published in 1984. The basic principle behind the Theory of Constraints could be summed up in the saying that “a chain is at strong as its weakest link.” In a manufacturing process, the link that is weakest is the constraint or bottleneck.

2. Types of Constraints (Internal/External)

Let’s start with the explanation of a constraint. A constraint is that which keeps a system from achieving more of its goal. If you are a manufacturer creating a product, then a constraint would be that which prevents you from selling more of your product.

What’s the reason for your not being able to sell more of your product? There are two general answers to this question:

  1. There is not sufficient demand in the market to match the supply of your product.
  2. There is not sufficient supply of your product to match the demand in the market.

In the first case, the source of the constraint is in the market, which is external to your organization, so it is called an external constraint.

In the second case, the source of the constraint is in your organization, so it is called an internal constraint.

Another way to look at this is with the diagram below. In comparing supply and demand, one of them is going to be greater than the other (except if they exactly balance each other and there is therefore no constraint). Whichever one of them is smaller is the constraint. If the constraint is the demand, that comes from the market, so it is external, and if the constraint is the supply, that comes from the organization, so it is internal.

3. Types of Internal Constraints

There are three types of internal constraints. The way the equipment is used may be limiting output, the training and/or mindset of people could be preventing the system from producing more, or it could be the policy
of a company that is the real source of the system not being able to achieve its goals.

How do you identify which of the constraints is the one that is preventing your organization from achieving its goals? There are measures of a system which may help provide clues, and that is the subject of the next post.

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