Theory of Constraints Next Step Consulting

A Guide to Implementing the Theory of Constraints (TOC)
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A Chain Is A Chain Is A Chain

When I initially wrote most of the pages on this website I made a conscious effort to keep the chain analogy out of the picture. I had reasons for this. But more recently I have weakened a little.

You see, the chain analogy can put some of us in a double bind. I would like to try and explain this. I hope that this explanation will illustrate the need for consulting expertise that is rather different from what we would normally expect.

The expertise that is required is more of a facilitation of, or better still an elevation to, a new set of rules under a new level of understanding rather than traditional consulting which tends to operate under the existing rules of an existing level of understanding.

Let’s start.

We all know the following;

We are, of course, using this as an analogy for a business system. We need to recognize that a chain is a rather static device but that our business systems are dynamic, however, within these limitations it is a sound analogy. This description of a chain is so obvious in fact that we tend to go on to say, most often without even thinking about it, that;

And there, right now, is our double bind. You see, it is obvious for a chain, but it might not be so obvious for a business system. For those of us who work in a manufacturing chain, or a distribution chain, or a sales chain, or a finance chain; this is indeed, most often, common sense. We know this because we see the sequential dependent flow and it’s consequences in our business system. We might not understand this fully, but we are certainly aware of it. But not everybody else gets to see what we see, and we tend to overlook this fact.

Immelman makes a critical distinction between those intimately involved in the flow of a business process and those resources who support those intimately involved in the flow (1). Often it is these latter people for whom the double bind is most pressing.

Those of us in the double bind can’t say “no, it’s not common sense” even though we want to because we haven’t experienced it first-hand in our own reality and therefore can’t map from the analogy to the reality. We can’t say “no, it’s not common sense” because indeed the analogy (but not the reality) does seem like common sense

Those of us in the double bind also can’t say “yes, it is common sense” even though we want to because it means we have been doing nonsensical things, which is against our very nature – we try to do our best – even though we may very well have experienced the analogy in our own reality.

Should we admit to doing nonsensical things and change or should we gloss-over and continue to carry on as usual?. Without strong leadership (and a change of the measurement system) we will gloss-over and continue to carry on as usual. Want proof? Just consider the number of people who read The Goal, emphatically agreed with it, and then, so far, have not found sufficient time to do anything about it.

There is a double bind. We need to break both sides. Let’s look first at the bind that stops some of us from saying “no”. Then we can look at the more involved situation of the bind that stops some of us from saying “yes.”

Breaking The Bind That Stops Us From Saying “No”

We need to break the bind that stops people from saying “no.” This is the easier of the two binds to remove. All we need to do is to be careful with the analogy. We need to drop the words “common sense,” even if in some cultures “common sense” is the highest form of praise. And maybe we need instead to substitute the words “common experience.”

Let’s see what effect this simple change has. In terms of the chain analogy itself there is no issue. Even if we have never busted a chain, we have certainly snapped a piece of string – and we certainly know that a frayed piece of string is most likely to snap at the fray.

More importantly, in terms of the reality of our business systems we have now broken the bind. We can now say freely that “no, we don’t all have the flow experience.” We can now say that it is an experience that is not common to ourselves or common to others that we know of. And of course once we verbalize this problem – lack of experience – then we can then address it. And we can best address it by providing a surrogate experience that is directly mappable back into the immediate and familiar business process. This is the same solution as we need to break the bind that stops people from saying “yes.” But first we must stop using the term “common sense.”

Breaking The Bind That Stops Us From Saying “Yes”

We need to break the bind that stops people from saying “yes.” We need to show that what we are currently doing is indeed sensible under the current rules and current understanding. After all, we are creatures of positive intent.

If what we are doing now can indeed be currently viewed as sensible, and also in (future) hindsight as nonsensical, it must be because our view of the world (or a part of it) has moved on.

In fact we can sum this up in a picture;

Now here is a nice convergence. Those of us in a double bind see the case of the isolated links. Moreover, we can’t see the case of the interlinked chain. Sure we can see and understand the analogy but we can’t make the transfer to our reality.

In fact we may have spent our entire professional careers measuring and managing a group of links as though each link was isolated from, and independent of, any other. And this is absolutely sensible within the confines of our current rules and our current understanding. I personally know of several gentleman who have spent their entire careers managing links as isolated entities, who have “retired” at 65 years of age and have then re-entered the work force managing the links as whole chains – and have never been happier! And never been more productive.

And if our business is like a chain – and it is – then we must learn how to manage it as a chain, as a system.

To paraphrase Deming; it is not good enough to do our best, first we must know what is best – and then do it.

How can we do this? How can we first learn to know what is best?

A well designed tacit or experiential learning exercise would be a good place to start. This is the surrogate experience that we need that is directly mappable back into our immediate and familiar business process. Goldratt included one in his novel The Goal (2), but this is only a small part of the whole story. We will need to add an additional and much larger part as well.

The Classic Balanced Dice Game

The dice game was presented in terms of a balanced line – that is, a chain of equally strong links. Of course balanced lines were at that time (and still are) a myth that Goldratt had set out to debunk. But the more important message was to allow people to experience first-hand, with a dice and a few match sticks, the effects of serial dependency and statistical variation. You see, we have very little intuition about this. This is part of our problem – and therefore it must be part of our solution as well.

