Jelena Fedurko-Cohen - 39 - TOCPA - Colombia - 12-13 April 2018 - Eng

www.tocpractice.
com
39th TOCPA International Conference

12-13 April 2018, Bogota, Colombia
The need to carefully use the

TOC Thinking Processes for
better decisions
Jelena Fedurko-Cohen
tocExpert Ltd, Estonia
17 November, 2017
Jelena Fedurko-Cohen
Jelena is a Co-Founder and Co-President of TOC

Practitioners Alliance TOCPA, CEO and Senior TOC Expert
at tocExpert, co-founder of tocExpert Network and TOC
Practitioners Worldwide group on Facebook.
Jelena has been involved in TOC since 1999. She is a TOC
expert, trainer and consultant, and provides TOC
implementation support in production, supply chain and
project management. Jelena has worked in various
countries all over the world, including Japan, Poland,
Germany, Switzerland, Turkey, Italy, Russia, Ukraine, India,
China, Chile, Colombia, Mexico.
Jelena is the author of four advances books on TOC

Thinking Processes: Behind the Cloud (2011), Through
Clouds to Solutions (2013), Typical mistakes in working
with TOC Logical Tools (2014), A Good Strategy & Tactic
Tree (2016). Together with Oded Cohen Jelena has co-
authored the book Theory of Constraints Fundamentals jelena@tocexpert.com
(2012). She has many publications and video www.tocexpert.com
presentations, and has contributed to a number of books www.tocpractice.com
on TOC, the TOCICO Dictionary, and the bank of TOC facebook.com/groups/1014476831927643/
materials on TOCPA portal. Jelena translated and edited
several major TOC books. th
www.tocpractice.com 39 International Conference of the TOC Practitioners Alliance - TOCPA
What is decision
making?
There is a general confusion between making a
decision and finding a solution.
Both require that:

•A person should have a good knowledge of the
environment
•They should be able to trust their intuition
The similarity ends there.

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA
Making a decision
Making a decision does not imply development.

To make a decision a person should have:
• clear understanding of authority and responsibility
• options from which to choose
• a mechanism to understand which one is the best
option.
After making a decision:

• understanding of the signals from the reality that
indicate whether the decision is giving the expected
outcomes, or whether it needs a further adjustment.

Finding/developing
a solution
If THIS is a solution, then what is THE PROBLEM?
1. How to 2. Is it an
understand underlying
7. How to check that we have a
that the solution problem or only
will not bring new problem? its symptom?
problems?
3. How to
6. Does the
Developing a formulate the
problem?
solution solution
remove the
problem?
4.Is it a REAL
5. How to look
problem?
for a solution?
Thinking Processes
Strategy: Management enhance their ability to improve the performance

of the system under their responsibility
Tactics: Management employ the TOC Management Tools
Mindset Current Reality Future Reality Transition POOGI

Understanding Establishing the Implementing the Continuous
Logic based the problem Solution Solution Improvement
Management WHAT to Change What to Change TO HOW to Change How to Grow
TOC Thinking Processes

Thinking Processes


• Pivot
• U-Shape • UDEs • Ambitious •Fire-Fighting
• Direction
• C&E • UDE Cloud Target Cloud
• CLR • Consolidated • Injections • PRT • Inner Dilemma/
• Inner Dilemma/ Cloud • DE • Detailed plan Conflict Cloud
Conflict Cloud • Core Cloud • S&T
• CRT • NBR
• FRT

Finding/developing
a solution
What TO tools we use UDEs/
Promlems
Neg outcome
Deeper
1. How to reason
1. The difference 2. The difference between a
understand 2. Is it an
problematic
Injection between what we
7. How to check thatand
have wewhat
havewea underlying UDEs
situation/symptoms/
that the solution would like to have andproblem
the core cause of their
or only
7. Checking the problem? existence
will notfor
Injection bring
NBRsnew its symptom?
problems?
B
A Inj 3. How to
C Developing a 3. The structure
formulate
and wording the
of
6. Does the the CLOUD
problem?
6. Checking that
solution
the Injections to
solution B D
remove theC
satisfy B and UDE
A
problem? UDE UDE UDE
C D’
4. Checking that the
UDE НЖЯ
Cloud causes UDE Proble
5. Surfacing 4.Is it a REAL m
B D 5. How to look D D’
UDEs/symptoms or
A assumptions and problem?
explains the essence of B D
for a solution?
finding solutions B C
A
C D’ A
the problem D
C ’
Decision-making and TP
To make a decision a person

