Theory of Constraints Handbook - James Cox Iii [378]
6. Layoffs are rare. Never is preferable, but if a layoff is absolutely necessary due to cash flow threat, it’s not repeated within a 5-year period.
Two Forms of Strategy and Tactics—TP and S&T Trees
Several books describe TOC TP and how to construct Evaporating Clouds (ECs, sometimes called conflict diagrams) and an FRT using TOC TP (see Dettmer, 2007; Scheinkopf, 1999; Chapters 23, 24, and 25 of this Handbook). The following brief discussion assumes that you already have knowledge of this subject matter.
The two different formats of TOC strategy (FRT and S&T) have been discussed and illustrated previously. In order to construct an FRT, it’s usually necessary also to construct ECs in order to better understand and overcome the root cause of major system problems. In addition, ECs provide assumptions and injections that can help lead to a direction for a solution.
Mapping:
S&T Tactic = Injection in FRT
S&T Strategy = DE in FRT
S&T Assumptions may equate to some entities in an FRT that build sufficiency in the cause-effect logic of an FRT S&T mapping to EC: An EC is a powerful tool, which many TOC practitioners use to better understand the problems and find directions toward a good solution. Several elements of an S&T can be discovered using such a tool. For example, ECs can be used to choose a strategy in an S&T (for example, an EC about different directions for a solution may point to one strategy over another). An EC can also help identify a tactic in an S&T (for example, in a conflict related to achieving the strategy, where the strategy is the common objective of an EC, one or more of the assumptions in the diagram may lead to a tactic to overcome the assumption). S&T assumptions may also be identified directly from assumptions in the EC.
There are different perspectives on the use and usefulness of the two different formats. For example, some people believe that the logic of a strategy is best developed using the 5FS and TP, and best communicated to others using the S&T format. My personal experience is that a strategy can be developed using either tool, depending on how your mind is trained.
The free Harmony viewer introduces the S&T format and brief instructions on how to construct an S&T from the beginning.
Integrating Other Methodologies Such as Lean and Six Sigma
To sustain any organization, TOC provides a significant part of the answer. Lean, Six Sigma, and other methodologies and knowledge complete the solution. Processes are needed to provide:
Flow of the product or service quickly and efficiently enough to profitably meet customer demands (TOC provides logistics for flow).
Quality sufficient to meet customer needs (Six Sigma is a common methodology used to increase quality).
Efficiency sufficient to competitively meet customer needs (Lean is the most popular methodology for removing waste from a system).
While each methodology claims to provide benefits in all three necessary conditions, the strength of each, in my opinion, is as highlighted previously. The common positioning within TOC is that the constraint should guide where to apply Lean and Six Sigma efforts. Lean and Six Sigma literature is filled with similar sentiments, that is, that those methodologies are the main ones, and any others should be subservient. The assumptions behind the TOC guidance are:
1. When other methodologies are applied everywhere, the resources needed to address a constraint end up being tied up. These actions distract from exploiting and subordinating steps.
2. When other methodologies are applied everywhere, much of it is a waste of time because benefits accrue to the company only if the actions result in increasing goal units of the company.
After over 40 years of business experience and 15 years of TOC experience, my current assumptions are:
1. We cannot predict,