What Is Theory Of Constraints Consulting And How Is It Applied As TOC Solutions?
Compared to white shoe management consulting, the theory of constraints consulting or TOC consulting is a new way to consult. Organizations are often the sum of many moving parts. Each part of an organization is essentially a sub-system of a larger system. Most sub-systems align to a common organizational goal that might be conflicting with the sub-system’s goal or capacity or competence to produce an aligned result. Theory of constraints consulting attempts to address these conflicting ideologies within an organization.
What is Goldratt’s Theory of Constraints (TOC)?
Dr. Eliyahu Goldratt developed the theory of constraints, which led to TOC consulting. One of the success factors of this management methodology is its inherent focus on immediate activities that promote improvement. The top priority is to remove the most pressing constraint, especially in organizations with an urgent need to improve. Essentially TOC solutions are focused on rapid improvement within a timeline of 3 to 6 months, unlike strategy consulting, where the timeline is between 3 to 6 years or even more.
What are the features of a successful implementation of the TOC model?
Theory of constraints consulting focuses on the following implementation touch-points.
- Increase in profit on an immediate basis
- Fast improvement by removing the most immediate constraint that is preventing profits
- Critical area identification and prioritization to remove constraints based on its criticality to the business
- Improved capacity by optimizing production capabilities to enable organizations to increase their production
- Reduced lead durations to increase product-to-market and market feedback –to-product development lifecycles
- Reduced inventory build-up to remove bottlenecks that lead to the pileup of inventory
What is the thinking process adopted by consulting firms applying the TOC model?
The best supply chain consulting firms used a standard thinking process model while applying the TOC and TOC consulting approaches. The thinking process is a highly optimized one and is very helpful when dealing with complex organizations with many interdependencies. Root causes that produce undesired effects are first identified and removed. The following questions are asked in this regard by the theory of constraints consulting agency:
- What are the areas that need change?
- What is the outcome of the change?
- What are the actions to be undertaken to effect the change?
What are the different trees using in the TOC model by the theory of constraints consulting companies?
Theory of constraints consulting companies, when applying the TOC model, use the following decision trees.
|
Tool
|
Role
|
Detail
|
|
Current Reality Tree
|
Describes the current state of the organization
|
It can be a diagram that shows the current state. Undesired effects are identified, and the root cause is identified in the diagram.
|
|
Evaporating Cloud Tree
|
Potential improvements are evaluated
|
Specific changes are identified diagrammatically. The changes are intended to removed undesired effects.
|
|
Future Reality Tree
|
A diagram that represents the future state of the organization
|
The action of injecting changes and the future state of the organization are depicted diagrammatically.
|
|
Strategy and Tactics Tree
|
Represents a plan of action for improvement
|
Diagrammatically represents actions that promote improvement
|
Conclusion
TOC consulting is a new age way to consult. TOC solutions are being applied by the best supply chain consulting firms to transform businesses into profit-producing ones.
|
Article Directory /
Arts, Business, Computers, Finance, Games, Health, Home, Internet, News, Other, Reference, Shopping, Society, Sports
|
