Theory of Constraints Workshop Descriptions

Our TOC Workshops are Extraordinary!

 

While we are always prepared to custom-build workshops for specific circumstances, we offer three primary workshops:

  • On demand: A thought-provoking 4-hour (1/2 Day) Introduction to TOC and Synchronous Manufacturing.

This is an extraordinary, challenging session where 99% of the material is new to participants. It answers the questions “What is the Theory of Constraints?” and “How is TOC different?” in a way that no-one ever forgets.

We start with the basics — measurements and fundamental principles. We conduct a jaw-dropping expose of why Cost Accounting data is worthless for Operational decision-making, and illustrate this with examples in production, sales, marketing, engineering, purchasing, quality management, capital acquisition, and process improvement.

Participants develop the 5 Focusing Steps of the TOC for themselves; Then they apply these principles, along with their new awareness of “Fundamental Measurements” and “Constraints versus non-Constraints” to examples of production, sales, marketing, engineering, purchasing, quality management, capital acquisition, and process improvement.

We dive briefly into issues of pricing, and continuous profit improvement by continuously shifting the product mix towards the most profitable products — which is NOT information which can be gleaned from Cost Accounting.

  • On demand: A 1-day Introduction to Theory of Constraints  workshop.

The morning session follows the same path as the 1/2-day session described above.

Then in the afternoon we expand the 3 foundation elements — new measurements, awareness of Constraints versus non-Constraints, and the 5 Focusing Steps of the TOC — to cover the shop floor scheduling and production approach in some detail.

This is the foundation for short lead time production with low inventory that achieves 99% on-time or better, and boosts shipping capacity by 20% or more with no additional head-count.

Then we look briefly at the other major TOC applications; to Distribution and Supply Chain, Critical Chain Project Management, Marketing (the infamous Mafia Offer) and Sales (Sales Process Engineering); and the TOC perspective on Strategy & Tactics.

Finally, we discuss the alignment of TOC, Lean and Six Sigma for maximum impact; including, the improvements that can be gained even from a company that has given up on a lean implementation, and a company that has a successful Lean implementation.

  • On demand: A 2 -day, 2.5-day or 3-day Synchronous Manufacturing workshop

Typically for a single company, as a key element in a company’s exploration of TOC; or as essential education in the early stages of implementation.

This workshop has no equal in any other body of knowledge. World-wide, companies like Intel, Hewlett Packard, Procter & Gamble, and Boeing have experienced this workshop; so have thousands of members of the US military. I have taught this at UBC, and Caltech; but more commonly I have delivered this workshop to small to mid-size manufacturers in BC and across North America.

The session starts with the same 4 hour introduction to the Theory of Constraints, its principles and measurements.

But participants then move into a position of decision-making and execution in their own simple manufacturing businesses, using computer simulations of a production environment which were developed by Eli Goldratt, the originator of the Theory of Constraints technology.

Working in pairs the participants have the clear goal of making money in plants that have few products, clear demand; vendors, employees and resources that all perform superbly; 100% accurate data, and little or no process variability.

A “dream” plant!

Yet despite these conditions, and to the surprise of the participants … profits prove surprisingly tough to come by!

Participants are challenged to identify what made it so difficult. Their intuition is explored … then methodically, a constraint is surfaced and a plan of action developed to address the new reality. The group returns to the computers, a new simulation is ran … and the results fuel the next cycle of debriefing, analysis, planning and testing.

Step by step the participants apply the 5 focusing steps of the Theory of Constraints, at each step identifying the problem in their simulated environments, the direction of the solution, and finally the detailed procedures and systems needed to apply the principles effectively.

Concepts such as “Exploit” and “subordinate” take on a practical form. Scheduling fallacies suddenly become clear, and disappointing investments in ERP software are also explained, with clear cause-effect understanding. Issues of batch size, and aspects of lead time and on-time delivery come to the fore in discussions. There are a lot of “Ah-ha’s” in this process.

By the time participants are 75% of the way through the workshop the group has the plant ticking over sweetly with little management time being needed … while generating very high Throughput and superb on-time delivery, with low inventory, and with fast flow through the plant leading to very short cycle times.

A real success story!

