WHAT’S WRONG WITH ToC?

In an organization everyone can say ToC but implementing it in a global and lasting sense is difficult. As I started to research this question, I asked one of our engineers in the Project Management Group (PMO) and he replied:

”I gotta be honest, I really don’t understand what is being asked.”

Many people can say the words ToC; but few understand the true concept and that is where I believe the ToC process fails. I started to investigate this when I was working with an engineering group because I believed we had been in the process of creating reliability enhancement projects just for the sake of saying we have reliability enhancement projects in work. It seems like engineering was creating projects because it worked in the past and it is now seen as a “Business As Usual” (BAU). 

My assertation then, was that the focus they were placing on the Engineering Projects, including the Reliability Projects, was itself a manifestation of local optima. It doesn't matter how efficient you get at producing engineering projects if the “factory” can’t produce a final product by implementing the engineering enhancement on the aircraft. The engineering group seemed to remain focused on removing constraints in the engineering process and consider a project “done” when the paper work was completed. In this process there was no thought to the global problems involved in implementing those projects onto the aircraft; so, maintenance falls further and further behind and the customer doesn't get the product or enhancements they want in the finished product when they want it. 

Because of this I started asking the question:

WHAT’S WRONG WITH ToC (THEORY OF CONSTRAINTS)?

I perceive two issues:

ToC has trouble gaining traction because the changes required to affect the biggest difference are management changes. Getting management to change is a daunting task and is exponentially more difficult with the size of the organization. There is enormous pressure for middle managers to maintain the momentum of status quo and any new ideas will invite unwanted scrutiny from their own managers. Any little hiccup in a new process sends all levels of managers into a frenzy, insisting that the status quo be re-established, removing the real and imagined threats that accompany additional scrutiny.  

An individual might be able to make some progress implementing local ToC solutions; however, any attempt at global ToC solutions would require a concerted effort from all levels. This all starts with an executive who embraces the changes and champions them to all levels below, followed by allies in middle management and the front-line ranks who support the solutions and provide the insight to correct problems that arise.

The second difficulty with ToC is that the ideas are often counter-intuitive. We tell a manager that he will increase production by limiting the amount of work he brings in. Without the understanding of why this is true, the manager is not likely to decide to support this argument. Therefore, we are left in a world where the ToC advocate constantly must argue and defend their position. Without other advocates supporting that position, they will eventually tire of the arguing and slip into the status quo everyone else is so comfortable in, or they will be isolated and dismissed from the operation causing them to leave.

One of the founding principles in quality control is the understanding that continual process-adjustment in reaction to non-conformance actually increased variation and degraded quality.  My thought is, through creating engineering enhancements, we may be reacting to “One-off” Operational Difficulty Items (ODI) or other Un-Desirable Effects (UDE) by creating more noise and degrading the overall quality.

In proving this, I have been working to frame the problem of ODI and UDE items in terms of “assignable-cause” and “chance-cause” variation. I’ve been thinking we need to introduce a control chart as a tool for distinguishing between the two. In a design of a control chart we can stress that bringing a reliability improvement process to solve for an ODI or UDE problem into a state of statistical control, where there is only “chance-cause” variation and keeping it in control. In providing this we can predict future output and manage a process economically. I’m looking into this because there are times that the operation seems to jump to correct a “chance-cause” and create more noise in the system.

Let’s get back to the main question:

WHAT’S WRONG WITH ToC (THEORY OF CONSTRAINTS)?

Why haven’t the powerful ideas put forth by Dr. Goldratt in THE GOAL gone main stream? Even when the individual, as well as collective results, achieved using those ideas far exceed the results achieved through Lean, Six Sigma and Agile. It’s been 35 years since THE GOAL was first published, and that’s long enough for simple and powerful ideas to take hold. I’ve had the same thoughts about Continuous Improvement (CI) in general. 