should have:
• clear understanding of No TP –
authority and responsibility it is given
• options from which to Can
choose Thinking
• a mechanism to Process
understand which one is the be used
best option. here?
To use the Cloud for
decision making is WRONG!!
The Cloud – the MAJOR logical instrument for understanding a
problem/conflict/dilemma and developing a solution.
D
B D
One of the two

conflicting
A actions
C D’
The other one of
the two
conflicting
actions
D’
To achieve what? D
B D
The need that
we want to Fire “the star”
A satisfy by the sales person
action in D
C D’
The need that

we want to Do not fire
satisfy by the “the star”
action in D’ salesperson
To achieve what? D’
To achieve what? D
B D
Prevent discipline
deterioration in the Fire “the star”
A sales department sales person
C D’
Do not fire
Retain key
“the star”
accounts
salesperson
To achieve what? D
B D
Prevent discipline
The common
To
objective
achieve achieved by
what? having B and C C D’
Do not fire
Retain key
“the star”
accounts
salesperson
To achieve what? D
B D
Prevent discipline
To Ensure smooth
achieve functioning of
what? the company C D’
Do not fire
Retain key
“the star”
accounts
salesperson
B D
Prevent discipline
Ensure smooth
functioning of
the company C D’
Do not fire
Retain key
“the star”
accounts
salesperson

B D
Prevent discipline
Ensure smooth
functioning of
the company C D’
Do not fire
Retain key
“the star”
accounts
salesperson

B D
Prevent discipline
Ensure smooth
functioning of
the company C D’
Do not fire
Retain key
“the star”
accounts
salesperson

B D
Prevent discipline
Ensure smooth
functioning of
the company C D’
Do not fire
Retain key
“the star”
accounts
salesperson
DO NOT USE THE CLOUD TO MAKE DECISIONS!

YOU ARE IN A CLOUD PRECISELY BECAUSE YOU ARE UNABLE
TO DECIDE!!
THE CLOUD IS A TOOL TO FIND THE SOLUTION TO THE SITUATION WHEN YOU
CANNOT DECIDE!!
TP for DECISIONS can be
used only in 2 areas (and
NOT for MAKING a decision!)
• For JUSTIFYING the decision
• For ENSURING that the decision will be

IMPLEMENTED

Justifying the decision
The best TP tool for

JUSTIFYING A DECISION
is a format of a
Box (Step) of the Strategy

and Tactic Tree

S&T Tree Box (Step)
Necessary Why this box is a necessary condition to achieve the

Assump.(NA) “parent” box and why we will spend managerial
effort and time to deal with this area.
Strategy WHAT WE WANT TO ACHIEVE in this box to
enable implementation of the box on the higher
level. The deliverable of the Strategy is the result of
implementing the Tactics in this box.
Parallel Why we claim that the strategy is possible at all
Assump.(PA) THROUGH THIS TACTIC – a justification.
Tactic How we will achieve the strategy – actions.
Sufficiency What we should not overlook.

Assump.(SA)

S&T Tree Box (Step)
Justifying that the Tactic
will lead to the Strategy
Necessary Why this box is a necessary condition to achieve the
Assump.(NA) “parent” box and why we will spend managerial
effort and time to deal with this area.
Parallel Why we claim that the strategy is possible
Assump.(PA) at all THROUGH THIS TACTIC – a
justification.

Assump.(SA)
S&T Tree on Consumer Goods, MTS - MTA
4:11 Aligning production to actual Demand
Necessary  Having too much inventory in the warehouse reduces the Company’s ROI, puts pressure
on the sale-force to offer damaging deals and in some cases endangers the Company’s
assumptions cash. Having too little inventory in the warehouse guarantees bad service to clients
(ruining the competitive edge).
 Most MTS companies have much too much inventory of some SKUs while not having
any inventory of others.
The Company holds, in its Plant Warehouse(s) (CDC), relatively small amounts of
Strategy inventories which are appropriate to service the “partnerships.”
 Per SKU, the target level of inventory that ensures high availability is equal to the amount
Parallel expected to be consumed within the replenishment time factored for variability in demand
assumptions and supply.
 The replenishment time to the plant warehouse is equal to the production lead time.
 In conventionally run plants the eagerness to reach full activation of resources populates
the shop floor with too many orders. The resulting traffic jams inflate the production lead
times and mask capacity. In cases where the touch time is a very small fraction (<10%)
of the lead time, vast experience shows* that abolishing the mentality of striving for high
local efficiencies, reduces the lead time (to be less than 50% of the historical lead-times)
and exposes ample excess capacity (~50%).
* Except for environments which are dominated by heavily dependent set-up matrixes.
The Company switches from a mode of operation of producing to stock into the mode of
Tactic producing to availability (produce only to the inventory targets that ensure availability).
Sufficiency Trying to be more accurate than the noise is useless, distracting, and definitely
delays results.
assumption Source: Eli Goldratt’s Webcast on S&T on Consumer Goods, MTA-MTS, 2008
S&T Tree Box (Step)
Justifying the NEED to deal
with this area
Necessary Why this box is a necessary condition to
Assump.(NA) achieve the “parent” box and why we will
spend managerial effort and time to deal
with this area.
Parallel Why we claim that the strategy is possible at all
Assump.(PA) THROUGH THIS TACTIC – a justification.

