Theory of Constraints Handbook - James Cox Iii [636]
Avoiding Disruptions (C←D’)
Maintaining [C] stable operations by definition means [D′] avoiding disruptions to current capability because in complex organizations there are continuous problems aligning the capabilities of the many interactive elements of the organization. Complex organizations have many changing product mixes and varying workloads, which draw upon many interactive constraints. Even in the best of conditions, it is a terrible challenge for each part to live up to its commitments to other parts. Through no fault of its own, the overlapping demands from several critical and simultaneous endeavors can easily result in a department changing from having very little work to being heavily overloaded in just a few weeks. If there is no work, the expensive resources of the group seem excessive and costly. When there is too much work, there are often delays or quality problems. To many parts of the organization, it seems that just as one part gets in control, there is a disruption somewhere else that sends waves of work through the organization causing huge problems. For these reasons, it is critical that the direction of the solution must include a method to keep all parts of the organization aligned (in balance) to [D′] avoid disruptions to current capability.
Doing Both (D←→D’)
We really have a dilemma when we must [D] continually acquire additional capacity yet at the same time we must [D′] avoid disruptions to current capability. This occurs because it seems every added resource or new capacity disrupts, delays, and increases the risk of maintaining stable operations or supporting continuous growth. A large part of complex organizations are individual business units that operate in their own best interest. They continually adjust their capacity through hiring and laying-off, building or shutting down, expanding or relocating. Acquiring highly technical professionals is a long lead-time problem, as is cutting back on expensive human resources. While these changes are somewhat disruptive to the individual business units, if there is an organization-wide requirement for continually adding capacity, the disruptions are magnified. Individual business units can actually compete against each other for a scarce resource pool. Units that try to reduce their local costs often cannot deliver to the changing demands from both inside and outside the organization, leading to delays and other problems. The direction of the solution must resolve this conflict in such a way that [D] continually acquiring additional capacity and [D′] avoiding disruptions to current capacity are not in conflict. Any added capacity must actually promote both stable operations and continuous growth.
Additional Understanding of Complex Organizations
Complex organizations continue to exist in part because they have good overall strategies. Without a reasonable strategy, the many challenges they face would quickly destroy the organization (or convert them to something less than complex). Strategies at the top of the organization are in many cases sufficient; however, as you go lower and lower in the organization the interactions of the various organizational elements become much more complicated. Organizational elements, each trying to do their best, too often are at odds with one another. Conflicting goals between organizational elements at the lower levels not only block the lower elements from performing at their best, but also jeopardize the effective operation of elements above.
FIGURE 33-3 Generic strategy.
As an example, let’s examine Fig. 33-3, which is a very good generic strategic plan taken from Chapters 30 and 31 of It’s Not Luck, by Eliyahu M. Goldratt (1994).
The generic strategy addresses the necessary conditions of the owners, the