While the Theory of Constraints originates from the manufacturing sector, its principles can be applied to almost any domain. The theory has many parts to it, but for simplicity's sake, we'll just focus on the main equation and terminology.
The ultimate goal of any development team is to increase feature throughput while decreasing issue inventory and operational costs. More throughput turns into making money, which is the ultimate goal of any business.
- Throughput - In Agile circles, this is commonly referred to as "velocity": the rate at which issues move from idea to done. Developers can attach "ponts" to issues to determine amount of work or complexity, but you should always look at indicators in terms of making more money. It also helps to create priority systems that elevate system constraints.
- Constraints - These "bottlenecks" are the greatest contributor to lost throughput. They can be people, processes, or just issues that clog up the works for some reason.
- Inventory - This is the amount of issues in the backlog plus work in progress and review. As the inventory of any stage grows, the preceding stage's issues become more irrelevant.
- Operational Costs - These can be employee salaries, infrastructure costs, and anything that reduces the bottom line.
When faced with a decision between options ask yourself:
"Which one will increase throughput while reducing both inventory and operational costs?"
You likely won't reach a quick answer, but just asking should lead you down the right path.
You can read this ADR to find out more.