Theory of Constraints Handbook - James Cox Iii [568]
The Professional, Scientific, and Technical Services (PSTS) sector is populated mostly by enterprises where physical constraints matter less than intangible constraints. Indeed, the PSTS sector is substantially different, even from other services sectors, for several reasons.
Copyright © 2010 by John Arthur Ricketts.
Professional, scientific, and technical services are usually customized for individual clients. Repeatability can be elusive when every client wants something different.
Professionals, scientists, and technicians are highly educated and frequently work in teams. These practitioners have high degrees of autonomy because they are hired by clients for their resourcefulness at solving hard problems.
Sales are based largely on expertise. Clients expect the experts to have diplomas, licenses, certifications, publications, references, and genuine insights in their fields.
Delivery depends on intellectual capital, not physical inventory. Know-how is vital in labor-based services. Information technology is vital in asset-based services.
These attributes make PSTS a suitable proving ground for TOC for Services because PSTS is the services sector most different from manufacturing and distribution. Since TOC can work in PSTS, there’s a good chance it will work in any services business. This chapter summarizes the adaptation of TOC for PSTS.
The roots of that adaptation extend back to the founding of TOC. The Goal (Goldratt and Cox, 1992) is one of the best-selling business books of all time. It tells the story of a beleaguered manager who saves his factory from oblivion—and guides it to prosperity—by applying TOC. It’s the seminal work for what’s referred to in this chapter as TOC for Goods (TOCG) to distinguish it from TOC for Services (TOCS).
Reaching the Goal (Ricketts, 2008) explains how and why TOCS differs from TOCG. It’s the foundation for this chapter, but this chapter focuses more on why TOC has taken so long to reach PSTS and what lies ahead in TOCS.
Background
TOC has been around for decades, so it’s reasonable to wonder why it took so long to find an audience in PSTS. The short answer is services are harder to manage than non-services, but unfamiliarity and inertia play big roles as well. So let’s start there.
Barriers to Adoption
TOC knowledge is widely accessible in more than 100 books, some of them best-sellers. However, the majority of TOC books are devoted to manufacturing and distribution, while services dominate most economies nowadays. Thus, new readers not only are confronted with unfamiliar TOC concepts and terminology, but also how those concepts and terms apply to services is an exercise generally left to the reader. And that’s not an easy translation, even for TOC experts.
Consequently, TOC is like most management innovations in the sense that it generates more talk than action, but TOC is notable because the action it does generate leads to demonstrable results. Leading manufacturers have applied the TOC application for operations management to varying degrees, and there are pockets among smaller manufacturers, so adoption is far from universal. In services, where the TOC application for project management is the most obvious fit, no more than one in ten project managers use it frequently. The benefits of TOC are extraordinary, however. Improvements of 20 to 50 percent (Mabin and Balderstone, 2000) are well documented, and TOC is thereby a source of strategic advantage.
So why is one of the most-promising management paradigms of our time so hard to adopt? It’s a journey that cannot be taken one manager at a time. You’ve got to take your management team with you. Even if you’re a