Assump.(SA)
S&T Tree on Consumer Goods, MTS - MTA
4:11 Aligning production to actual Demand
Necessary  Having too much inventory in the warehouse reduces the Company’s ROI, puts
pressure on the sale-force to offer damaging deals and in some cases endangers
assumptions the Company’s cash. Having too little inventory in the warehouse guarantees bad
service to clients (ruining the competitive edge).
 Most MTS companies have much too much inventory of some SKUs while not
having any inventory of others.
The Company holds, in its Plant Warehouse(s) (CDC), relatively small amounts of
Strategy inventories which are appropriate to service the “partnerships.”
 Per SKU, the target level of inventory that ensures high availability is equal to the amount
Parallel expected to be consumed within the replenishment time factored for variability in demand
assumptions and supply.
 The replenishment time to the plant warehouse is equal to the production lead time.
 In conventionally run plants the eagerness to reach full activation of resources populates
the shop floor with too many orders. The resulting traffic jams inflate the production lead
times and mask capacity. In cases where the touch time is a very small fraction (<10%)
of the lead time, vast experience shows* that abolishing the mentality of striving for high
local efficiencies, reduces the lead time (to be less than 50% of the historical lead-times)
and exposes ample excess capacity (~50%).
* Except for environments which are dominated by heavily dependent set-up matrixes.
The Company switches from a mode of operation of producing to stock into the mode of
Tactic producing to availability (produce only to the inventory targets that ensure availability).
Sufficiency Trying to be more accurate than the noise is useless, distracting, and definitely
delays results.
assumption Source: Eli Goldratt’s Webcast on S&T on Consumer Goods, MTA-MTS, 2008
• For ENSURING that the decision will be

IMPLEMENTED

ENSURING that the decision
will be IMPLEMENTED
If we need to IMPLEMENT a decision, it

means that we are brining some
CHANGE to the system!
What is Change in a system?
It is bringing in a new solution

Making change happen
Whenever we speak about “making change HAPPEN”

this means that the decision about the change (or a NEED for
the change) has been made or is being considered.
This means that we ALREADY know

• What NEW (Change) we will bring (want to bring) to our reality
• What CURRENT in our reality will be stopped or replaced by
the NEW (Change)
• What benefits we will gain as the result
• That the NEW (Change) will NOT bring harm to our system.

Making change happen
Then
thinking/planning how to make change HAPPEN
is about
OVERCOMING OBSTACLES of not having enough
knowledge of:
• how to implement the change technically

• how to bring people on board
On different levels – owners, bosses, peers, subordinates, contractors,
vendors, clients, investors, etc.

Common confusion between
making decision to implement and
getting collaboration of people who are
assigned to implement
The pre-decision stage

The decision is made
to implement the change
Idea Relevant people evaluate change and

raise reservations/concerns/suggestions
The post-decision stage

Decision
PRE- IMPLEMENTATION
IMPLEMENTATION ROLL-OUT FULL EXECUTION
In the post-decision stage there is no room any more to persuade people

to implement. The decision to implement has been made by people who
are authorized by the company to make such decisions.
6 Layers of Resistance to Change
1. Disagreement on the
problem
To address 2. Disagreement on the
DECISION- direction of solution
3. Disagreement that the
MAKERS: solution will bring the
desired benefits
Yes, but…
Layers 1-5 4. Fear that the solution will To address
result in negative
consequences RESOURCES:
5. Obstacles to only
implementation seem to be
impossible to overcome Layers 4-6
6. Say “Yes” and do nothing

For Change Decision-Makers


TOC Thinking Processes

For Change Decision-Makers


• Pivot
• U-Shape • UDEs • Ambitious •Fire-Fighting
• Direction
• C&E • UDE Cloud Target Cloud
• CLR • Consolidated • Injections • PRT • Inner Dilemma/
• Inner Dilemma/ Cloud • DE • Detailed plan Conflict Cloud
Conflict Cloud • Core Cloud • S&T
• CRT • NBR
• FRT

