Theory of Constraints Handbook - James Cox Iii [364]
TABLE 18-1 Manufacturing S&T Strategy for 1- Reliability Competitive Edge
In a VV S&T Tree, the strategy strives to keep the constraint usually in the market. Internal capacity is managed to be a step ahead of the market. This is accomplished through a combination of a TOC logistics solution and processes to manage capacity. For example, in the manufacturing S&T Tree, the scheduling and execution logistics called Simplified Drum-Buffer-Rope 5(S-DBR)6 (see Chapter 9) is used in combination with additional steps for controlling promises to the markets when internal constraints emerge. The S&T Tree also includes steps to elevate capacity proactively in a more timely way.
Parallel assumptions shown in Table 18-1 provide insight into why the tactics make sense as a means to achieve the strategy. The assumptions may indicate facts or warnings you must take into account in coming up with tactics or facts that will make it possible or easier to achieve the strategy. Since VV goals in this strategy imply fast growth in net profit, the parallel assumptions in box 1 contain two warnings:
First Parallel Assumption warning—Don’t try to achieve this vision by cost savings. It must be done by growing Throughput continuously.
Second Parallel Assumption warning—If you don’t get results quickly, you will exhaust one of your most precious resources—the top management team. Do that and you have a high likelihood of killing the entire strategic effort.
Tactics explain how to achieve the strategy. At this high level in the S&T tree, the statements are very general conditions that must be implemented, much as you might find expressed in “Injections” in a Future Reality Tree (FRT; part of the TOC TP). At lower levels in the tree, the tactics represent actions that individuals or small teams will take, much as you might find in a TOC Transition Tree (TRT). In the one tactics statement shown in Table 18-1, which is generic for many S&Ts, the organization is told to implement five components:
1. Build a decisive competitive edge—How? The answer is detailed at lower levels. What is a decisive competitive edge? It’s a capability that the market needs to get a significant result. It’s so powerful that the company will be able to choose its customers instead of its customers choosing them. The company will be able to grow its business at will. In the Manufacturing S&T strategy, for example, the decisive competitive edge is reliability, as represented by sustained, consistent DDP that is much higher than the industry average. In 3.1.1 (not shown here, use Harmony S&T Viewer), the S&T calls for using S-DBR to achieve the reliability strategy.
The tree goes on to explain in level 2.1 (see Table 18-2) that such an edge only applies to markets where suppliers are very unreliable combined with the condition that the customers experience significant damage from the unreliability. This is a new type of assumption, called a “necessary assumption,” found in every box below the first level, which explains why the strategy is necessary or why the strategy takes a given direction.
2. And the capabilities to capitalize on it—These are the sales and marketing capabilities. Some of the greatest advances in TOC thinking over the past five years have been in implementing sales practices, lead generation, and processes to increase sales success. The processes define target marketing, selecting “business deal” salespeople, understanding the real benefits of reliability to a customer, creating the offer material, preparing sales people, test launching the offer, defining the sales process steps, fully rolling out the offer with all sales people, monitoring the sales process to continually improve and prevent prospects from being lost, and generating leads so