Bottlenecks Theory vs. Theory of Constraints: Are They the Same Thing?

If you’ve spent any time around operations or supply chain teams, you’ve probably heard someone say, “We need to fix the bottleneck.”

And they’re not wrong.

But here’s where things get interesting: fixing a bottleneck isn’t the same thing as applying the Theory of Constraints (TOC) even though the two ideas are closely related.

We have already spoken about Theory of Constraints in this blog:

- Addressing bottlenecks

- Drum-buffer-rope

- The Goal

But it is worth explaining in detail the differences between Bottlenecks Theory and Theory of Constraints, but first: What’s a Bottleneck?

A bottleneck is simply the slowest step in a process, the part that limits how much your system can produce.

Imagine this:

• Production can make 1,000 units per day

• Packaging can only handle 600 units per day

Packaging is the bottleneck. It doesn’t matter how fast production runs, your total output is capped at 600 units.

Bottleneck theory focuses on identifying that slow step and improving it.

You might add labor, reduce downtime, upgrade equipment etc. The goal is to increase flow by fixing the slowest point.

Now: What Is Theory of Constraints (TOC)?

The Theory of Constraints, developed by Eliyahu M. Goldratt, takes this idea much further.

TOC says: Every system has one constraint that determines its overall performance, and here’s the key that constraint isn’t always a machine, it could be a policy, a forecasting method, a batch size rule etc.

TOC isn’t just about finding the slow step. It’s about managing the entire organization around whatever is currently limiting throughput and profit.

For example, imagine you increase manufacturing capacity, but sales can’t sell more product. The constraint was never production. It was demand.

Optimizing production in that case just creates more inventory.

TOC forces you to look at the whole system before investing time and money.
 
Fixing bottlenecks is good operations management, managing constraints is smart business strategy. One improves a step. The other improves the system, and in today’s volatile supply chain environment, systems thinking wins.