xvi there is a pervasive need in large businesses to achieve a much better understanding
of the true cause-and-effect relationships between actions and results... As leaders, we give all the units under
our command the direction to continue to work to improve the strength of their link while we ignore that most of them are
not the limiting factor or constraint. Hence, many of these actions yield no improvement in the overall performance. In essence,
we ignore the discipline of the hard sciences and fail to understand the cause-and-effect relationship between the actions
our units may have taken to improve their individual results and whether it will improve the overall result. The challenge
then becomes identifying the true constraint and focusing management attention on lifting its performance while limiting attention
to the nonconstraint resources.
Motivated by the urgency of our business challenge, and inspired by the compelling logic of Eli's
Theory of Constraints, our team embarked on a quest to find ways to use TOC to unlock the trapped potential of our services
business. This wasn't about a solution looking for a problem; it was about relearning the services business from the
ground up, with a focus on getting to the truth of genuine cause-and-effect relationships between the elements of our business
and the management system we deployed to drive its improvement.
xxiii If you've never experienced Theory of Constraints (TOC), it's hard to imagine the impact it can have
when everything comes together. Unsolvable problems become solvable. Complicated solutions become simpler. Elusive
goals become reachable. [JLJ - Sure. Send me one. Make that two.]
xxiii traditional TOC applications had to be adapted in order to work with complex, highly customized services.
p.8 Theory of Constraints (TOC) gets its name from the fact that all enterprises are constrained
by something. If they weren't, they could grow as large and as fast as they wanted. ...for the vast majority
of enterprises growth is really hard. Constraints are why.
p.8 the first step in applying TOC [Theory of Constraints] is to figure out precisely
where the constraints are... The second step in applying TOC is to utilize the constraint to its fullest
extent. If that constraint in the insurance office is a machine that's often broken or a worker who's often absent,
a more reliable machine or worker must be found because the productivity of the entire office depends on this... [JLJ - Ricketts
assumes that the constraints we face are within our own organization, and within our control. It is possible, however, for
constraints to be external to our organization] The third step in applying TOC is to make sure that nonconstraints
keep the constraint busy - but otherwise stay out of the way... The fourth step in applying TOC is to improve productivity
of the constraint because lifting its performance is the only way to lift the office's performance... The final step
in applying TOC is to repeat the previous steps... Theory of Constraints thus gets its name from the central role that constraints
play in determining overall production.
p.8 A constraint limits what can be produced... as a whole. Everything else is a nonconstraint.
p.34 From its origin in [the branch of business] operations, however, TOC has been extended into other business
functions in industry, including distribution, engineering, finance, marketing, sales, strategy, and change management.
p.34 There's also a branch of TOC known as the Thinking Process, which is applicable in
any problem-solving situation... In published cases of TOC usage in services, a common approach is to start with
the Thinking Process and then use it to figure out which TOC applications from industry might apply.
p.37 Somewhere in that production process is a step that cannot produce as many units per time period as
the rest of the steps. That's the constraint... the constraint is hiding in plain sight, and with a little
detective work it can be found.
What's far harder to do is change the perception that high utilization everywhere is a good thing.
The belief that local optimization somehow add up to global optimization is strongly held. Until this policy constraint is
broken, however, the physical constraint cannot be managed.
p.39 An information system that supports DBR [Drum-Buffer-Rope, or the Theory of Constraints applied to
operations] leads to global optimization by optimizing the constraint rather than every step in the production process.
p.60 Despite their obvious differences, industrial and services enterprise all have constraints. Thus, if
the standard TOC applications summarized in this chapter are so useful in industry, it's reasonable to wonder why they haven't
seen wider adoption in services.
p.63 The common theme running through all TOC applications is constraint management. Because
constraints are what keep an enterprise from reaching its goal, global optimization of enterprises has to
address constraints.
p.106-107 Because the original form of multi-project CC [Critical Chain] was invented for industry and relies
on internal constraints, it will hereafter be referred to as CC for Goods (CCG) or CC with
Internal Constraints (CCI). Likewise, because the alternative form was invented for services and
handles external constraints, it will be referred to as CC for Services (CCS) or CC with
External Constraints (CCE).
p.149 direct observation uncovers the constraint by noting which activity or resource type is often
working feverishly while others don't have enough work to keep every resource busy. Direct observation can be done
by outsiders with no preconceived notions or by insiders if they truly observe the process.
p.151 One distinctive aspect of TOC is its focus on constraints. When considering what to improve and how
to improve it, DBRS steers process improvements to constraints. Indeed, nonconstraints that could be improved
often should not be improved, because the investment would not lift overall performance.
p.222 Strategy is the specific way an enterprise chooses to pursue its goal, and change is the way
it realigns... to carry out that strategy.
p.223 TOC reveals what to change - the current state - and what to change to - the future state
- by placing heavy emphasis on understanding cause-and-effect relationships.
p.224 There are a dozen traditional and contemporary schools of thought on how to formulate strategy... None
of the other approaches puts nearly as much emphasis on understanding cause-and-effect relationships as TOC [Theory of Constraints]
does. And no other approach uses constraint management as the foundation for strategy and change.
p.226 [TOC-Based Services Strategy, from Table] Basic elements are... Goals, constraints, innovations, investments
Schools of thought are... Cause-and-effect
Breakthroughs come from... Breaking multiple policy constraints
Strategic constraints are... Deliberately positioned
Guiding principle is... Global optimization comes from constraint management
p.227-228 In TOC terms, an innovation that matters is a change that alleviates or eliminates a constraint...
an innovation that improves a nonconstraint just doesn't matter insofar as the goal goes.
p.237-238 we resist change until we're convinced the situation will be improved; then there's no reason
to resist... Levels of Resistance Versus Phases of Buy-In
1. Disagreement about the problem... Agreeing on the problem
2. Disagreement about the direction of the solution... Agreeing on the direction of the solution
3. Lack of faith that the solution will yield significant results... Agreeing that the solution solves the
problem
4. Too many side effects... Agreeing that the solution will not lead to significant negative effects
5. Solution is too hard to implement... Agreeing on how to overcome obstacles that block implementation
6. Unverbalized fear... Agreeing to implement
p.248 improving a nonconstraint does little or nothing to help an enterprise reach its goal.
p.248 The TOC approach to strategy recognizes that strategy should be built around constraints because
they limit what the enterprise can accomplish even if they aren't incorporated in its strategy. This approach is
based on careful analysis of cause-and-effect relationships between core problems and undesirable effects.
It therefore increases the odds that a change in strategy will move the enterprise toward its goal.
p.249 TOC directs attention to the conditions necessary for a successful enterprise because that's
where core problems are found. Identifying core problems is essential to strategy because they block the enterprise
from reaching its goal.
p.277 The TOC approach to continuous improvement is more focused than others. Whereas conventional approaches
foster local optimization wherever it can be found, TOC says the only improvement that matters is at constraints...
Continuous improvement matters, but only if it's focused on the constraints that stand between the enterprise and its goal.
p.282 despite several decades of innovation and publications in more than 20 languages, TOC is still
controversial because its principles run counter to many prevailing management practices... When the logic of TOC
has you questioning what you thought you knew before, you've already taken a step or two toward breaking your own paradigm
constraint, which is any way of thinking that keeps you from seeing problems and solutions objectively.
p.305 Whether acknowledged or not, constraints are what keep an enterprise from reaching its goal.
That fact frequently gets lost in complex solutions to a seemingly limitless array of complex problems. Thus, TOCS is ultimately the quest for a few simple solutions that each dispel many complex problems.
p.329 System Dynamics is a specific computer simulation method well-suited to observing changes over time
p.336-337 An approach to simulating real processes worth considering is to start with the simplest
practical simulation, and try various enhancements, but retain only those that create genuine insight... Simulations
are not, of course, the same as real processes. Yet it may not be necessary to simulate real processes in all their complexity
to gain useful insights... Indeed, a guiding principle of TOC is the more complex the problem, the simpler the solution
must be.