Some people may argue that the huge range of a dice is not a fair reflection of the lesser variability found in most real business situations. The very same people, however, omit to address the fact that having just 6 dependent steps in a line is probably the world’s shortest process too; but still the simulation works. In fact we can draw this simple system as follows;

If you have tried the dice game for yourself then you will be aware that it is a very powerful experiential learning exercise. The outcomes are not what you might expect. If you haven’t tried it then make a point of doing so.

If you have done this with others you might also have experienced some people wishing to show you how to “game the system;” that is, by making some changes they hoped to disprove the lesson just learnt. This is an illustration of just how powerful some people’s intuition or expectation is of how the game should work rather than how it did work in actuality. And this brings us towards the crux of the matter. Our expectations sometimes block us from learning. And don’t laugh, but I have seen evidence of very sophisticated people who thought that by running this game for a couple of million times (on a computer) they could successfully end up gaming the system. But they couldn’t because in this case reality is different from expectation. This is sometimes a very hard lesson to learn.

Hold on to that thought, we will come back to it after the next section.

The classic dice game teaches us something that we didn’t want to learn, and that many of us have little direct experience of; the nature of dependency and variation. But it does so in an “unreal” situation, a chain where every link is perfectly balanced. The real world is much, much, more messy. We still have dependency and we still have variation, but we also have unbalanced lines or chains. We need to account for this.

“Advanced” Unbalanced Dice Simulations

The dice game has also sometimes been pressed into service to show the drum, or the buffer, or the rope, for the production logistical solution drum-buffer-rope (and it can be equally used for the supply chain and project management logistical solutions too). In less formal terms, we showing the behavior of a chain of sequential dependencies with a “weakest” link. This is what we have;

However, in every single example that I am aware of this has been done uncritically such that it introduces an error into our understanding. Or rather (again) our uncritical expectation of how the game should work leads us to construct it in exactly that way. We get the result we expected to get, and we don’t learn anything new in the process. We are blocked by our own paradigm. Moreover, this error gets propagated from external consultant to internal client and then right through the firm. We tend to believe that we have re-learnt something that we already know, when in fact we have totally missed the point.

Do you see the problem here?

We need this tacit experience of an unbalanced chain to unblock the bind that stops us from saying “yes this is common sense” (and moreover “what I am doing now is, in hindsight, nonsensical but I can rationalize this in terms of my new knowledge gained through the surrogate experience – and the fact that my intent always has been and always will be positive”), and yet the very experience that we need to use is corrupted by how we think we should design it.

Properly designed, there is an incredible richness that can be examined in this simple unbalanced dice-driven simulation. In conjunction with the balanced simulation of the classic dice game it allows us to verbalize and investigate a fundamental cloud.

Now, I must apologize for being so vague. But if I was to be specific it would be of no service. If I was to tell the uncritical assumption it would make no difference. It must be experienced, not told.

I want to walk people through this process so that I am sure that we have all learnt the complete lesson and the new knowledge – rather than re-learnt the old lesson and no new knowledge.

A Fundamental Cloud

Why is there such a hard lesson to learn in the classic balanced dice game? Why do we make an uncritical assumption in the “advanced” unbalanced dice simulations? The answer is that because each of these represents, or illustrates, one arm or one side each of a currently unverbalized fundamental conflict cloud.

That sounds like a rather grandiose claim – that there is fundamental cloud that we don’t yet know of. Certainly, Goldratt claims the core problem to be the erroneous assumption that the sum of the local improvements equals the global improvement. But this error must arise for some good reason, the result of some previous positive intent?

It seems to me that we haven’t really explored the cloud that gives rise to this. The simulations outlined above allow us to build this cloud. And it has a bit of a “twist” to it.

If we will allow ourselves to build this cloud, then;

(1) Everyone can developed the requisite flow experience in a safe and secure environment – through tacit experience. We will not be in the bind of wanting to say “no this isn’t common sense” but can’t. We will have the experienced that chains, and not isolated links, are the correct paradigm for our business systems.

(2) Everyone can develop the requisite knowledge of how to manage a chain in a safe and secure environment. We will not be in the bind of wanting to say “yes this is common sense” but can’t because our current mode must be nonsensical. We will have the experience of why our world view needs to move onward. We will have experienced that chains, and not isolated links, are the correct paradigm for our business systems.

I can walk you through this process. You know how to contact me. Bounce some ideas around, you will be pleasantly surprised at how simple this can be made. I know that the way that I have put this forward sounds like an introduction to one of the logistical solutions, but it isn’t. It is using one of the logistical solutions as a vehicle to communicate the fundamental understanding needed to move into this new paradigm and to apply it to wherever we wish.

After all;

A Chain Is A Chain Is A Chain

We should really stop talking about weakest links!

References

(1) Immelman, R. E., (2003) Great boss dead boss: how to extract the very best performance from your company and not get crucified in the process. Stewart Philip International, 317 pp.

(2) Goldratt, E. M., and Cox J., (1994) The goal: a process of continuous improvement, 2nd Revised Edition. The North River Press, 337 pp.