The general principles of TOC can be applied to improve the performance of service organizations. A classified model is proposed for such applications based on Schmenner’s classification of service organizations. The flow of “material”, inventory and throughput is identified at various service organizations of the four quadrants of the service matrix. The definition of these terms might be dependent on the service. Since system constraint is at the heart of TOC, the recognition of the nature of organization constraint is the first step towards continuous improvement.