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A Guide to Implementing the Theory of Constraints (TOC) |
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All Singing From The Same
Systemic Song Sheet The Constraint Management Model for Strategy which
we examined on the previous page is a superb approach for organization-wide
improvement when everyone is already aligned and singing from the same song
sheet – or at least is willing to do so.
It is without doubt a systemic/global optimum approach. The holistic approach is also a
systemic/global optimum approach but one borne out of the experience that not
everyone initially wants to, or understands the need to, or even knows how to
sing from the same systemic song sheet. Experience suggests that contrary to expectation, a
substantial and rapid but localized success in the implementation of any one
of the Theory of Constraint logistical or non-logistical applications will
not result in a steady and system-wide uptake of that success. Indeed the opposite may well occur and may
eventually result in the winding-back of the initial genuine but localized
success. If we are in the business of
moving organizations towards their stated goal, then clearly this will not
do. The holistic approach sets out to
ensure that everyone understands, and is in agreement, as to what must
be done before there is any attempt to undertake it (1). Sometimes it is easier to define the holistic
approach by what it is not rather than by what it is, so let’s start there.
The holistic approach is not the courageous
successful implementation of a single Theory of Constraints application,
either logistical or non-logistical. This
arises because the successful implementation of any of the Theory of
Constraint solutions generally results in the breaking of the previously
perceived constraint. That is great –
but by definition the constraint has to have moved somewhere else – unless
you are making infinite throughput – and I don’t think anyone has seen this
yet. Herein lies the problem. Imagine for instance that you are in marketing and
the constraint is in production. The
production people break the constraint.
Big deal. You could have
written a list, as long as your arm, of reasons why production couldn’t meet
the market. Now they claim the
constraint is in marketing but they don’t have a clue just how different
marketing is from production. Or imagine that you are in production and the
constraint is in marketing. The
marketing people break the perceived constraint. Big deal.
You could have written a list, as long as your arm, of reasons why
marketing couldn’t beat the market.
Now they claim the constraint is in production but they don’t have a
clue just how different production is from marketing. Who is right?
Well both are right, and both are wrong. If it had have been easy to break the
constraint in another area it would have been done. That it wasn’t done previously proves that
it wasn’t simple. Unfortunately nobody
will see that. Let’s repeat that – unfortunately nobody will see
that if it had have been easy to previously break the constraint it would
have been done. Subsequent to a successful localized implementation
a number of different things might then occur. At the best the implementation will peak
and remain static. Many people will in
fact be very happy to have achieved such an improvement and to maintain
it. At worst, however, a number of ill
effects may arise and often the implementation will slowly degrade. Generally, people who were not intimately
involved in the implementation will begin to “unpick the threads” from the
sidelines. To counter such actions we
must remember Goldratt’s first law of business “be paranoid.” Not to be confused with his second law
which is also “be paranoid!” If you
think people are unpicking the implementation, then they most probably are. Saying “yes” and doing nothing is a
reasonable indicator of a slow unraveling.
After all isn’t this how most improvement initiatives – even
successful ones – have been defeated in the past. Maybe we are now in better position to define the
holistic approach. The holistic approach is a means of ensuring a process
of on-going improvement. Remember our
leverage curves on the page on process of change? But how do we ensure that the process will
be on-going whenever it jumps a boundary between functional or logistical or
business units? Goldratt’s answer to this
problem is to ensure at the outset that the top leadership/management of the
organization understands; (1)
The system. (2)
The goal of the system. (3)
The necessary conditions. (4)
The fundamental measurements. (5)
The role
of the constraints. Essentially we are asking that the
reductionist/local optima view be reframed and replaced with the
systemic/global optimum approach. The mechanism for obtaining this is a series of
video presentations first broadcast internationally in 1999 and now available
both as video tapes for groups and CD-ROMs for self-learning purposes (see
links and resources). This enables
management to understand the problems, the interactions, and the solutions
for each other’s area. Thus production
gains insights into marketing and sales.
