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 core concept, easy reading, wide application,
Last book from these authors, I have read all 4 of them and liked this one.
Easy to follow, self explanatory. I like the brief in supplementary section. You can connect it to TOC distribution solution or Lean multiskilled flexible worker and U-cell. | ||||||||||||
27 Ağustos 2014 Çarşamba
amazon review: The 3 Pig's Pooling
amazon review: The Emperor's S-curve
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 enigma in the heading, no result at the end,
This is third book I have read from these authors. I admit it is a nice idea to use old tales to increase awareness for readers who do not like reading much.
I also admit that the result is a disaster. The book itself is the old story, no added value at all. There is a supplementary section at the end trying to explain below issues: "sum of local optimas are not equal to global optima" subsystems could be organized in a broader system, like human body or a supply chain It is difficult to understand using S-curve to explain these. | ||||||||||||
amazon review: TOC Thinking: Removing Constraints for Business Growth
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 This is not a "how to" book but certainly "why to" book..,
Easy reading, focused on philosophy of TOC .
Most of the book is dealing with "what we need NOT TO DO" This is the other side of the same coin, we used to be advised "what to do". The important emphasis is these two sides are necessary to be successfull: **** we must do what we need TO DO **** we must stop what we need NOT TO DO The book also reveals the meaning of "constraint". Often there is a negative feeling attached to constraint. Actualy having a constraint is identical to having an opportunity to leverage our business. | ||||||||||||
amazon highlights: TOC Thinking: Removing Constraints for Business Growth / Yishai Aslag
TOC Thinking: Removing Constraints for Business Growth
by Yishai Ashlag
1 The Goal “The ultimate goal is to create harmonious and sustainable growth”
The starting point of this quest is not moving forward with the things we
should do, but rather stop doing the things we should not do. seeking to achieve the best results may prevent us from achieving a good
enough progress. The system’s constraint is actually the leverage point.
2 Dealing
with Uncertainty “Don’t force certainty on uncertain
situations.”
Accuracy gives us a false sense of security.
Since uncertainty cannot be eliminated, fluctuations in results are
unavoidable.
The right approach to mitigate the impact of uncertainty is to reduce the
supply time.
This is achieved by holding inventories in aggregation points along the
supply chain.
The notion is that the more detailed the plan, the less we leave to chance.
The detailed plan just gives us a false sense of accuracy and
predictability.
The combination of uncertainty and dependencies causes chance to be against
us.
3 Dealing
with Conflicts “The fear of ‘tug of war’ causes managers to
look for compromise instead of solutions.”
In general, we deal with three different types of conflicts:
1) internal
conflicts in situations where we face conflicting requirements to achieve our
objective;
2) conflicts
with other functions in the organization; and
3) external
conflicts with vendors or clients.
But optimization is not a solution. It is merely the best-known compromise
between the conflicting requirements. A solution calls for change in the supply mode, so with smaller inventories
we can support a higher level of availability. This typically calls for higher
frequency of replenishment coupled with holding inventory at aggregation
points. A solution is defined as finding a mode of operation that will satisfy both
needs.
4 Dealing
with Complexity “People fear complexity and admire
sophistication (perceived complexity), both of which have negative
consequences.”
Complexity slows us down by limiting our ability to use our intuition.
Breaking the organization into smaller units requires more synchronization
efforts, and thus increases complexity. It also promotes local optimum behavior, which makes the organization less
focused.
The right processes call for frequent introduction of new merchandise and
frequent replenishment, coupled with special emphasis on protecting the
availability of best-sellers only.
5
Sophistication “In the same way that accuracy is used to mask
uncertainty, sophistication is used to mask a fundamental misunderstanding of
reality. People have developed a fascination with sophistication, as it is
assumed to be a proxy for intelligence.”
