How to Cause the Change

What managers know about TOC and what they do with TOC are seldom the same. There are several hurdles. First, when initially becoming aware of TOC, the word "theory" puts some managers off. If they misinterpret "theory" to mean "something that won't work in practice," they can't even get over the first hurdle. On the other hand, if they correctly interpret "theory" to mean "a clear understanding of cause and effect," they're off to a good start (Avraham Y. Goldratt Institute, 2008).

As for the second hurdle, TOC is at odds with a lot of conventional management wisdom, as described in previous sections. When confronted with a demonstration that some conventional wisdom is actually incorrect, most managers react by clinging to it, if not actively defending it. After all, they ask, if so many people believe it, how can it be wrong?

Of course, paradigm constraints like this are the reason why a generation may pass before truly revolutionary ideas in any arena take hold. Therefore, this strong tendency to cling to conventional wisdom is the reason TOC authors and consultants help managers identify core problems, and the faulty assumptions behind them, before introducing the TOC applications that solve those problems (Scheinkopf, 1999).

When an individual manager or a small group of managers gets past the first and second hurdles, there is still a major hurdle ahead. Getting all the other managers, executives, and employees in an enterprise to recognize and accept that conventional wisdom is wrong is arguably the highest hurdle of all. This barrier is, however, precisely what creates sustainable competitive advantage for those enterprises that make the leap to TOC.

Managers are not the only group who can and should be persuaded to adopt TOC. There are also the practitioners, partners, and principals in PSTS. It's not enough for managers to pursue TOC if the people who will be executing the TOC applications aren't convinced as well.

Students, and the professors who educate them, are another vital constituency. Acquainting the next generation of managers is an obvious way to get more TOC adoption, but that requires acquainting the current generation of professors. Those professors often have dual interests in research as well as teaching. Regardless of group, TOC has a specific method for gaining commitment.

Buy-in

The TOC approach to change is called buy-in. Although it sounds counterintuitive, TOC recognizes that the strongest force for change is initial resistance against change. That is, once someone is convinced the situation will improve, there's no longer a reason to resist change, and the commitment to change is stronger than it would have been without this flip in perspective.

Buy-in proceeds in these steps, which must be performed strictly in order (Goldratt, 1999): 1. Agree on the problem.

2. Agree on the direction of the solution.

3. Agree that the solution solves the problem.

4. Agree that the solution will not lead to significant negative effects.

5. Agree on the way to overcome obstacles to implementation.

6. Agree to implement.

Although anyone can follow these steps if sufficiently knowledgeable and motivated, TOC consultants often help clients through these steps because conventional wisdom resists change so strongly. Ironically, those TOC consultants can have just as much difficulty taking their own enterprise through these steps.

How Practitioners Can Get Started

One way to get started with TOC is by studying success stories. They are not hard to find. Many have been published in books and articles. Some can be found on the Web in blogs. Of course, peers who have successfully implemented TOC are perhaps the most credible source of all.

It's also possible to get started with TOC by hiring TOC consultants. Their breadth of experience often exceeds what peers know because consultants have the additional advantage of having seen what works and what doesn't work. Furthermore, if the consultant brings software assets, then that can aid in implementing TOC.

Certification is another way to get started because it requires completion of formal training as well as exams.2 It thus requires demonstrating a level of proficiency above what can be attained on the job or via independent study. This is obviously a path that TOC consultants take.

How Researchers Can Contribute

Researchers also have a role to play in causing change. Field studies, case studies, and simulation studies are all ways to investigate TOC and foster its adoption.

Literature reviews are another potential contribution whose value should not be underestimated.3 When well done, such reviews are used both by practitioners and by other researchers. However, the TOC literature is scattered across several fields and many journals, so the best literature reviews synthesize findings from disparate sources.

For research to have impact outside of academia, it has to be consumable by practitioners and students. This is a challenge because scientific terms and methods that researchers take for granted are alien to non-researchers. Moreover, TOC has its own jargon that can be baffling to newcomers. The result can be publications that are incomprehensible to the audiences who could benefit most.

What Students Should Know

Obviously, students need to know about TOC principles and applications. The more hands-on their education is, the more likely they are to retain what they learn. For instance, simulation games require students to assume roles and play out scenarios based on TOC.

Simulation games are a staple of TOC education, but there's really no substitute for seeing TOC in practice. Plant tours, industry speakers, thesis projects, and internships are well worth considering. Some schools have students work with local firms and conduct a Thinking Process (TP) project to identify what to change, what to change to, and how to cause the change. They then present their recommendations to the manager of the firm.

