We off the following TOC applications:
Managing People—Winning Collaboration
Winning Collaboration builds four day-to-day management skills to get people working together in organizations facing change. Every manager and employee must be able to resolve conflicts, within and between departments and functional areas, in a win-win way that meets organizational goals. Another essential skill is in better understanding and preventing adverse effects that can occur from change—from implementing ideas that are not well enough thought through. A third skill is in being able to formulate project plans for change that incorporate significant concerns of team members and stakeholders. Finally, managers must increase their effectiveness with buy-in, meetings, and procedures. These are the skills that Winning Collaboration builds.
Sales—Selling the Compelling Marketing Offer
Compelling offers to the market do not sell themselves. To be effective, salespeople must overcome a root problem of many sales failures. This root problem is described in Neil Rackham’s book entitled SPIN Selling—the tendency to jump too quickly into solutions before the customer agrees with you about their issue. The TOC approach to sales rigorously works at overcoming the layers of resistance to change, through a formal process. Learning how to involve the customer and take a step-by-step approach, Salespeople go through extensive role plays to perfect the TOC sales skills.
The 4x4 Strategic Planning Process
This process creates a comprehensive strategy designed to meet the company’s goals. The techniques first build the commitment of all key members of the senior management team. Using Goldratt’s general analysis of each part of an organization and supply chain, the facilitator carefully translates this material to the participant organization. The first four days build, through a powerful combination of participant interaction and Goldratt lectures, a shared understanding of the cause-effect relationships across an organization. In the second 4 days, each executive defines their major problem blocking them from meeting the Viable Vision. The issues are analyzed using Theory of Constraints Thinking Process tools, and the collection of ideas that comprise the strategy is developed. The session concludes with a plan that designates the milestones necessary to accomplish the goals, the sequence, the responsibilities and estimated duration. Documentation of the entire effort, including a Critical Chain project plan, is provided.
The TOC Thinking Process and Five Focusing Steps
The TOC Thinking Process, in combination with the Five Focusing Steps, give an individual the ability to take any organization and improve it, making a significant contribution to that organization’s goals. An expert in these processes, or ‘Jonah,’ has the skill to analyze any situation and get others to buy-in to their logic. To learn and understand these processes, an individual must apply them with success to their organization or client. Furthermore, to avoid re-inventing the wheel, these methods should be used in conjunction with the applications of TOC already invented in the areas described above and below (i.e., production and distribution logistics, etc.). In a Viable Vision effort, these processes are used to deal with issues that do not have generic solutions. In most implementations, it is normal for such problems to arise.
The “Mafia” Offer
As Goldratt explains, Marketing is bringing the ducks to desire the corn in your field. In fact, if marketing is doing their job, the ducks should be sitting in your area with glue on their feet. Sales’ job is to shoot the sitting ducks. To create such a compelling offer to the market, Marketing people must analyze the undesirable effects that customers experience, NOT WITH YOUR COMPANY, but rather with the entire industry. The proposal is based upon overcoming industry-wide adverse effects. Such a scheme is never based on price reductions or inherent product modifications. The solution is intended to give a minimum two-year competitive advantage. It documents the components to enable salespeople to effectively overcome the layers of resistance to change in selling the solution to the market.
Throughput Accounting and Metrics
One of the keys to embedding new, positive behavior into an organization lies with financial reporting and measurements. A good measurement system must give every individual the tools to make correct, real-time decisions. Also, individuals must have simple, clear reports and information that show them the impact of their decisions on the goals of the company. TOC’s Throughput Accounting approach to achieving proper metrics and reporting does not replace existing accounting systems.
- Traditional systems are still used for external reporting.
- Throughput Accounting is used to help managers make better holistic decisions.
The primary metrics include the impact of any decision on Throughput, Investment, and Operating Expenses. Supply Chain metrics include Throughput Value Days and Inventory Value Days.
Information Technology—Necessary But Not Sufficient
Many companies made an enormous investment in technology over the past few years. How many CEOs have you heard bragging about their fantastic ERP and I.T. implementations and the incredible return on investment they provided? Annoyed CEOs are looking for the “sweet spot” of technology, and so are I.T. executives. However, I.T. and functional executives are often in conflict as they struggle to find common ground. Technology vendors are part of this battleground. TOC believes in the application of technology to help address the organization’s constraint. It asks a series of questions that help ensure that Technology is used in the right places and with significant changes in organization rules. This approach—changing rules to take advantage of changes in technology– helps to ensure the sufficiency of technology to yield outstanding, tangible results.
Critical Chain Project Management
After 40 years of Critical Path experience, projects are still frequently late, over budget and not within specifications. Critical Chain reveals new assumptions about human behavior and overloaded project environments and offers a breakthrough solution. Clients who have implemented Critical Chain claim that their project durations drop dramatically and that they can flow many more projects through without adding resources. Critical Chain uses a statistically sound method of protecting projects while removing harmful old metrics. The “Relay Runner Work Ethic” becomes the new way of project performance.
Production Logistics (Drum, Buffer, Rope)
Most people that face the daily challenges of a production environment blame their management problems on “Murphy.” Murphy occurs when, for example, suppliers deliver late or with poor quality, machines break down, tooling fails, and many other unanticipated problems occur. As illustrated in Dr. Goldratt’s best-selling book, The Goal, TOC proposes Drum, Buffer, Rope as a way to success in spite of “Murphy.” Through the application of the compelling Five Focusing Steps of TOC, clients claim to have reduced lead time by half, within a period of less than a year. Furthermore, the approach dramatically simplifies daily operations while providing a practical process of ongoing improvement on the shop floor.
Distribution Logistics
Establish a pull system, with just the right inventory in the right place at the right time. Increase total supply chain Throughput by reducing obsolescence, increasing shelf space variety, lowering stock-outs of favorite products and reducing lead time for replenishment. TOC’s distribution logistics provides a compelling alternative to the traditional “min/max” approach to inventory management. While significantly reducing overall inventories, the TOC Distribution Logistics method simultaneously raises the service level. Re-ordering is handled quickly and directly by rules, rather than by exception. Trends are noted and acted upon automatically, to reduce risk and increase sales across the supply chain.
