Applying theory of constraints in administrative process: An experiment from the U.S. government

U.S. Federal Government contracting has continually been assailed for waste and inefficiency. After a failed technological solution from Enterprise Resource Planning (ERP) procurement, and several insufficient operational solutions such as Lean Six Sigma to improve process efficiency, senior management at United States Supply Services¹ (USSS) turned to the Theory of Constraints (TOC) after learning about its success in manufacturing. Over a two year period of 2008-2010, for the thirteen TOC implemented procurement divisions there was an average of a 46% improvement in contract award rates while in the three control divisions the improvement was only 8%. It was also found that information transparency, the ability to see how a product is transformed in the supply chain, is a key element of TOC success. This research adds to the TOC body of knowledge by showing its effectiveness in an administrative system in one of the largest Federal Government contracting organizations and the results can be generalizable to other public and private sectors.