We force certainty on uncertainty by excessive accuracy
We force compromise on conflict by excessive optimization
We force simplicity on complexity by excessive specialization
Excessive accuracy, optimization and specialization are the major elements
of any sophisticated solution. Sophisticated solutions tend to use statistical tools to provide accurate
answers. Sophisticated solutions also tend to use advanced math to solve
optimization problems.
Moreover, these solutions tend to address problems that are defined too
narrowly due to over-specialization.
For example: Trying to define the right end-of-season discount policy
instead of finding ways to prevent overstocking.
If you are approached with a sophisticated solution, you can be certain of
one thing: It is most likely a solution to someone else’s problem, not yours.
6 Management
Attention “Management attention is the ultimate constraint of the organization.”
Management attention is consumed by the effort to achieve the desired
results while dealing with three main challenges: Uncertainty, Conflicts, and
Complexity.
Too often we try to force the desired results in spite of the challenges,
rather than creating a reality in which these challenges are solved, or at
least better mitigated.
The problem with this approach is twofold. One, we leave the exposure to
uncertainty, the existing conflicts and the level of complexity untouched, and
as a result we limit the potential for improvement.
Two, as time goes by, the level of noise created by these challenges tends
to increase, and we find ourselves spending more and more time fighting the
fires that result from these challenges.
Every time we manage by functions and not by processes, we create more
conflicts like these.
7 Value “Value is created by removing a significant limitation for the customer,
in a way that was not possible before, and to the extent that no significant
competitor can deliver.”
The common definition of value is the ratio between the features and
benefits of the goods or service to its price. The question is, how do we know what exceptional value is?
The answer is that this kind of value is created by removing a significant
limitation in a way that was not possible before, and to the extent that no
significant competitor can compete with.
We must first and exclusively strive to understand the value we plan to
deliver, rather than think about how to protect our business.
There are four major layers of protection that are created in the pursuit
to deliver value: paradigm shift, leadership position, unique processes, and
benefits of scale.
In general, people do not like to go through paradigm shifts, as such
shifts take them out of their comfort zone.
8 Growth
Strategy—Viable Vision “Build, Capitalize and Sustain
are three elements that each growth strategy should contain.”
The first phase is all about preparation: Building the required unique
capabilities and assets that are necessary to deliver the exceptional value in
the right scale.
capitalization, is all about creating a successful business around unique
capabilities and the value they provide. To sustain the growth we have to prevent future roadblocks.
Providing more value without losing focus can be achieved when the company
concentrates on removing the same limitation to a higher degree over time.
9 Process “Process definition requires more than a series of action steps; it needs
clear documentation of the relevant whys and hows.”
As we strive for ongoing improvement, some existing processes have to be
challenged.
Process follow up is critical for success. But following it blindly is
dangerous.
There are two different kinds of logic that need to be documented along
with each process.
The first one is the logic behind every step in the process, or, in other
words, the reason that every step is needed.
The second rationalization addresses how a given process is in line with
the overall business strategy and the value the company aims to provide.
In order to properly document and audit the organization’s processes,
Goldratt introduced a logical tool known as the “Strategy and Tactic Tree,” a
logic tree that ties the organization’s strategy and its key processes
together.
The starting point—the highest level of the tree—is the organization’s
ultimate goal.
Every level down in the tree represents an intermediate objective toward
the organization’s goal, as well as the tactic used to achieve this
intermediate objective.
It usually takes six levels to fully describe the connection between the
ultimate goal and the complete set of processes necessary to achieve this goal.
the Strategy and Tactic Tree defines strategy and tactic as pairs in every
level.
In every level we ask what our strategy is—what is our objective and what
is the tactic we must use to achieve this strategy?
Necessary assumption: explain the need for this step and its strategy
Strategy: what is the objective or state of being this step is trying to
achieve
Parallel assumptions: explain why the tactic achieves the strategy. What
are the key assumptions that make the tactic effective?
Tactics: the mode of operation required to achieve the strategy.
Sufficiency assumptions: why there is a need to go another level down and
define another level of intermediate objectives. What is the main challenge in
creating the mode of operation as written in the tactic?
