Theory of Constraints Handbook - James Cox Iii [654]
Make more money now and in the future.
Satisfy the market now and in the future.
Satisfy employees now and in the future.
One of these three is the goal for an organization, while the other two are the necessary conditions (requirements) for achieving the goal. The S&T tree ensures that the actions needed to achieve all three are taken.
The Basic Structure of an S&T Tree
The structure of an S&T tree will now be explained to provide clarity before presenting a specific S&T tree. For each strategy (S), there must be a tactic (T). An S&T tree consists of a number of S and T pairs, each presented in a step. The top of an S&T tree consists of one step. Then the next level of the S&T tree below presents at least two steps (horizontal entries on the same level) further detailing the specific S and T pairs needed to achieve the higher level S and T pair, and so on until the lowest level of the S&T tree has been presented. At each level, more detail is provided about how to achieve the higher level. This is why the structure is referred to as an S&T tree. Figure 34-2 provides a visual representation of the generic structure of an S&T tree.
FIGURE 34-2 The generic S&T tree structure (© E. M. Goldratt used by permission, all rights reserved. Source: Modified from E. M. Goldratt, 2008).
Here is the big picture regarding the different levels of the VV S&T trees for organizations:
Level 1 presents the pot of gold (very ambitious objective) strategy (overall).
Level 2 presents the heart/essence of the competitive edge.
Level 3 presents the heart of the change in mode of operation—the broad changes needed in operations and the logic regarding these changes.
Level 4 presents the details regarding the change of mode of operation and the reasons for the change in mode as well.
Level 5 is about how to implement the changes. It does not include the logic regarding the need to change the mode of operation; it is just about how to do the tactics we already agreed to in Level 4.
Within each step, the logic is presented connecting the parts of the S&T tree. Three types of assumptions are needed to provide the logic.1 One is a parallel assumption (PA), the fact(s) of life, presented in logical sequence, which leads us from the strategy (S) to the unavoidable conclusion of what the tactic (T) must be. The S and T are, in effect, parallel or a match to each other. The way to read the connection is, if S and PAs, then the resulting tactic is T.
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Parallel Assumption (PA): The fact(s) of life, presented in logical sequence, which lead us from the strategy (S) to the unavoidable conclusion of what the tactic (T) must be.
S II T: (Parallel Assumption Symbol).
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Another type of assumption is the necessary assumption (NA). The NA is the fact(s) of life that explain why a specific S&T pair is needed to achieve the corresponding higher level S&T pair in the S&T tree. The NA is based on necessity-based logic, meaning that something is necessary in order to achieve something else. The NA presents the current damage of not taking the action described in the step and/or the benefits of taking the action in the step. The NA provides clear motivation for the need to take the step. The way to read the connection is, In order to achieve the higher level step, we must achieve the step below because of the NAs listed in the step below.
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Necessary Assumption (NA): The fact(s) of life that explain why a specific S&T pair (step) is needed to achieve the corresponding higher level S&T pair (step) in the S&T tree.
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The final type of assumption is the sufficiency assumption (SA). The SA is the fact of life that are common sense and commonly ignored, which if ignored will not result in all the steps below being sufficient to achieve the corresponding step above them. An SA is based on sufficiency-based logic. With sufficiency-based logic, we need to verify that all of the components listed are sufficient or enough to achieve the result desired.