Pre-decision stage –
for the level of
decision-makers only!
The decision is made
to implement the change
Idea Relevant people evaluate change and

raise reservations/concerns/suggestions
MUST BE KNOWN:
What to change
What to change to
How to implement change – technical side

Why is change needed?
The only justification is –
a clear GAP
PLAN ACTUAL
Measurable &
quantified
Our LOW PERFORMANCE
targets MEASUREMENTS

Why is change needed?
The only justification is –
a clear GAP
PLAN ACTUAL
Measurable &
quantified
Our LOW PERFORMANCE
targets MEASUREMENTS
Make to Order:
• Unsatisfactory On-Time Delivery
• Too long Quoted Lead Time
Make to Stock:
• Low Availability
(high level of
shortages)
• Low Inventory Turns (high level
of surpluses)

Why are performance
measurements low?
PLAN ACTUAL
Measurable
Our Quoted Lead Availability Inventory
& quantified OTIF Time too turns
targets too low long too low
too low
PERSISTENT PROBLEMS
• Often machines and/or people are not available
THAT DO NOT ALLOW US TO when needed
ACHIEVE THE DESIRED • Priorities constantly shift
TARGET
• Raw materials/parts are not always available
UDEs when needed
• Too much expediting
UnDesirable Effects
• Too much over time
• Too much rework
• Too many SKUs with too high inventory levels
• Too much dead or obsolete inventory

Why are performance
measurements low?
Quoted Lead Availability Inventory
OTIF Time too turns
too low too low
long too low
Too much Too much

expediting overtime
Raw Often machines

materials/parts and/or people Too much
are not always are not available rework
available when
needed when needed
What is the
common
cause?
Why are performance
measurements low?
OTIF Time too turns
too low too low
long too low
Too much Too much

expediting overtime
Raw Often machines

materials/parts and/or people Too much
are not always are not available rework
available when
needed when needed
THE WAY
WE OPERATE
OUR SYSTEM
The way we operate our
system
Important needs of Actions that we

Our goal/ the system and take to achieve the
Necessary Conditions important needs of
objective to achieve our goal/ the system
objective
D
B
Take expensive
Ensure on-time
corrective actions to
delivery of orders
expedite the flow towards
to customers
the order completion
A
Make money now
and in the future
C D’
Perform according Act according to the
to the cost plan that was set
expectations set or officially updated
by budget

The way we operate
our system

OTIF Time too turns
too low too low
long too low
Too much expediting Too much overtime
Raw materials/parts are Often machines and/or Too much

not always available people are not rework
when needed available when needed
Take expensive
corrective actions to Act according to the
expedite the flow plan that was set
towards or officially updated
the order completion

Full picture for Decision-Makers:
From PROBLEM to SOLUTION
Low High
Performance Performance
WHAT TO CHANGE TO
Measurements Measurements
WHAT TO CHANGE
UDE DE
Future Reality
Current Reality
UDE UDE UDE DE DE DE
UDE UDE DE DE
NBRs
D D’ TOC
THE WAY Injections
B WE C
OPERATE PIVOT TOC direction
OUR SYSTEM!
A TOC of solution

Detailing the implementation to
sizable and auditable steps
Levels of resistance & U-Shape Strategy & Tactic Tree
WHY THERE IS A NEED TO

1. Knowing the problem
IMPLEMENT THIS ELEMENT
OF THE SOLUTION
2. Knowing the direction of WHICH TACTICS WILL LEAD TO
solution
Level of ACHIEVING WHICH STRATEGIES
DECISION
MAKERS 3. Justifying that the solution CONDITIONS, EXISTENT OR TO
will bring the desired BE CREATED, THAT ENSURE
benefits THAT TACTICS WILL ACHIEVE
THEIR STRATEGIES
4. Removing potential HOW TO REMOVE KNOWN

negative consequences RISKS
5. Removing obstacles to DETAILS OF ‘HOW’ TO THE
implementation LOWEST NEEDED LEVEL
One of the biggest concerns:
How to Overcome RESISTANCE
of people who are assigned to
implement the change?
When someone disagrees/resists, it means that
• They see a severe negative outcome for themselves
from doing as told, and they do not know how to
prevent this negative
OR/AND
• They see severe obstacles that they do not know how
to overcome or have no authority to take actions to
overcome the obstacle
Decision Post-decision stage

PRE- IMPLEMENTATION

Post-decision stage
problem
direction of solution
3. Disagreement that the
solution will bring the
desired benefits
Yes, but…
4. Fear that the solution will To address
result in negative
consequences RESOURCES:
5. Obstacles to
implementation seem to be only
impossible to overcome
Layers 4-6
6. Say “Yes” and do nothing