10 Focus “Focus is not just what to do, but mainly what not to do.”
Focus is not about just saying “yes” to the right things, but more
importantly saying “no” to many good opportunities we encounter.
first century Roman philosopher Seneca, who defined luck as an opportunity
that met preparation.
When we simplify reality and break it into fields of specializations, we
increase the chances of dealing with symptoms (undesirable effects) and not the
root cause (core conflict).
To have focus, we need to understand and define what the focal/critical
points of the system are.
11
Constraint “In management, constraint should have a positive meaning. It is the key
indicator for where and how to focus the organization’s improvement efforts.”
The right and consistent answer is that we should focus our improvement
efforts on improving our constraint. When the constraint is policy, we don’t look to exploit it but to change
it.
The vision of the CEO of this company is to turn the catalog into something
like a fashion magazine where the customers can buy what they see.
When there is a constraint in sales we have to understand the conversion
ratio of the different steps in the sales process. Having a constraint in marketing means that creating the required awareness
is the challenge.
When the market is the constraint, the attractiveness of our offer is the
limiting factor.
To keep the company stable while growing, the constraint should be kept
consistently at one place outside marketing or the market.
The constraint should be kept as a key process in the capitalization stage.
For example, in retail the constraint should not be in marketing (the chain
appeal or value offer), store format, merchandise management, or supply chain.
It should be in the pace in which the retailer can successfully open new
stores.
12 Flow “The primary objective of operation is flow.”
When we focus on the actions that fundamentally enhance the flow we are
likely to achieve all the above objectives. When flow increases, capacity also increases.
The first step in improving the flow is to take the right actions to
prevent overproduction and local efficiencies.
Once we cease making these mistakes, the next step is to focus on the major
disturbances in flow and remove them.
This will increase the system productivity as well as its flow. In order to
increase flow, three major concepts need to be implemented:
- A practical mechanism to indicate when not to produce must be established
- Local efficiencies must be abolished
- A focusing process to balance and improve the flow should be put in place
As Goldratt showed, the most intuitive basis for the mechanism to restrict
overproduction is not space or inventory but time: if one wants to prevent production ahead of time, one should not release
the material ahead of time.
The robustness of the time-based mechanism stems from the fact that it
directly restricts the overall amount of work in the system rather than
restricting the amount of work between any two workstations.
Restricting the amount of work between two workstations increases the
dependencies on the shop floor and thus makes it more susceptible to
noise/disturbances.
The time-based system also provides the flexibility required by many
industries, since the production floor is not committed to replenishing the
past demand.
The use of a time-based system requires that for each order we should
restrict the release of the corresponding material to an appropriate amount of
time before the due date of the order.
We need to choke the release of materials and release them later than we
used to, with a shorter time buffer than our current lead time.
A good time buffer will be one that commands a ratio of 5 to 1 between the
expected lead time and touch time. If we strive initially for a shorter lead time we may risk going to the
other extreme and starve the floor. We are also likely to have a hard time meeting our promised due dates.
Since the common lead time in many cases mandates a ratio of 10 to 1
between the lead time and the touch time, this means that in many cases to
prevent overproduction we need to cut the lead time by half.
This is very counterintuitive especially in environments that suffer from
poor due date performance to start with.
Cutting the release time by half is just the starting point
This is done by dividing the time buffer into three zones.
The color system also provides us a straightforward priority system.
Ford with space, Ohno with inventory, and Goldratt with time: here are
three different applications of the concept of preventing overproduction.
13 Bad
multitasking “Bad multitasking is the main blockage to flow
in high touch time environments.”
Bad multitasking prolongs the completion time of each task by three-to
fourfold.
Partial staffing (allocating a partial team for a task) is also a form of
bad multitasking.
Despite its massive negative impact, bad multitasking is the common mode of
operation.
To reduce the level of bad multitasking and improve the flow we have to
control the number of projects and tasks in the system.
