What is the theory of constraints? Complete guide with examples

Continuous learning is integral to product management, and the theory of constraints (TOC), though traditionally used in operations management, offers valuable insights that extend beyond its original manufacturing context. Developed by Dr. Eliyahu M. Goldratt, TOC identifies and addresses constraints within systems to enhance performance, applying its principles to areas such as B2B and SaaS product discovery. The TOC process involves identifying a system’s constraints, exploiting them to maximize efficiency, and adjusting all other processes to support these changes, enhancing overall system effectiveness. While it shares similarities with the lean cycle, which focuses more on learning, TOC emphasizes action and delivery, particularly in identifying and addressing customer constraints to improve product offerings. By engaging with customers to understand their pain points, product managers can tailor value propositions to exploit these constraints, thereby aligning product development efforts and communication strategies to deliver greater value. This approach can be especially beneficial in environments with low usage volumes or biased user demands, offering a structured framework for customer-centric product development.