Frequently Asked Questions TOC and Strategy
What is the essence of TOC techniques and tools on the strategic horizon?
Strategic exercises very often have the disadvantage that they are either made in an 'ivory tower', which means that they are not supported by the management, or, when they are involved, they take too much time from the operational people who actually have to give priority to day-to-day management. Another disadvantage of the second approach is that sometimes too much attention is paid to partial optimisations and fighting to get a larger share of the budget cake. The TOC techniques and tools make it possible to start from market needs and immediately make the link with future financial and operational constraints.
How can you get something like this up and running quickly enough?
It is an interplay of numbers and logic. First, the logic is worked out in a so-called S&T format. This is an exercise which, when carried out by an experienced TOC expert, fairly easily links all the hooks and eyes of the strategy to the experience of the employees and creates a solid consensus. Some parts of it can be immediately converted into a project plan. This is followed by a calculation that starts from the actual income statement and simulates the following periods while taking into account constraints such as: capacity (both installations and human resources and critical skills), financial resources, stocks and lead times. The 'driver' of the system is the marketing plan, which is converted into its market-constraint components. This immediately creates a FOCUS on the right priorities, which everyone can live with. At a subsequent stage, the plan is secured by the adapted buffers, so that the whole becomes robust and can take a beating.
Surely this is not new, we now use 'reserves' in our budget exercise?
Fortunately, there are reserves, and in order to be 'reassured' from the outset, reserves are often allocated to the departments that have to bear the greatest risks. If there are no reserves, the budget exercise becomes an exhausting discussion in order to include as much security as possible in the 'accepted' figures. No wonder, then, that this frequently used tactic leads to the whole budget being absorbed, because if you have a 'surplus', your game is exposed and your budget is reduced the following year... A very workable solution is the application of what has been used for more than 20 years for steering projects according to TOC-Critical Chain techniques. Namely, no divided buffers, which still suck up everyone, but a single well-managed buffer.
Are we not going to end up in a 'big brother is watching you' - story?
Practice has proven the opposite. Keeping the buffer healthy is not the responsibility of just one person, but of the whole team. By the way, Buffer Agent is a very idiosyncratic TOC technique, which also provides sensitive and above all predetermining signals. These signals are available to everyone. This leads to a much better assessment of when intervention is required and why. Buffer management drastically improves delivery reliability, both in supply chains and in projects, at the same time and in the long run with less expenditure.
Should each employee or person involved assess the effect on the 'global' buffer?
No, this is done by deregistering the individual tasks, which are linked in a model that reflects the processes.
Surely we are faced with the impossible task of modelling all business processes in detail, recording them in that calculation model and maintaining them as well?
That would indeed be an impossible task, but there are solutions to it. In summary, the bottom line is that buffer management can work perfectly well with a very limited set of data if they are judiciously chosen and relate to critical roads and/or critical resources. The result of this approach is that one gets a workable and reliable system in a very short period of time, while precisely the buffer management technique ensures that one only intervenes where it is needed. This avoids many partial optimisations and wasted management time.
What is the main difference with the existing way of working?
Through the construction of the S&T logic, a number of blockages, which can result from habits and corporate blindness, are broken in a non-accusatory way. On the contrary, this process is experienced as exposing opportunities. The numerical replenishment of the market-constraint model concretises this and indicates what can be taken into one's own hands. The exercise also makes it possible to articulate obstacles, which is a positive reversal of 'well-meaning criticism' that is further used to elaborate targeted tactics.