There are four mechanisms that need to be put in place:
- Full kit; projects and major tasks like integration can be started only when their full kit is ready
- Freeze in the project level; since the current reality is that there are too many projects in the system, we need to discover what the reasonable number is and freeze the rest based on business priorities.
- Freeze in the projects’ leg level; starting all projects’ legs as early as possible also leads to artificial load in each project and on different resources. We have to release the leg based on a reasonable buffer so each leg will not delay integration with the critical chain and unnecessarily prolong the project’s completion.
- Freeze in the tasks’ level: limit the number of open tasks a resource can have on its desk.
14
Measurements “Tell me how you measure me and I will tell you
how I behave.”
Measurements drive behavior. Almost every single measurement on its own has the potential to cause a
distortion in behavior leading to local/suboptimal results.
In isolation, the measurement can be misleading, but with the right array
of measurements, earnings per share can provide a good description of the
actual picture.
Another approach to dealing with the potential of distortion is to use the
measurements for control, but not for driving results. Measurements of local optimum behavior should be abolished and replaced
with holistic measurements.
If the company produces to order we should look at on-time delivery as a
measure.
If the company produces to stock we should look at the stock buffer level
as a measurement.
15
Resistance to change “Overcoming resistance to
change is a major challenge for any implementation. Yet dealing with it on a
personal level is a mistake.”
When we face resistance to change we tend to blame the person resisting and
not the nature of the change or the way it was presented.
Yet our aim is not to change peoples’ personalities but to implement our
suggested change.
The productive approach is to address the change as an offer we have to
sell.
There are four aspects regarding the change that we have to consider when
we build our offer.
What are the pros and cons of the suggested change?
What are the pros and cons of staying in the current situation?
We have to answer these questions not from our perspective, but from the
perspective of the individual/organization we are trying to convince.
Goldratt suggested a So-cratic-based buy-in process. The process contains
six steps.
Only when an agreement is achieved in one step can the discussion move to
the next.
The steps in the process are the following:
Agreement on
the problem. The definition of the problem is the gap between the current and
the desired reality.
Agreement on
the direction of the solution.
To get a
consensus on the right direction, we need to reach an agreement first on the
criteria for a good solution.
Agreement on
the solution. In this step we need to demonstrate that implementing the
suggested solution will close the gap between the current and the desired
states.
Yes, but.
Dealing with the negative ramifications of the solution.
Not all of
them need to be solved completely but we do need to show that the risk or
effort associated with them is manageable.
Obstacles.
At this stage the main concern is how tangible the solution is.
The right
way to address this stage is to list all the obstacles and define for each one
the intermediate objective that will overcome the obstacle.
Call to
action. Once we translate each intermediate objective into an action plan, we
need to synchronize and schedule the different action plans as part of one road
map.
amazon review: Where Is The Constraint ?
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| heading is misleading,
Can be good for only starters, nothing new for me
I think following this book would puzzle you in front of all production staff which is embarrassing. There are better books. | ||||||||||||
amazon review: Manufacturing and Supply Chain Turnaround
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 To improve your business there are different alternatives to "Lean"..,
Personal choices have been promoted such as industrial benchmark.
Very spesific to process industry. Poor story, not very exciting. TOC has not been mentioned. A biased promotion of "Lean Thinking" | ||||||||||||
amazon review: All I Need To Know About Manufacturing I Learned In Joe's Garage
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| visual comparison of Lean vs. conventional thinking,
This review is from: All I Need To Know About Manufacturing I Learned In Joe's Garage: World Class Manufacturing Made Simple (Kindle Edition)
Easy reading. Brief visualization of conventional thinking versus lean thinking.
I think an appendices section covering lean literature would be useful for interested readers | ||||||||||||
26 Ağustos 2014 Salı
amazon review: Pinocchio Becoming Human with TOC
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| TOC is existing only in the heading....,
This review is from: Pinocchio Becoming Human with the Theory of Constraints (Story Warping Book 2) (Kindle Edition)
It is interesting to use fairy tales to make business theories more attractive.