Lean has been around since Henry Ford and his assembly line and further defined by Bill Smith with Motorola as he documented the Six Sigma process. Then Taiichi Ohno contributed Kanban with the Toyota Production System (TPS), and Eli Goldratt with (ToC). Each of these being implemented is a very small percentage. 

My experience has been that individuals have a constant and natural resistance to change, especially things not understood. It could take many years of dedicated practice to become fluent in the knowledge and the ability to execute; but once executed it should become the main status que going forward. 

I see three possible reasons for ToC not gaining the adoption in business it deserves:

1.)  ToC proponents claim that it can solve all kinds of management problems from business strategy and sales & marketing to operations and HR, and even how managers think. The reality is that ToC is powerful; but its scope is really limited to operations planning and scheduling. Anything more than this is over selling the prospect. 

Eli Goldratt had many disciplines as part of ToC including Strategy & Tactics, Sales/Marketing which was part of Viable Vision. He committed to companies he could take current total revenue and make that number total profit in 3-5 years. He made a bunch of money doing this, but few companies took him up on the offer. Of those all where in China and India and none that I know of in the United States. The “Thinking Process,” (i.e. https://en.wikipedia.org/wiki/Thinking_processes_(theory_of_constraints) covered getting to the true constraint whether it be physical, policy or marketing. In my experience, it was always policy that was the constraint.

There are many other disciplines “Drum Buffer Rope（DBR）and Critical Chain Project Management (CCPM), Throughput accounting, Supply Chain/Distribution. All of these are used to a limited extent in a small area. But to the question: WHAT’S WRONG WITH ToC (THEORY OF CONSTRAINTS)? in my journey inside different organizations the initial constraint has always been planning and scheduling. This includes the basics of Controlling Work In Process (WIP) and how we use buffers and full kitting to meet the demand objective. The organizations that implemented the Supply Chain/Distribution solution saw great results. In most cases this was mostly around the issues of forecasting and reorder points. This shows that limited implementation in small areas does yield results.

2.)  ToC’s power lies in replacing the rules of local optimization with global optimization, but it hasn’t fully solved the problem of how you measure local performance (a necessity in large organizations). So far, I’ve been able to figure out the local measures to drive global measures by using cause & effect logic; didn’t necessarily get it right the first time.

3.)  ToC started out straight forward and simple; but has been made obtuse and unnecessarily complex over time. Some who implement it are looking to complex solutions because they believe that will correct what they see as a complicated problem.  But all real problems are simple. Because of this we “ToC’ers” continue to impede its broader adoption. I still believe personally that ToC keeps me grounded in simple solutions, but the execution can get complicated. I believe when you get a bunch of smart people in a room, they all seem to navigate toward the 100% solution when a simpler and faster solution would get us 80% there. Something as simple as one priority, instead of 4-5 priority levels and after discussion we end up at 30-40 priority levels that become a real issue with implementing corrective actions.

All this to say with your improvement project, start doing some things and make some hay; but at the same time, you need to be selling the concept and educating the different leaders. I have been thinking about the communication that can be provided for the project and I came up with this; The quote of the day: “Information is a message that reduces doubt”

The better we understand this statement the better able we are to wrap our heads around an interesting conundrum: “The better a message works the first time, the worst it will work the next time.”  The more a message successfully reduces doubt, the less doubt there is to reduce the next time.  The question “W-H-Y” needs to be re-asked and answered in the next communication to find new doubts and work on that message.  The most successful artists, writers, generals, executives, directors, coaches and doctors are good at not relying on what worked the last time, not fighting the last war or playing the last game.  The great communicators know how to move on at the right time.  I believe this is your time to move to the next step.

As part of implementing the ToC concept I believe we need to start working on new messaging by providing (and proving) advancement in process improvements while working for achieving change in the process. Then showcasing that in the next wave of communications. Let’s stop talking about improvements and start proving improvements can happen. Knowhatimean?

This is the way I see it - Comments?