TOC PROCESS  Synchronization. The evolution.

The first steps:

Since the first applications of the DBR – technique in the 80’s some important additional TOC-related techniques and tools have been developed to support the 5 steps-process (see below) that are the result of a regular TOC-implementation.

Before that stage, TOC could be perceived as another optimization algorithm like linear programming etc… The first application, called OPT, introduced a new vision in even complex productions and supply-chains but after a short while it turned out that the necessary data were not available and/or, if available, much too far from the operational reality to generate the right decision information. The tendency to optimize all the elements (Not only operating expenses, but also capital cost as well as variable costs and even allocated costs etc…) has led to unstable and useless models.

 

In a second phase the DBR-technique has been developed. This model is based on much less parameters and is using the major constraint (or bottleneck) as a “drum”. The operational planning is the result of a good usage of the major constraint by subordinating all the decisions to it. The corresponding measurement: throughput was a paradigm-shift in the industrial thinking. The management’s effort turned from the so many problems into focus. To introduce this concept Eli GOLDRATT wrote a best-seller (more than 3 million books have been sold)  : THE GOAL.

In the third phase, after the development of the TOC-Critical Chain techniques for projects, buffer-management became the main tool for synchronizing the global environment. In this period (the 90’s, 2000 and later) a lot of production units did not struggle any longer with structural bottlenecks. Most of the plants had to deal with over-capacity. Buffer-management became the key -solution for adequate steering while due-date performance, supported by throughput accounting, was used as KPI. A major advantage is that the lack of precision of the data is no longer an obstacle for getting important results.

The logical effect of shortening lead-times while improving due-date performance was a fact. This unique technique is still the basis of the current applications. A further improvement technique, that is using the so called ‘holes in the buffer-analysis’, eliminates a lot of unnecessary sub-optimizations and opens the way for using precious management time, and the always too limited budgets, to focus on the real leverage points. A major advantage of this technique is that the lack of precision of the data is no longer an obstacle for getting important results.

Due to the de-localisation of the industry in our regions it became clear that more and more disturbances are caused by long lead-times of the suppliers or by the far-away subcontractors. While the regular solutions went back to introduce extra protection by additional intermediate buffers, the TOC-solutions focussed on protecting the throughput by steering the global chain. Since about 10 years this solution has been supported by specific TOC-Synchronised Supply Chain techniques that are part of the TOC C&DS system. (C&DS = Control & Decision System).

The current C&DS-applications are more and more used to synchronizing the global supply chains “from-China-to-the European customer”. The effect of synchronizing ALL the inventory in the global chain eliminates a lot of sub-optimizations and waste.

The same techniques and the corresponding applications are also used to synchronize and shorten other business processes like purchase, quality or improvement processes.

What’s next?

The current evolution goes to virtual supply-chains and processes with often very long tentacles through different services, locations, transport-systems and responsibilities. The logical effect of reducing uncertainty pays-off by less urgencies and shorter process times with less effort and often with the same or less resources.

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The 5 TOC-focusing steps:

Step zero: Define the system’s goal.

  1. Identify the constraint.

  2. Exploit the constraint (if you cannot immediately remove it)

  3. Synchronize (subordinate) the non-constraints to the decisions of step 2.

  4. Improve the constraint

  5. Go back to step 1.

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