Theory of Constraints Handbook - James Cox Iii [768]
1Scientific research shows that approximately 90 percent of business process re-engineering efforts fail to achieve tangible results (A.T. Kearney M&A study referenced in Bruner, 2004.). Fifty percent of all mergers and acquisitions fail outright, while most fail to realize expected synergies (McDonald, Coulthard, and de Lange, 2005). Fewer than 50 percent of companies undergoing restructuring or downsizing realize lower costs or higher productivity (Schneier, Shaw, and Beatty, 1992).
2See Section VI for a discussion of the TOC Thinking Processes.
3The TOCICO Dictionary (Sullivan et al., 2007, 43) defines strategy and tactic tree (S&T)—A logic diagram that includes all the entities and their relationships that are necessary and sufficient to achieve an organization’s goal. The purpose of the S&T tree is to surface and eliminate conflicts that are manifested through the misalignment of activities with organizational goals and objectives.
Usage: Organizational strategy specifies the direction of the activities that purport to address longer range problems and issues. Tactics are the specific activities needed to achieve the strategic objective involved in implementing organizational strategies. Since strategy and tactics exist and must be synchronized within various organizational levels, this logic tree translates high level strategy down to the level of day-to-day operations. (© TOCICO 2007, used by permission, all rights reserved.)
4Some tables are mentioned in the text that are not shown in chapter tables. Use the Harmony to view the full S&T tree structure and tables. For example, this S&T tree is four levels (numbered in upper left corner) and 29 tables. Hence only a few tables are shown here for illustration. The Harmony viewer can be downloaded at: http://www.goldrattresearchlabs.com/?q=node/2
5simplified drum-buffer-rope (S-DBR)—The process of managing operations based upon a shipping buffer, a market drum, and secondary attention to any capacity constrained resources (Sullivan et al. 2008, 43).
6See Goal Systems International Website. Books and papers: Simplified Drum-Buffer-Rope. 2000. http://www.goalsys.com/books/documents/S-DBRPaper.pdf for an excellent description of the concept by Schragenheim and Dettmer.
7For the full story, see Furniture Industry News Web site, Furniture Today archives, Issue 32, April 12, 2004. http://www.furnituretoday.com/article/25111-California_s_Orman_Grubb_closing_doors.php
8In such a chapter of a book, it is impossible to anticipate, let alone answer all possible questions related to an S&T. However, if you have questions, you are welcome to email them to gerryikendall@cs.com. I will do my best to provide meaningful answers to clear, concise questions.
9Typically, the only projects that are executed without the intention of bringing independent value are mandatory projects (e.g., those dictated by government regulations). Often, organizations split a single initiative into multiple projects, where some are prerequisites and do not bring value until the follow-on projects are completed. In the author’s opinion, this is a grave mistake. From observation, often the prerequisite projects are completed with huge, sometimes indefinite, time lags before executing the follow-on projects that deliver to the bottom line.
10The TOC pull replenishment system also provides automatic adjustments, up or down, to inventory buffers at each link in the chain. When the actual inventory level at a location appears too frequently in the red zone, the target inventory level is automatically increased by one third. Similarly, when trends are down, the inventory will be in the green zone for most or all of the replenishment period. Then inventory targets are adjusted down by one third.
11The implication of having less inventory at the retail level is counterintuitive for manufacturers and distributors. In the TOC distribution paradigm, retail sales grow for all the reasons explained in this section. Therefore, manufacturers and distributors also gain greatly from increased