toc korea 2008 - the strategy & tactics tree · the toc strategy & tactics tree: aligning...
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The TOC Strategy & Tactics Tree:
Aligning & Synchronizing for Ongoing Improvement
TOC KoreaSeoul, ColombiaOctober, 2008
Presented by Lisa Scheinkopf
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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
“It would be better if everyone would work “It would be better if everyone would work together as a system, with the aim for together as a system, with the aim for g y , fg y , feverybody to win” everybody to win”
–– W. Edwards DemingW. Edwards Deming
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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
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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
1.12.05
1.1.06
1.2.06
1.3.06
1.4.06
1.5.06
1.6.06
1.7.06
1.8.06
1.9.06
1.10.06
1.11.06
1.12.06
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
1.10.07
1.11.20
07
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 <1%30% to <1%
Offer accepted Offer accepted by all major by all major distributorsdistributors
20%20%--63%63%•• 2X rate of 2X rate of
projects projects l ti l ti 30% to <1%30% to <1%
•• Capacity >2XCapacity >2Xcompletion completion
Clearly Articulates Up, Down, Across
1. What am I / are we responsible for accomplishing?p g
2. Why is what I’m responsible for really needed by the organization to improve vis-à-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?
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Strategy & Tactics Tree Elements1. What am I/are we responsible
for accomplishing?
2 Why is what I’m responsible
Necessary AssumptionWhy?2. Why is what I m responsible
for really needed by the organization to improve vis-à-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
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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 client’s 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
RDC’s
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
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With thanks to Yuji Kishira
Making An Organization’s
With thanks to Yuji Kishira
Organization s Vision Viable SS
TTWhat for?
How?
SST
SST
What for
How?
What for?決定的な差別化
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
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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
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Thunderbird School of Global Management.