Students also need to know about the TOC buy-in process because students equipped only with a toolkit of TOC principles and applications will run headlong into opposition outside the classroom. Indeed, some enterprises have a latent pool of untapped TOC knowledge because recent graduates in management programs have almost certainly been exposed to TOC during their education. After graduation, however, they wind up in jobs where no one in their management chain is aware of TOC, let alone comprehends it.

Although many graduates have been exposed to TOCG, few have yet been exposed to TOCS. That is changing, however. Service Science, Management, Engineering, and Design (SSMED) is an academic initiative that involves a broad community spanning academia and services enterprises. SSMED helps academic institutions with curricula and other resources.

FIGURE 29-1 TOC vignettes.

Summary

The appeal of TOC comes from its sound management principles, plus applications that embody those principles. Here are some examples.

Drum-Buffer-Rope is based on the Weakest Link Principle, which says a system can only produce as much as its constraint will allow.

Replenishment is based on the Aggregation Principle, which says inventory or resources are best buffered centrally because that's where consumption varies least.

Critical Chain is based on the Relay Race Principle, which says work rules (execution) determine on-time project completion far more than the project plan does.

Throughput Accounting is based on the Measurement Principle, which says you have to measure the right things to steer an enterprise toward its goal.

All these applications are based on the Pull Principle, which says the most effective management systems pull work through naturally.

TOCG and TOCS are based on the same fundamental TOC principles. Therefore, they are complementary. Figure 29-1 shows TOC vignettes.

RG manages inventory that rarely returns once shipped.

RS manages resources that regularly return for reassignment.

CCG manages projects when the enterprise constraint is internal.

CCS manages projects when the enterprise constraint is external.

DBRG manages operations when capacity is relatively fixed.

DBRS manages operations when capacity is relatively flexible.

TAG provides measures when inventory is abundant.

TAS provides measures when there is no inventory.

PSTS is the services sector most different from manufacturing and distribution where TOC began. Because TOC works in PSTS, where the conditions are extreme, there's a good chance TOC will work in any services business.

References

Avraham Y. Goldratt Institute. 2008. The Theory of Constraints and Its Thinking Process. New Haven, CT.

Corbett, T. 1998. Throughput Accounting. Great Barrington, MA: North River Press.

Goldratt, E. 1999. Goldratt Satellite Program Session 6: Achieving Buy-in and Sales. Broadcast from Brummen, The Netherlands: Goldratt Satellite Program.

Goldratt, E. and Cox, J. 1992. The Goal: A Process of Ongoing Improvement. 2nd. rev. ed. Great Barrington, MA: North River Press.

Goldratt, E. M., Schragenheim, E. and Ptak, C. A. 2000. Necessary But Not Sufficient: A Theory of Constraints Business Novel. Great Barrington, MA: North River Press.

Mabin, V. and Balderstone, S. 2000. The World of the Theory of Constraints: A Review of the International Literature. Boca Raton, FL: St. Lucie Press.

Ricketts, J. A. 2008. Reaching the Goal: How Managers Improve a Services Business Using Goldratt's Theory of Constraints. Boston, MA: IBM Press.

Scheinkopf, L. J. 1999. Thinking for a Change. Boca Raton, FL: St. Lucie Press.

Spohrer, J. and Kwan, S. K. 2008. Service science, management, engineering, and design (SSMED): Outline and References, January. http://www.ibm.com/developerworks/spaces/ssme Umble, M. and Umble, E. J. 2006. "Utilizing buffer management to improve performance in a healthcare environment,"European Journal of Operational Research 174:10601075.

About the Author.

John Arthur Ricketts is a distinguished engineer in IBM Corporate Headquarters. As a consulting partner and technical executive, he has dealt with many services management issues, including those faced by clients in their own services businesses. His work in applied analytics led him to become a focal point on Theory of Constraints (TOC), and then to delve deeply into its potential for services management. His book, Reaching the Goal: How Managers Improve a Services Business Using Goldratt's Theory of Constraints, was published by IBM Press.

Dr. Ricketts' research and teaching have won awards from the Decision Sciences Institute and the Association to Advance Collegiate Schools of Business, as well as IBM. Prior to joining IBM, he was a professor, manager of applied research, and director of software engineering. Since joining IBM, he has worked on business development, service delivery, professional development, intellectual capital development, and strategic initiatives. His graduate degrees are in management and information systems, with supporting fields in computer science and behavioral science.

CHAPTER 30.

Customer Support Services According to TOC1