How to Make a Substantial and Sustainable Growth in the Shrinking Market. Treasure Mapping in TOC Way.
|Chieko Nakayama - Goldratt Consulting Japan. |
Why was there a need for change?
In recent years, in contrast to the growing e-commerce industry, catalogue-based mail order industry has been hanging low globally. Indeed, some catalogue-based mail order companies have started to shift their business model toward e-commerce.
However, the majority of our customers are retired elderly people who do not have high IT literacy, so our business was stagnant for a long time, in spite of our effort.
What to change?
Our goal was to find one standard weekly schedule per store that performs better than current one, measured through Dynamic Buffer We need to change the pre-existing thinking which has been ingrained for so long in the organization: "we need to accept the shrinking in our existing business, so we have to cut into new markets in order to grow in the shrinking industry.”
What to change to?
There are still some treasures in an existing business.
The desirable outcome is that our long-time royal customers are satisfied with our products and services and purchase more. In addition, we acquire new customers with our improved operation.
How to cause the change?
First, we drew the operation flow of our existing business and discussed the parts where the cash flow is blocked. This is identifying the constraint. As a result, we identified several blocked parts. By drawing the cash flow and the blocked parts, we came to an agreement that there are still some valuable treasures in the existing business. The mere "operation flow chart” has become a "treasure map”. (It is really effective if you put a stack of money picture on the constraints on the operation flow chart.)
With what we had found, we created S&T Tree and implemented TOC to the constraints. We reduced more than 70% of stockout times, and increased sales by more than 30% with DBM. Also, we increased the number of purchases by 11% with TA. We obtained the actual results of implementations. For example, the product introduction is three times faster with CCPM.
How do you measure, refocus, sustain and grow the change?
Create an S&T Tree by using a Treasure Map. With the S&T Tree, we accelerate the implementations by experimenting over and over in the cycle of "Build”, "Capitalize” and "Sustain”.
Three learning objectives
- How to grow in the shrinking market.
- How to reach consensus with a treasure map by identifying the constraints in operational flow chart.
Chieko Nakayama -Goldratt Consulting Japan, Born in 1971Ex-Division Chief at NissenCo.,Ltd.Structural Reforms. Nissen is one of the mail-order firms which are the biggest in Japan.
I take office as the section manager of sales promotion department, have the results that increased an excellent customer by 40% in only two years.
And, after I was in charge of mobile commerce, sales via smartphone site topped 10 billion yen in 2012. It was achieved the fastest in the competitors.
After knowing the TOC in 2013, I implemented the structural reform using by TOC. I led the company to the "holistic management" after I indicated the vicious circle caused by partial cost down efforts.
During the execution of the structural reforms, I realized that TOC is to grow the people dramatically.Now I work as a member of Goldratt consulting Japan to spread TOC.