The Shark and the Goldfish Positive Ways to Thrive During Waves of Change by Jon Gordon_2 pdf

Thinking for a Change Putting the TOC Thinking Processes to Work Lisa J... Library of Congress Cataloging-in-Publication Data Scheinkopf, Lisa J.Thinking for a change: putting the TOC t

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Thinking for a Change

Putting the TOC Thinking Processes to Work

Lisa J Scheinkopf

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Library of Congress Cataloging-in-Publication Data Scheinkopf, Lisa J.

Thinking for a change: putting the TOC thinking processes to use / by Lisa J Scheinkopf

p cm.

Includes bibliographical references and index.

ISBN 1-57444-101-9 (alk paper)

1 Theory of constraints (Management) I Title.

HD69.T46S33 1999 658.5—dc21

98-52527

CIP This book contains information obtained from authentic and highly regarded sources Reprinted material is quoted with permission, and sources are indicated A wide variety of references are listed Reasonable efforts have been made to publish reliable data and information, but the author and the publisher cannot assume responsibility for the validity of all materials or for the conse- quences of their use.

Neither this book nor any part may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, microfilming, and recording, or by any information storage or retrieval system, without prior permission in writing from the publisher.

The consent of CRC Press LLC does not extend to copying for general distribution, for tion, for creating new works, or for resale Specific permission must be obtained in writing from CRC Press LLC for such copying.

promo-Direct all inquiries to CRC Press LLC, 2000 Corporate Blvd., N.W., Boca Raton, Florida 33431 Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation, without intent to infringe.

St Lucie Press is an imprint of CRC Press LLC

No claim to original U.S Government works International Standard Book Number 1-57444-101-9 Library of Congress Card Number 98-52527 Printed in the United States of America 1 2 3 4 5 6 7 8 9 0 Printed on acid-free paper

St Lucie Press APICS

2000 Corporate Blvd., N.W 500 West Annandale Road Boca Raton, FL 33431-9868 Falls Church, Virginia 22046-4274

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About the Author

Lisa Scheinkopf, CPIM, is a consultant with Chesapeake Consulting, Inc.Headquartered in Severna Park, Maryland, Chesapeake Consulting is wellknown for its success in helping organizations improve their businessresults by using TOC and related system improvement technologies Prior

to joining Chesapeake, Lisa was president of the consulting firm, InSyncSolutions, where she worked with companies to implement TOC principlesand practices Her clients have included some of the top names in thesemiconductor, medical equipment, printed circuit board, and electronicsmanufacturing industries, the Department of Defense, and several univer-sities For nearly 20 years, Lisa held marketing, operations management,and materials management positions with such companies as W.L Gore

& Associates and American Socket Screw Manufacturing Company Shedid extensive development work and refinement of the TOC strategicthinking processes with Dr Eliyahu Goldratt when she was associatedwith the Goldratt Institute She is considered one of the best in the worldconcerning the teaching and application of these tools and is a sought-after public speaker on TOC and its applications, systems thinking, andorganizational improvement Lisa is a founding member of the APICSConstraints Management SIG, and served as its chairperson in 1997 and1998

Most important, Lisa shares her life with her husband of 18 years, Danny,their two daughters, Jennifer and Rachel, and their not-so-mild-mannereddog, Casey She can be reached by e-mail at jonalisa@chesapeak.com.Chesapeake Consulting, Inc.’s web site is located at www.chesapeak.com.SL1019-fmframe Page v Friday, June 23, 2006 9:26 AM

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ABOUT APICS

APICS, The Educational Society for Resource Management, is an tional, not-for-profit organization offering a full range of programs andmaterials focusing on individual and organizational education, standards ofexcellence, and integrated resource management topics These resources,developed under the direction of integrated resource management experts,are available at local, regional, and national levels Since 1957, hundreds ofthousands of professionals have relied on APICS as a source for educationalproducts and services

interna- APICS Certification Programs — APICS offers two internationallyrecognized certification programs, Certified in Production and Inven-tory Management (CPIM) and Certified in Integrated Resource Man-agement (CIRM), known around the world as standards ofprofessional competence in business and manufacturing

APICS Educational Materials Catalog — This catalog contains books,courseware, proceedings, reprints, training materials, and videosdeveloped by industry experts and available to members at a discount

APICS — The Performance Advantage — This monthly, four-colormagazine addresses the educational and resource management needs

of manufacturing professionals

APICS Business Outlook Index — Designed to take economic sis a step beyond current surveys, the index is a monthly manufac-turing-based survey report based on confidential production, sales,and inventory data from APICS-related companies

