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39th TOCPA International Conference


12-13 April, 2018, Colombia

TOC as support for managing


a more complex and global
environment

Oded Cohen
tocExpert
Israel, Estonia

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


Oded Cohen
Oded has over 40 years of experience in developing, teaching
and implementing TOC methodology, solutions and
implementation processes working directly with Dr. Goldratt
all over the world. Among the countries to which Oded brings
his expertise are the USA, Canada, Japan, India, China, the
UK, Poland, Russia, Ukraine, Colombia, Chile, Peru, Turkey
and many others.
Oded has authored multiple TOC articles and contributed to
numerous TOC books.
Oded in the is the author of Ever Improve – A Guide to
Managing Production the TOC Way, published in June 2010,
translated to Chinese in 2015. Oded co-authored the book
Deming & Goldratt: The Theory of Constraints and the
System of Profound Knowledge – The Decalogue.
Together with Jelena Fedurko Oded has co-authored the
book Theory of Constraints Fundamentals.
oded.cohen.gs@gmail.com
Oded is International Director of tocExpert Ltd, TOC Strategic www.tocexpert.com
Solutions Ltd and Founder and Co-President of TOCPA. www.toc-strategicsolutions.com
www.tocpractice.com
www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA
Why TOC?

GDP goes up

World
(1960)
1.366
Trillion
Source: https://data.worldbank.org/region/world
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Why TOC?

Colombia’s GDP goes up

Colombia
(2014)
378
Billion

Colombia
(1960)
4.041
Billion Population:
1960 - 16.480M 2016 – 48.653M

Source: https://data.worldbank.org/country/colombia
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Colombia - Export

Source: https://atlas.media.mit.edu/en/profile/country/col/

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Supporting Management

TOC as support for managing a more


complex and global environment
Management is put in charge of commercial enterprises
(better paid) in order to deliver financial results.

Yet, it is not easy to deliver the expected results!

Complex - means it is not simple as it used to be,

Global Environment - means that management has to


fights in one or two fronts: Export and Import!

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


Complexity and Global
Competition
• GDP goes up
• People have more money to spend
• A great deal of money goes into improving the
standard of living
• More and more products become affordable to more
and more people
• Market demands more and more new and innovative
products for cheep prices
• The world is subject to global competition

Hence, the demands from Management is continuously


increasing.
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WHY TOC?

Not every company can afford heavy investments to


secure their competitiveness
Hence, Management is the key!
Expected (Budgeted) LEVEL

GAP
CURRENT LEVEL
PERFORMANCE

TIME

THE PAST TODAY

Management must take corrective actions.


Most changes are in systems
and in managerial decision making.
www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA
Dealing with Complexity
TOC - Subject Map
Based on GSP 1999
Strategy & Tactic MTO: DBR & S-DBR
Tree Production MTA, MTIA, PTA, PTO
Strategy &
Operation

Problem Solving Throughput


Management Skills The Core: Finance Accounting
Managing Constraint
(TP Based) People &
5 Focusing Steps Measurement
4 Concepts of Flow
3 Basic Assumptions
Focus & Flow
Sales Project
U-Shape CCPM – Critical
Sales Process Logic Management
Chain Project
Management Management

Distribution
Marketing
DTA –
Market Offers
TOC Replenishment
(TP Based)
Supply Chain & Retail
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TOCPA –
Sharing Experience

The TOC solutions are working!!!


www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA
The strength of the
economy is Production

• Production needs Production Management


• Production is a FLOW
• Hence – the world cannot do without the skills
and methods for Managing FLOW
• TOC has a unique way to manage the FLOW
• 40 years of TOC implementations in
productions provide an outstanding and
relevant reference base

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


Managing FLOW means:
• Planning
 TOC planning provides: financial benefits, is
realistic and accommodates for “Murphy”
• Execution Control
 TOC provides: Focus, Priority, Real Time Status and
prompts Recovery Actions when commitments are
threatened
• Focused Continuous Improvement
 TOC provides the areas for improvements through
analyzing the TOC Buffers
TOC for managing production is FLOW & FOCUS
And hence is a very good choice
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So…
If it is so good – why are we so few?

Because it demands more than one person:


• The owner(s)
• The CEO/MD
• The Production Manager
• The PPC – Production Planning and Control
personnel
Mostly - it is a top-down approach
Even though sometimes it has moved bottom-up
when the “champion” is promoted
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There is a future in production
and production management

There is a potential value for each one of the key


players:
• The owner(s) – more business
• The CEO/MD – stability and growth
• The Production Manager – smooth flow to
provide contribution to the company
• The PPC – Production Planning and Control
personnel – professional growth

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Produce for availability

Retailers have to hold in stock tens and sometimes


hundreds of thousands of SKUs with very few fast
movers and vast majority of slow movers:
From
Humberto
Baptista’s
presentation
11th TOCPA
Conference
http://tocpractice.com/conference
s/2014/02/15/11th-tocpa-
conference-14-15-march-2014-
brazil/

Where from are these SKUs supplied?


A great deal of the consumers goods are imported
www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA
Replacing Import
And increasing Export
Two major reasons for importing:
Price
Engineering Features

Interestingly – service level hardly plays a dominant role


for the buyers

Is the reality changing?


 Is import as cheap as it used to be?
 Is it always available?

May be there is an opportunity for local


enterprises?
www.tocpractice.com 39th International Conference of the TOC Practitioners Alliance - TOCPA
There is too much inventory in
the supply chain

From John Darlington’s


presentation

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The Opportunity

Who can profit from Managing Production the


TOC Way:
• Owners and CEOs of existing
manufacturing companies that experience
slow down in sales and profits
• Entrepreneurs who are looking to invest in
some companies that have a potential to
provide a nice return on their investment

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


Strategy
For dealing with
Complexity and Global environment
Strategy & Tactic
Tree Production &
Strategy Operations

Managing Finance
People The Core: &
Constraint Measurements
5 Focusing Steps
4 Concepts of Flow
3 Basic Assumptions
Focus & Flow
U-Shape
Project
Sales Management
Logic

Distribution
Marketing

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The Strategy & Tactic Tree

A comprehensive tool to cover The S&T Tree provides a


the whole system in the framework for the
process of transition from the structured recording of the
current reality to the future steps needed to be taken in
reality. transition and gives their
logical justification.
Strategy
Tactic • Five different entities in
each S&T box:
 Necessary
S S Assumptions
T T  Strategy
 Parallel Assumptions
 Tactic
S S S S S S S  Sufficiency Assumption
T T Т Т Т Т Т
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Summary

TOC as support for managing a more


complex and global environment
1. Build your operational excellence
2. Capitalize in your existing market, while seeking to
replace imports
3. Learn and develop what is needed to expand to new
markets (local and export) and new products
4. All can be achieved by a small team:
• Business leader(s),
• Internal TOC practitioners
• External TOC consultants and software providers

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


TOCPA –
Sharing Experience

www.tocpractice.com

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

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