Theory of constraints

In this lesson

1. 0:00 Theory of Constraints introduction
2. 0:52 Goldratt's five-step TOC methodology
3. 1:54 Identifying the bottleneck worked example
4. 4:24 Elevating the bottleneck capacity

About this lesson

You'll discover how to identify bottlenecks in your production process and apply Goldratt's five-step methodology to resolve them, a key concept for Performance Management and operational efficiency questions in your CIMA or ACCA exams. The Theory of Constraints centres on throughput: the rate at which products are sold and converted into revenue. By identifying which stage of production has the lowest capacity—the bottleneck—you can strategically allocate resources to that constraint and dramatically improve overall output. The lesson walks you through a practical example calculating production capacities across shaping, filling, and capping departments to pinpoint where the system slows down. Goldratt's five-step approach forms the backbone of TOC: identify the bottleneck, exploit it by maximising output, subordinate other operations to match its speed, elevate capacity through investment or process improvement, and repeat the cycle as new constraints emerge. You'll also explore practical methods for elevating bottlenecks—from investing in machinery and extending operating hours to improving labour training and reducing downtime—giving you concrete strategies to apply in case study scenarios and exam questions.

Duration: 6m