All seems well, the foundation appears to be laid for some lucrative sales growth …

… but when participants are given the opportunity to take on some added volume, with the potential to boost profits, the plant’s performance quickly and shockingly deteriorates.

A whole new depth of understanding of cause and effect is generated as the group recognizes how often they’ve seen these same problems in real life associated with sales growth or capacity downsizing … and understands clearly, for the first time, the underlying causalities behind the problems of both scenarios, and the nature of the changes that have to be in place to sustain serious growth.

Participants then develop the thinking and the mechanisms to support profitable sales growth with no threats to delivery and no increases in lead time as the volume grows.

This is a highly-interactive, powerful workshop, fast paced and accelerating as the group’s intuition develops.

While some managers consider even a single good idea a worthwhile investment of their time, this workshop is a treasure trove.

It is always taught by Steve Jackson, with 28 years experience in Theory of Constraints.

What we add when we expand the workshop to 3 days …

  • More Buffer Management – for short term protection, for priority management, and for continuous improvement
  • The Replenishment technique for Distribution and Supply Chain management
  • More on Mafia Offers (Constructing offers so good, the market can hardly refuse them)
  • Sales tactics in support of Mafia Offers

The fast and large boost to competitive and profit performance that a company achieves through a Theory of Constraints implementation is only a starting point; many other TOC elements may be relevant to a particular client’s environment.

For example, continuous improvement, which is touched-upon in the “standard” session, can be greatly expanded to explain the powerful and unique Buffer Management concept that is essential to so many Theory of Constraints applications.

With this new understanding in place, participants first apply the Buffer Management concept inside their simulated plants, recognizing the support for both day-to-day decision making (priorities) and the foundation for TIGHTLY FOCUSED continuous process improvement.

Then, the concept may be applied to Stock Buffers – which opens the door to a new level of control over raw materials, over intermediate stocks within the plant (no, NOT WASTE! – when done properly. The strategic advantage can be the basis for tremendous sales growth), and to a new level of control over Finished Goods inventory in the plant and downstream – even to the level of a consumer outlet’s shelves.

The Distribution/Supply Chain solutions and the high-performance plant operations combine to offer downstream customers an unprecedented availability of product with reduced inventory levels, completely defying common wisdom – and this potential leads naturally to the Sales and Marketing solution.

Now, this application – to Sales and Marketing – has no equal in any other improvement technology; and the impact can be tremendous.

Think about this: if a company cannot generate new sales almost at whim, even in a market downturn … then all the Necessary Conditions for survival are not in place, and the company is vulnerable. A downturn will mean lost sales and revenues, reduced profits, and a threat to job security.

Most companies simply tolerate this … it’s just the way it is. “As the <fill in the blank> markets go, so we go.”

But the ability to generate sales at normal rates (or close to normal) during a market downturn, while extremely valuable, is still a defensive posture.

What about going on the offensive? What does it take to generate so many new sales, routinely and systematically, that the company is growing at 35% or more per year … methodically?

Not by simply riding a hot market, but by having faucet-like control over sales volumes?

One crucial element for both the defensive and aggressive strategies is the need for a definitive competitive edge – and that’s exactly what the Mafia Offer, or Unrefusable Offer, provides. This is one element that completely differentiates the Theory of Constraints from any other body of knowledge.

But even so … it’s not enough.

Having a Mafia Offer is an essential start but many more practical elements come into play to enable sales people to sell the Mafia Offer. These elements can all be addressed in the expanded version of this workshop.

The 4-hour session… another perspective

This session introduces the Theory of Constraints and the five focusing steps, which simply make sense to everyone … but then it challenges some VERY sacred cows. Within the space of an hour, participants are stunned to realize the damage to profitability from strategic and day-to-day decisions they consider routine, and unimpeachable – and all based formally or informally on precise cost accounting data.

They see for themselves exactly how these decisions are actually contrary to profit-making, time after time, in ways they never suspected – and the understanding suddenly explains so many issues and performance problems arising in previous years (and red flags some of the current planning!).

This can be used as exploration towards a Theory of Constraints implementation, simply a way to understand the TOC basics – or it can be used by any company wishing to challenge their managers to view their business, and the process of improvement, through an entirely different lens than their current thinking.