Holly S Glennon, your comment reminded me of the following Procurement Insights post from this past fall – https://bit.ly/3BgUVyy
The numbers and case studies suggest that unless we adopt a human-led agent-based development and implementation model, the generational failure rates of previous technology breakthroughs will continue or even increase in the AI era and beyond.
To create some additional context, here is an excerpt from a 2008 post:
What is interesting is that the basic principles of TOC, which are centered on a Convergency-Consistency-Respect axiom, actually touch on the periphery of the foundational elements of an agent-based model in which the synchronization of seemingly disparate elements are a reflection of the real-world processes that defines the organization. The reverse if you will of the TOC’s five step program.*
With all due respect to the late Dr. Eliyahu Goldratt using the agent-based model, the Theory Of Constraints five-step program should actually start at Step 5 and then progress backward through steps 4, 3, 2, and 1.
UNDERSTANDING THE ORIGINAL ORDER OF THE TOC FIVE STEPS
The Theory of Constraints (TOC) Five-Step Process, also known as the Five Focusing Steps, is a systematic approach developed by Dr. Eliyahu Goldratt to identify and address the most critical limiting factors (constraints) within a system to improve performance. The core principle of TOC is that every system has at least one constraint that determines its overall output, and by optimizing that constraint, significant improvements can be achieved.
The Five-Step Process of TOC:
Step 1: Identify the Constraint
- The first step is to find the bottleneck or the factor that limits the system’s ability to achieve its goal.
- In a business context, the constraint could be:
- A production bottleneck in manufacturing.
- A slow supplier in procurement.
- A skill shortage in human resources.
- A technology limitation in IT systems.
- Example: If customer orders are delayed because a particular machine in production has the lowest capacity, that machine is the constraint.
Step 2: Exploit the Constraint
- Once identified, the next step is to maximize the utilization of the constraint without additional investment.
- This means ensuring the constraint is operating at its highest efficiency by eliminating waste and improving processes around it.
- Actions may include:
- Reducing downtime.
- Prioritizing work that goes through the constraint.
- Ensuring high-quality inputs to prevent rework.
- Example: If a slow approval process is the constraint in procurement, optimizing workflows, reducing paperwork, or automating approvals can help.
Step 3: Subordinate Everything Else to the Constraint
- Adjust and align all other processes to support the performance of the identified constraint, ensuring nothing interferes with its efficiency.
- This step ensures that other parts of the system do not overload or create unnecessary work that overwhelms the constraint.
- Actions may include:
- Synchronizing workflows with the constraint.
- Changing scheduling priorities.
- Adjusting resource allocation to complement the constraint.
- Example: If a slow supplier is the constraint, adjusting production schedules to align with delivery times can prevent excess inventory buildup.
Step 4: Elevate the Constraint
- If the constraint is still limiting the system after exploitation and subordination, then it must be upgraded or expanded.
- This step may involve investments in additional resources or significant process improvements.
- Actions may include:
- Hiring more staff.
- Investing in new technology or equipment.
- Expanding supplier partnerships.
- Example: If a specific manufacturing machine is a constraint and cannot meet demand, purchasing an additional machine might be necessary.
Step 5: Repeat the Process (Go Back to Step 1)
- Once the current constraint is resolved, a new one will likely emerge elsewhere in the system. Continuous improvement requires repeating the process.
- The goal is to maintain an ongoing cycle of identifying and addressing constraints to enhance overall efficiency.
- Example: After addressing a production bottleneck, the new constraint might shift to logistics or distribution.
Benefits of the Five-Step TOC Process
- Increased Efficiency: Focuses on maximizing throughput with existing resources.
- Cost-Effective: Initial improvements can be made without large investments.
- Continuous Improvement: Encourages a proactive approach to process optimization.
- Improved Decision-Making: Helps organizations prioritize efforts effectively.
- Better Customer Satisfaction: Reduces delays and improves service delivery.
Common Applications of TOC in Different Industries
- Manufacturing: Improving production flow by identifying machine bottlenecks.
- Supply Chain Management: Streamlining supplier performance to meet demand.
- Project Management: Optimizing resource allocation to avoid bottlenecks in project timelines.
- Healthcare: Reducing patient waiting times by improving critical processes.
- Procurement: Optimizing vendor selection and approval workflows to avoid supply delays.