In this book I could not identify TOC at all except the last section: Supplementary The book is talking about continuous production, batch processing and line balancing in general terms. I believe real life stories like "Joe's Garage" type are more intuitive. My vote is definetly for board game simulations to compare traditional thinking vs. global system thinking. | ||||||||||||
amazon review: Making the Match Girl Rich - inventory management
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| to have or not to have stock !?,
This review is from: Making the Match Girl Rich (Story Warping Book 1) (Kindle Edition)
This is an interesting view on inventory management in distribution business.
Naturaly everything is simplified to uniform distribution, zero lead time, no interest, etc. Main idea is to compare cost of having stock vs. cost of loss sale. I believe comparing traditional push thinking vs global pull thinking would be more useful. I wish a study showing similarities between Lean Value Stream Mapping and TOC distribution solution. | ||||||||||||
TOCICO reference material availability
This is a letter from Jim Cox to create a TOC awareness. I have already shared his reference book lists. Now please find his email, title and some other reference material available in TOCICO website.
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Each portal generally contains 6 or 7 videos or webinars on the specific TOC topic including a basic workshop on that topic and a number of case studies with two portal exceptions. The What is TOC portal includes a presentation by Eli Goldratt on this topic and several videos illustrating the wide application of TOC across industries. The Basics of TOC portal includes 8 webinars on the basics of TOC in different functions and an overview workshop on What is TOC. Each portal also includes an annotated bibliography of all TOCICO conference and webinar presentations on that topic. Over 500 presentations on these and other topics including intermediate and advanced workshops are available on the website for members. These portals can be used to expand your knowledge of TOC and you may share them with friends, colleagues, clients, and please academics for use in teaching.
Best regards,
Jim Cox
James F. Cox III PhD
Professor Emeritus
TOCICO Certified, CFPIM, CIRM
...................
Please feel free to send the lists to others and linked-in
communities for review and revisions. The master list is housed on the TOCICO
website but you can use the list on your own websites to expand awareness of
the TOC body of knowledge. If you identify any errors or omissions on the list
please send them to Jim Cox at jcox@uga.edu.
I update the list about every six month and submit it to TOCICO for inclusion
and download by you.
You may also be interested in other TOC knowledge stored on the TOCICO website. We created 13 TOC portals for anyone’s learning and use. Located under the Success Stories tab on the TOCICO homepage or using the tabs below, these portals are:
You may also be interested in other TOC knowledge stored on the TOCICO website. We created 13 TOC portals for anyone’s learning and use. Located under the Success Stories tab on the TOCICO homepage or using the tabs below, these portals are:
Basics
of TOC Portal
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Finance
& Measures Portal
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Government
Portal
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Healthcare
Portal
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Manufacturing
Portal
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Project
Management Portal
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Sales
and Marketing Portal
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Service
Industry Portal
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Strategy
and Tactics Portal
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Supply
Chain Portal
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Thinking
Process Portal
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TOC,
Lean, Six Sigma (TLS) Portal
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What
is TOC Portal
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Each portal generally contains 6 or 7 videos or webinars on the specific TOC topic including a basic workshop on that topic and a number of case studies with two portal exceptions. The What is TOC portal includes a presentation by Eli Goldratt on this topic and several videos illustrating the wide application of TOC across industries. The Basics of TOC portal includes 8 webinars on the basics of TOC in different functions and an overview workshop on What is TOC. Each portal also includes an annotated bibliography of all TOCICO conference and webinar presentations on that topic. Over 500 presentations on these and other topics including intermediate and advanced workshops are available on the website for members. These portals can be used to expand your knowledge of TOC and you may share them with friends, colleagues, clients, and please academics for use in teaching.
Best regards,
Jim Cox
James F. Cox III PhD
Professor Emeritus
TOCICO Certified, CFPIM, CIRM
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