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viii Thinking for a Change

Chapters — APICS’ more than 270 chapters provide leadership,learning, and networking opportunities at the local level

Educational Opportunities — Held around the country, APICS’International Conference and Exhibition, workshops, and symposiaoffer you numerous opportunities to learn from your peers and man-agement experts

Employment Referral Program — A cost-effective way to reach atargeted network of resource management professionals, this pro-gram pairs qualified job candidates with interested companies

SIGs — These member groups develop specialized educational grams and resources for seven specific industry and interest areas

pro- Web Site — The APICS web site at http://www.apics.org enables you

to explore the wide range of information available on APICS bership, certification, and educational offerings

mem- Member Services — Members enjoy a dedicated inquiry service,insurance, a retirement plan, and more

For more information on APICS programs, services, or membership, callAPICS Customer Service at (800)444-2742 or (703)237-8344 or visithttp://www.apics.org on the World Wide Web

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Dedication

We are formed by our past, live in the present, and hope for the future

This book is dedicated toThe memory of my loving, wise, and courageous father, Sheldon Minow

My husband, Danny, the wonderful man I share my whole being withAnd to our daughters, Jennifer and Rachel, the best expressions

of hope and beauty anybody can find

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Acknowledgments

I know every author says that no book is written alone I am no exception

I am blessed with the support, guidance, ideas, knowledge, love, andfriendship of so many Thinking for A Change would not be if it weren’tfor you I would especially like to acknowledge:

John Covington for his friendship and gentle disrupting; Dan Hicks forhis ability to stay rooted in reality; everybody else at Chesapeake, there

is no better group of people in the world to be associated with; Jim Coxand Johnny Blackstone, for teaching the way professors ought to; Daleand Tracey Houle, Christie Latona, and Wendy Donnelly for their encour-agement and friendship through all boundary-expanding times; DrewGierman and the folks at St Lucie Press for their amazing patience andsupport; Tom McMullen and everyone involved with the APICS CM-SIG,especially my teammates on the steering committee, all of whom ar evolunteers, for sticking with the goal of creating, expanding, and dissem-inating the APICS TOC body of knowledge; and to all my students andclients — I have learned and continue to learn so much from you.Though we don’t know each other personally, I would like to extend

my thanks to Margaret Wheatley, Peter Block, Peter Senge, Stephen Covey,and Dee Hock Your contributions have helped me and many others tounderstand our organizations as living, learning, growing, ever-evolvingsystems And, as such, you have helped put these thinking processes intheir place as the learning tools that they are

Danny, Jenn, and Rachel — any words here would be inadequate toexpress my appreciation for your support and unconditional love throughthis project and life

Finally, my most heartfelt thanks to my friend and mentor, Eli Goldratt.Our journey has led me to better discover and understand myself, grow withconfidence, and help others in ways that I never would have predicted.SL1019-fmframe Page xi Friday, June 23, 2006 9:26 AM

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xii Thinking for a Change

Men of genius are far more abundant than is supposed In

fact, to appreciate thoroughly the work of what we call

genius, is to possess all the genius by which the work was

produced

Edgar Allan Poe, 1844SL1019-fmframe Page xii Friday, June 23, 2006 9:26 AM

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Contents

PART ONE

Part One provides an overview of the constraint-based perspective on systems and organizations, commonly referred to as the theory of con-straints or synchronous management Chapters 3 through 5 will guide you through the fundamental principles and processes that are the backbone

of the thinking process application tools

1 The Theory of Constraints 11

2 First Steps 27

3 Suf fi cient Cause: Ef fect–Cause–Ef fect 31

4 The Categories of Legitimate Reservation 41

5 Necessary Condition Thinking 69

PART TWO Part Two contains the step-by-step guidelines for each of the five thinking process application tools Chapters 6, 7, and 8 are the tools that utilize sufficient cause thinking Chapters 9 and 10 describe the tools that utilize necessary condition thinking Within each of the two thinking types, I have laid out the chapters in the order that the tools ar e most easily learned 6 Transition T r ee 83

7 Futur e Reality T r ee 109 SL1019-fmframe Page xiii Friday, June 23, 2006 9:26 AM

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xiv Thinking for a Change

8 Curr ent Reality T r ee 143

9 Evaporating Clouds 171

10 Pr er equisite T r ee 193

PART THREE The thinking process application tools are quite often combined in order to answer more complex sets of questions In Part Three, I introduce you to two ways that two or more of the thinking process application tools are combined, providing robust processes for understanding and commu-nicating problems and solutions 11 The Full Analysis 221