Marketing understands production, distribution, and accounting. The presentations provide the vision and
understanding for “why change.” The
subsequent facilitation addresses “what to change,” what to change to,” and
how to cause the change.” Properly facilitated this approach will ensure a
true process of on-going improvement. Returning to our model system once more, we are
trying to avoid the reductionist/local optima approach as depicted here.
As you know from practical experience, if you have a
hammer, then everything looks like a nail.
And if you have screw then a butter knife looks like a serviceable
screwdriver – well that is until you have to put it back in the kitchen draw
again. The point being we are trying to obtain collaboration
and understanding without matters disintegrating into finger pointing, or
worse still to have agreement when no agreement exists in reality in order to
preserve appearances. We want to move
from the current reductionist approach to a systemic approach as smoothly as
possible. Senge describes the myth of the management
team. “All too often teams in business
tend to spend their time fighting for turf, avoiding anything that will make
them look bad personally, and pretending that everyone is behind the team’s
collective strategy – maintaining the appearance
of a cohesive team (2).” Amazing – I
don’t think Senge ever worked in Japan and yet he understands it
perfectly. Of course he was actually
referring to that paragon of free-enterprise – corporate America. It must be pretty universal then. Let’s continue with the quote. “To keep up the image, they seek to squelch
disagreement; people with serious reservations avoid stating them publicly,
and joint decisions are watered-down compromises reflecting what everyone can
live with, or else reflecting one person’s view foisted on the group. If there is disagreement, it’s usually
expressed in a manner that lays blame, polarizes opinion, and fails to reveal
the underlying differences in assumptions and experience in a way that the
team as a whole could learn.” That’s interesting because if you have read the
previous section you will be aware that the Thinking Process provides us with
a tool for exploring differences in assumptions in a way that the whole team
can learn, as you know the method or approach is called a cloud. The same tool is specifically designed for
no-compromise outcomes – win-wins. However, the tool of choice for ensuring
collaboration without finger pointing is not the cloud, but a derivative
called the 3 cloud method. This allows
us to develop a no-compromise outcome and communicate it and its
ramifications to others outside of the original decision process. We looked at this specifically in the
section on leadership and learning.
The details of the methods are outlined in the section on the
communication current reality tree and the 3 cloud method. This combination allows us to develop an
“us and our solution against the problem” without ever raising an “us
against each other” intermediate stage. Having gained agreement on the problem using these
techniques, thereafter, the normal approach using the Thinking Process tools
is possible. The outcome of this process is that the leadership
of all major components of the business have developed and agreed to an
implementation plan and its execution.
There is broad agreement on how future events should unfold and the
understanding necessary to modify things to take account of new developments
as they occur. Odd as it may seem at first, the holistic approach
represents a certain maturity in the sequence of the development of the
Theory of Constraint applications. One
that couldn’t have been arrived at earlier.
The logistical solutions; production, supply chain, and project
management and the non-logistical solutions can be applied individually to
firms that specialize in a particular environment but as soon as they are
applied to larger environments then the new challenge becomes how to
integrate the applications. The answer
is to do this at the outset – before any one particular application is
applied – but to do that you must also have access to all the applications. Rather like overcoming a series of physical and
policy constraints within a firm within a single application, each logistical
and non-logistical application itself also overcomes a pressing problem (how
to manage) within different parts of industry as a whole until the pressing
problem is not production, nor distribution, nor sales, nor engineering but
rather how to integrate these together as required within a single corporate
strategy – to get everyone singing from the same systemic song sheet. This is the aim of the holistic approach. (1) Goldratt, E. M., (1999) How to change an
organization. Video JCI-11, Goldratt
Institute. (2)
Senge, P. M. (1990) The fifth discipline: the art and practice of the
learning organization. Random House,
pg 24. This Webpage Copyright © 2003-2009
by Dr K. J. Youngman |