Challenges in Implementing TOC
- Resistance to Change: Employees may resist changes to processes or workflows.
- Difficulty in Identifying Constraints: Sometimes, constraints are hidden or misidentified.
- Balancing Short-Term vs. Long-Term Goals: Immediate optimization may conflict with strategic objectives.
Conclusion
The Theory of Constraints Five-Step Process provides a structured and effective approach to improving system performance by focusing on the most critical limiting factor. By continuously identifying and addressing constraints, organizations can enhance productivity, reduce waste, and achieve their goals more efficiently.
TODAY’S TAKEAWAY
Reversing the original five-step TOC order is another gateway to understanding the agent-based development and implementation model.
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Procurement Insights 
Youcef Dridi
February 22, 2025
There’s a flaw in the author’s suggestion to reverse TOC steps :
While this reasoning has merit in terms of systems thinking and strategic alignment, it does not negate the fundamental requirement of identifying constraints first in order to address them effectively.
Here’s why reversing the steps may not be practical:
1. Constraints Are Context-Specific:
Without identifying the current constraint (Step 1), it’s impossible to know where to focus efforts for exploitation or elevation. A system cannot be optimized holistically unless its limiting factor is clearly understood.
2. Steps Are Interdependent:
Each step builds on the previous one in TOC. For example, you cannot elevate a constraint (Step 4) if you haven’t first exploited it (Step 2) or subordinated other processes to it (Step 3). Skipping these foundational steps risks wasting resources on non-constraints.
3. Practical Implementation Challenges:
In real-world applications, starting with Step 5 could lead to analysis paralysis or misaligned priorities because organizations might focus on theoretical outcomes rather than actionable bottlenecks.
piblogger
February 22, 2025
Thank you for your thoughful comment, Youcef.
I will provide an immediate answer and then follow it up with added research.
The reason I suggested the reverse is that in its current sequential order, it is myopically focused limited to a single constraint.
Why is this a problem?
The Theory of Constraints (TOC), introduced by Dr. Eliyahu Goldratt, is a management philosophy that identifies the most critical limiting factor (constraint) hindering the achievement of a goal and systematically improves it. While TOC has been effective in various industries, its application in ProcureTech initiatives has faced challenges, leading to less than optimal outcomes.
While the TOC offers valuable insights, its traditional application may not fully address the complexities and dynamic nature of modern ProcureTech environments. Adapting TOC to consider multiple constraints, fostering organizational buy-in, accurately identifying critical limitations, and ensuring integration with contemporary technologies are essential steps to enhance its effectiveness in digital procurement transformations.
From my point of view, Step 5 is more in line with taking a broader view of contraints, e.g., the recognition that there is more than one constraint, addressing contraints with regard to overall efficiencies, and the recofnition of simultaneous and related contraints with stakehold within and external to the enterprise.
delightfullyeclectic0fefd43f78
February 23, 2025
Piblogger,
The claim that TOC is “myopically focused on a single constraint” misunderstands its iterative nature. The process explicitly recognizes that once one constraint is addressed, another will emerge, necessitating a return to Step 1.
This cyclical approach ensures that all constraints are addressed over time, not just a single one. The TOC Five-Step process is sequential for a reason:
Reversing this order would lead to inefficiencies, such as investing resources in non-critical areas, or attempting to address multiple constraints without understanding their interdependencies.
TOC assumes that every system has one dominant constraint at any given time. Addressing multiple constraints simultaneously dilutes focus and risks suboptimal results because resources are spread too thin.
Practical Challenges in Reversing Steps
Reversing the steps would create practical issues:
Starting with Step 5 (Repeat) assumes prior constraints have been addressed, which contradicts the need for initial identification and exploitation.
Elevating constraints (Step 4) before exploiting them could lead to unnecessary investments without fully utilizing existing capacity.
Complexity in Modern Environments
While it is true that modern environments like ProcureTech are complex, this does not justify reversing TOC’s process. Instead, adaptations can be made within the existing framework to account for dynamic conditions, such as using advanced tools for constraint identification or involving cross-functional teams for better alignment.
In my practice, I implement and deploy TOC based digital twins of the businesses I am helping to address such levels of complexity.
piblogger
February 23, 2025
Thank you for taking the time to share your thoughts.
Did you have an opportunity to read my reply to Youcef Dridi in this same discussion stream?