12 Communication Curr ent Reality T r ee 235

Closing Comments 243

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PART ONE

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Chapter 1

The Theory of Constraints

The whole history of science has been the gradual tion that events do not happen in an arbitrary manner, butthat they reflect a certain underlying order, which may ormay not be divinely inspired.*

realiza-Stephen W Hawking, 1988All of TOC, including the Thinking Processes, is based on some funda-mental assumptions This introduction to TOC will provide you with afoundational paradigm that, when adopted, will enable your use of theThinking Processes to be much more effective

Resizing the Box

Imagine that I am a new employee in your organization, and it’s your job

to take me on a tour in order to familiarize me with the company’soperations What would you show me, and what would I see? Perhaps ascenario like this:

First, we enter The Lobby and meet The Receptionist Next, wewalk through the Sales Department, followed by CustomerService, Accounting, Engineering, and Human Resources Then,you lead me through Purchasing and Production Control, fol-

* Hawking, Stephen W., A Brief History of Time, Bantam Books, 1988.

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12 Thinking for a Change

lowed by Safety, Quality, Legal, and don’t forget the ExecutiveOffices You save the best for last, and we go on a lengthy tour

of Manufacturing You point out the Press Area, the MachineShop, the Lathes, the Robots, the Plating Line and AssemblyArea, the Rework Area, and the Shipping and Receiving Docks

Do you notice the functional orientation of the tour? I’ve been led onwell over a thousand imaginary and real tours They are almost alwaysfunctionally oriented

Imagine now that we have an opportunity to converse with the peoplewho work in each of these functional areas as we visit them Let’s askthem about the problems the organization is facing Let’s ask them aboutthe “constraints.” All will talk about the difficulties they face in their ownfunction and will extrapolate the problems of the company from thatfunctional perspective For instance, we might hear:

• Receptionist: People don’t answer their phones or return theircalls in a timely manner

• Sales: Our products are priced too high, and our lead times aretoo long!

• Customer service: This company can’t get an order out on timewithout a lot of interference on my part I’m not customer service,I’m chief expediter!

• Human r esour ces: Not enough training!

• Pur chasing: I never get enough lead time Engineering is alwayschanging the design, and manufacturing is always changing itsschedules

• Manufacturing: We are asked to do the impossible, and when

we do perform, it’s still not good enough! Never enough time, andnever enough resources

• And so on

What’s wrong with this picture? Nothing and everything Nothing, inthat I’m certain that these good people are truly experiencing what theysay they’re experiencing Everything, in that it’s difficult to see the forestwhen you’re stuck out on a limb of one of its trees

My dear friend and colleague John Covington was once asked how

he approached complex problems His reply was, “Make the box bigger!”This is exactly what the TOC paradigm asks us to do There is a time forlooking at the system from the functional perspective, and there is a timefor looking at a bigger box — from the “whole system” perspective When

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The Theory of Constraints 13

its purpose, we should enlarge our perspective of the box from theFunction Box to the Value Chain Box

Let’s take a look at the Value Chain Box Pretend we have removedthe roof from your organization and, for six months, we hover over it

at an altitude of 40,000 feet As we observe, our perspective of theorganization is forced to change We are viewing a pattern The pattern

is flow You may even describe this flow as processflow Whether yourorganization produces a single product or thousands, the flow looks thesame over space and time, as shown in Figure 1.1 The inside of the

“box” represents your organization The inputs to your organization’sprocess are the raw materials, or whatever your organization acquiresfrom outside itself Your organization takes these inputs and transformsthem into the products or services that it provides to its customers Theseproducts or services are the outputs of the process Whatever the output

of your organization’s process might be, it is the means by which yourorganization accomplishes its purpose The rate at which that output isgenerated is the rate at which your organization is accomplishing itspurpose Every organization, including yours, wants to improve Theykey to improving is that rate of output, in terms of purpose (a.k.a thegoal)

Actually, we can use this box to describe any “system” we choose.For instance, look again at Figure 1.1 Now, let’s say that the inside ofthe box represents your department Your department receives inputs from

Figure 1.1 The 40,000' Perspective, a.k.a The Value Chain Box (From Chesapeake Consulting’s Learning and Implementing Change Workshop, Chesapeake Consulting, Inc., Severna Park, MD With permission.)

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