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  • The TOC Strategy & Tactics Tree:

    Aligning & Synchronizing for Ongoing Improvement

    TOC KoreaSeoul, ColombiaOctober, 2008

    Presented by Lisa Scheinkopf

  • The issue troubling The issue troubling every CEO every CEO

  • Up & Down Levels

  • Across Silos

  • Our Viable Vision Implementations Implementations Demanded A Solution

    Good peopleHard working Hard working peopleThe TOC solutions The TOC solutions have proven to work over many work over many yearsWhat is missing?g

  • In the words of Dr. Deming

    ItwouldbebetterifeveryonewouldworkItwouldbebetterifeveryonewouldworktogetherasasystem,withtheaimfortogetherasasystem,withtheaimforg y , fg y , feverybodytowineverybodytowin

    W.EdwardsDemingW.EdwardsDeming

  • The Strategy & Tactics TreeThe Strategy & Tactics Tree

    The TOC Thinking Process The TOC Thinking Process Application to Facilitate

    Whole Company Ongoing Whole-Company Ongoing Improvement

  • TRD for Flats

    900

    Operational Performance (TDD) Before & After S&T

    850

    700

    800

    Baseline

    Simultaneously* Sales Increased* Inventory Decreased

    543

    678

    583600

    700 BaselineTRD for Flats

    Inventory Decreased

    432466

    543514

    396371

    428460

    367

    460501

    456

    400

    500

    Inde

    xed

    TRD

    367

    183200

    300

    183

    8829 323828294130

    100

    0

    1.12.0

    51.1

    .061.2

    .061.3

    .061.4

    .061.5

    .061.6

    .061.7

    .061.8

    .061.9

    .061.1

    0.06

    1.11.0

    61.1

    2.06

    1.1.07

    1.2.07

    1.3.07

    1.4.07

    1.5.07

    1.6.07

    1.7.07

    1.8.07

    1.9.07

    1.10.0

    71.1

    1.200

    7

  • Starting & Sticking with the S&TStarting & Sticking with the S&TActual 4 Months ResultsActual 4 Months Results

    OperationsOperations SalesSales R&DR&DOperationsOperations All plants on All plants on

    DBR/BMDBR/BM

    SalesSales Inventory Turns Inventory Turns

    Offer accepted Offer accepted

    R&DR&D DDP increased DDP increased

    20%20%--63%63%DBR/BMDBR/BM

    StockoutsStockouts from from 30% to

  • Clearly Articulates Up, Down, Across

    1. What am I / are we responsible for accomplishing?p g

    2. Why is what Im responsible for really needed by the organization to improve vis--vis its goal?

    3. What must I/we do to accomplish it?4. Why will this action/activity achieve it?5. Why is accomplishing this at risk without

    providing another level of detail for my subordinates?

    6. How does it link with what others are responsible for accomplishing?

  • Strategy & Tactics Tree Elements1. What am I/are we responsible

    for accomplishing?

    2 Why is what Im responsible

    Necessary AssumptionWhy?2. Why is what I m responsible

    for really needed by the organization to improve vis--vis its goal?

    StrategyStrategyWhat for?What for?

    Why?

    3. What must I/we do to accomplish it?

    4. Why will this action/activity

    What for?What for?

    Parallel Assumption4. Why will this action/activity

    achieve it?

    5. Why is accomplishing this at risk without providing another TacticTactic

    AssumptionWhy?

    p glevel of detail for my subordinates?

    6. How does it link with what

    TacticTacticHow?How?

    Sufficiency

    others are responsible for accomplishing?

    Sufficiency AssumptionWhy?

  • 1

    Consumer Goods S&TConsumer Goods S&T

    Viable Vision

    Base Growth Enhanced GrowthStrategyStrategyWhy?

    2:1Inventory Turns

    Comp. edge

    2:2TPS

    Comp. edge

    What for?What for?

    TacticTacticHow?How?

    Why?

    Build SustainCapitalize Build Capitalize

    How?How?

    3:1Aligning

    the supply chain

    3:4CapacityElevation

    3:2Inventory

    Turns Selling

    3:3Expand Client base

    3:7TPS

    Enhancement

    3:5Ensure

    HighTPS

    3:6TPS

    Sellingchain Selling base TPS

  • When most cash is tied up in inventory and availability is still an issue, improving inventory turns is a clients significant need

    Inventory Turns Comp. Edge

    Necessary assumptions

    2:1

    improving inventory turns is a client s significant need.

    A decisive competitive edge is gained by providing a "partnership" that delivers superior inventory turns (better availability coupled with

    assumptions

    Strategydelivers superior inventory turns (better availability coupled with substantially reduced inventories), when all other parameters remain the same.

    StrategyStrategyWhat for?What for?

    Switching from a forecast driven mode of operation to a consumption driven mode of operation increases dramatically inventory turns (reduces shortages while reducing inventories).

    Parallel assumptions

    The Company develops the capabilities to successfully implement with enough clients a partnership that is based on supply according to consumption

    TacticTacticTactic

    Building a decisive competitive edge is not easy; building the capabilities to capitalize on it is not less difficult But sustaining

    to consumption.

    Sufficiency assumption

    How?How?

    capabilities to capitalize on it is not less difficult. But, sustaining these two elements is the real challenge.

    assumption

  • Consumer Goods S&TConsumer Goods S&T

    1Viable Vision

    2:1Inventory Turns

    Base GrowthViable Vision

    3 1Build

    3 2Capitalize

    3 3Sustain

    3 4

    Comp. edge

    3:1Aligning

    the supply chain

    3:2Inventory

    Turns Selling

    3:3Expand Client base

    3:4CapacityElevation

    4:11Aligning

    production to

    4:12Replenishing to

    RDCs

    4:13Keeping correctinventory levels

    4:14Building initial

    inventories

    5:13:1 5:13:2 5:13:3

    production to actual demand

    RDC s inventory levels inventories

    5:13:1Buffer

    management system

    5:13:2Expediting

    5:13:3Adjusting to peak demand

  • WA

    Harmony, Peaceful, Sum and Japanese!Japanese!

    WA Holistic TransformationWA Holistic Transformation (KAIKAKU) Management

    With thanks to Yuji Kishira

  • Making An Organizations

    With thanks to Yuji Kishira

    Organization s Vision Viable SS

    TTWhat for?

    How?

    SST

    SST

    What for

    How?

    What for?

    S&T TreeT T

    S S S S S S S S S

    How? How?

    SuppliersSuppliersShare

    holdersShare

    holders

    TT TT TT TT TT TT TT TT TT

    SSS SSSSS S SS SS S S S S S S S SSS SS

    Harmony

    RetailsRetails

    o de so de s

    Procure-ment

    Procure-ment

    T T T T T T T T T TT T T T T T T T T T T TT T T

    Stability Growth

    HarmonyProductionProduction Sales

    and Marketing

    Sales and

    Marketing

    Supply ChainSupply ChainR & DR & D

  • The Newest Addition to TOC TP

    Several Standard Templates are in the public domainpublic domain

    Manufacturers; Projects; Retailers; Wholesalers; Distributors;

    There are a growing number of S&T Experts in the TOC communityp y

    Seek them outPut pressure for more

    More books, articles, presentations are on the way

  • Lisa Scheinkopf

    A Director of Goldratt Consulting and recognized worldwide as a leading Theory of Constraints (TOC) authority. ( ) y

    Worked with Dr. Eliyahu Goldratt in developing the TOC Thinking Processes and is the author of the definitive TOC reference, Thinking for a , gChange: Putting the TOC Thinking Processes to Use (St. Lucie Press, 1999).

    Published in a variety of industry and Thank You!y yprofessional publications, and a long history of public speaking on TOC.

    Over 25 years management and consulting y g gexperience, past Board Member and Chairperson of TOCICO, and an MBA in International Management from the Thunderbird School of Global Management

    Thunderbird School of Global Management.