Post-decision stage
Decision
PRE- IMPLEMENTATION
In the post-decision stage it is not about persuading, but

about ENSURING that people DO do what needs to be done.
Understanding ‘HOW’ & Continuous
Logic based the problem Removing Negative Removing Improvement
Management WHAT to Change Outcomes Obstacles How to Grow
Solutions to all known potential negative outcomes and

obstacles are developed in the process of change design and
captured in the Strategy & Tactic Tree

S&T box
• For ENSURING that the decision

will be IMPLEMENTED
6 Layers of Resistance
HOWEVER
• Even when the management works out how to remove

potential negative outcomes and obstacles,
• the unavoidable concern of the resources that must
implement the change will be that the change will bring
disturbance to the person’s routine course of
life/work/activities and will result in additional load.
This is Layer 4 – a perceived negative outcome, and it has
nothing to do with looking at the change from the
system point of view.
BUT because People WILL NOT speak about it
managers interpret is as Layer 6 “Say Yes and do nothing”.

Jelena Fedurko
Local vs Global
THE ORGANIZATION – GLOBAL

Objective
of the
Global
49
Local vs Global

Objective
of the Consists of many Locals
Global
50
Local vs Global –
not one, but TWO
Objective
Objective of of the Consists of many Locals
this Local Global
Objective of
this Local
Objective of
this Local
51
Local vs Global –
not one, but TWO
Objective
Objective of of the Consists of many Locals
this Local Global
Objective of
this Local
Objective of
this Local
52
Local vs Global –
not one, but TWO
Objective
Objective of this of the Consists of many Locals
Local (= its GLOBAL) Global
Objective of this Local
(= its GLOBAL)
Objective of
this Local
(= its GLOBAL)
53
The reality

Consists
Objective of this Local Objective of many
(= its GLOBAL) of the Locals
Global
Objective of
this Local (= its
GLOBAL)
Objective
of this
Local (= its
GLOBAL) No wonder managers
often complain about
RESISTANCE
54
The reality
THE ORGANIZATION – GLOBAL The CONFLICT may happen

Consists ONLY IF the Local:
Objective of this Local Objective of many - Interfere with the
(= its GLOBAL) of the Locals Global
Global
Objective of - Does not contribute to
this Local (= its the Global
GLOBAL) - Does not contribute
ENOUGH to the Global
This is reflected in
Objective BEHAVIOUR
of this
Local (= its
GLOBAL) No wonder managers
often complain about
RESISTANCE
55
My four books
on TOC logical tools
for understanding the problem,
developing the solution and
structuring the implementation
Visit http://tocexpert.com/books/
Write to jelena@tocexpert.com

Jelena Fedurko-Cohen - 39 - TOCPA - Colombia - 12-13 April 2018 - Eng

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www.tocpractice.

39th TOCPA International Conference

The need to carefully use the

Jelena is a Co-Founder and Co-President of TOC

Jelena is the author of four advances books on TOC

Both require that:

The similarity ends there.

Making a decision does not imply development.

After making a decision:

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

Strategy: Management enhance their ability to improve the performance

Tactics: Management employ the TOC Management Tools

Mindset Current Reality Future Reality Transition POOGI

TOC Thinking Processes

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

Strategy: Management enhance their ability to improve the performance

Tactics: Management employ the TOC Management Tools

Mindset Current Reality Future Reality Transition POOGI

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

To make a decision a person

One of the two

The need that

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

DO NOT USE THE CLOUD TO MAKE DECISIONS!

• For JUSTIFYING the decision

• For ENSURING that the decision will be

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

The best TP tool for

Box (Step) of the Strategy

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

Necessary Why this box is a necessary condition to achieve the

Sufficiency What we should not overlook.

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

Sufficiency What we should not overlook.

Sufficiency What we should not overlook.

• For JUSTIFYING the decision

• For ENSURING that the decision will be

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

If we need to IMPLEMENT a decision, it

What is Change in a system?

It is bringing in a new solution

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

Whenever we speak about “making change HAPPEN”

This means that we ALREADY know

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

• how to implement the change technically

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

The pre-decision stage

Idea Relevant people evaluate change and

The post-decision stage

In the post-decision stage there is no room any more to persuade people

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

Strategy: Management enhance their ability to improve the performance

Tactics: Management employ the TOC Management Tools

Mindset Current Reality Future Reality Transition POOGI

TOC Thinking Processes

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA

Strategy: Management enhance their ability to improve the performance

Tactics: Management employ the TOC Management Tools

Mindset Current Reality Future Reality Transition POOGI

www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA