Theory of Constraints Handbook - James Cox Iii [279]
“I also became very interested in coping with setbacks,” she said. . . “(being) so concerned about not slipping, not failing” (Trei, 2007).
We find a very similar situation concerning fixed organizational targets and standards set as departmental goals. Meeting the target that was set becomes the only concern of the department managers, killing any motivation for ongoing improvement beyond sustainment.
Individuals who excel in education, sports, and industry instantly relate to Dweck’s findings. Tiger Woods, for example, coming off arguably one of the greatest seasons in golf history, made the decision that it was the right time to completely reconstruct his golf swing. Was this foolish? Not if you understand that Woods’ motivation is not driven by the recognition of being the best in the world or a fear of falling from that status. He simply is obsessed with seeking perfection in a game where such a goal is unattainable.
A Case Study
Let’s explore another example. A company is vertically integrated and owns its supply chain from raw material through assembly of finished product to be delivered to the dealer or directly to the end user. Purchased parts from outside vendors feed different levels of the bill of materials (BOM), but the rest of the process is internal although managed at different plants in different geographical regions. The BOM for major end items is deep (10 to 20 + layers) and, to most people, this would be considered a very complex environment to manage.
Obviously, organizations like this one that are of any size will be broken into manageable pieces to be directed and operated by different individuals. How are meaningful measures provided to the parts of the whole so that they act as one? This company, facing the heights of complexity and delivery challenges, had to take a first step that most of the team would have argued to be the exact opposite of minimizing this complexity—tear down the walls that separated the organization into different business units. It was a necessary condition to any alignment of action and improvement to strip out the systems and metrics that encouraged the whole organization to be viewed as the sum of its parts. This local viewpoint drove organizational conflict over the use of its shared resources (i.e., capacity, inventory, etc.)
Once the artificial segmentation of the organization was removed, the pool of capacity was available to be directed to the highest need and Throughput opportunity for the company as a whole. Because customer tolerance time (CTT) was less than some of the very long lead-time parts were, it was necessary to design and implement a global ASR system immediately followed by DBR (see Chapter 12 on ASR).
Highly visible buffers at only the control points of the organization let all management see the real-time status of the performance of the entire company. No matter how large and complex, the simplicity of TOC allows relatively few points of data collection to provide the relevant information for focusing all decision making. BM and the five questions become the primary day-to-day measurement of the health of the system. Most importantly, the entire organization’s measurements are synchronized from local to global through measuring the resources of each feeding link to its buffer. Every cycle time reduction allows for a reduction in the stock buffers supporting its feeding links. For an in-depth understanding and a case demonstrating the dramatic effect this can have on a supply chain, see Chapter 12 on ASR.
Given the size and complexity of this organization, this company designed a central planning function to oversee the trends of the strategic buffers. This allowed for leveraging capacity system-wide, an objective feedback system for upper management, recommendations for improvement initiatives (with the supporting evidence), and an accountability loop to ensure follow-through to the five questions. It was vital that this team also become wellversed in conflict clouds and the tactical thinking processes (Clouds, Negative Branch Reservations