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Service Industry Annotated Bibliography By James F. Cox III

Adams, G. (2008). Delta Air Lines: Meeting challenges in engine maintenance. TOCICO International Conference: 6th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.

                In 2005, Delta Air Lines filed for bankruptcy. Prior to its merger with North West Airlines, Delta was a $17 billion sales revenue airline with approximately 50,000 employees.   After merger in 2008 Delta was a $35 billion top line revenue airline with the same number of maintenance, repair, and overhaul (MRO) employees.  As part of the bankruptcy plan, engine maintenance was required to reduce cost and inventory while, at the same time, increase productivity.   In 2002 the MRO had revenues of $77 million and in 2008 the revenues were $470.   The requirements for survival aligned very well with Theory of Constraints- -more specifically, critical chain and drum-buffer-rope.  The summary of changes includes: create plans with buffers in critical chain and in drum buffer rope; control the work-in-process inventories by controlling release; manage using the buffers, and use exception management.  TOC concepts implemented in 2006 were to focus on constraints and improve overall engine maintenance performance using continuous improvement as the growth strategy.  Six sigma and lean had previously been implemented.  TOC concepts have given a clear understanding of where to apply six sigma and lean methods to achieve true bottom-line results.  

 

Anderson, D. J. (2004). TOC software engineering solution with lean & six sigma solution. TOCICO International Conference: 2nd Annual Worldwide Gathering of TOC Professionals, Miami, FL, Goldratt Marketing Group.

                This presentation seeks to explain the TOC solution of critical chain project management (CCPM)  for use in modern software engineering. Key learning points include: 1. How to use drum buffer rope (DBR) with software engineering; 2. How to use throughput accounting (TA) with software engineering; 3. Understanding useful variation in software engineering; 4. Provide a TOC enabled maturity model for software organizations; 5. Identifying what’s fundamentally wrong with the SEI CMMI and SW-CMM; 6. The integration points of a TOC software solution with six sigma, Deming, and Toyota Production System (TPS) principles and lean thinking.  Benefits to attendees: 1. Benefits of applying DBR, CCPM and TA to technology development; 2. Contrast of the TOC approach with traditional approaches; 2. Benefits of using lean cumulative flow diagrams for the DBR solution.

 

Anderson, D. J. and D. Dumitriu (2005). Worst to best in 9 months at Microsoft (paper and presentation). TOCICO International Conference: 3rd Annual Worldwide Gathering of TOC Professionals, Barcelona, Spain, Goldratt Marketing Group.

                This is a case study about implementing common sense changes where they were needed. It’s a story not about the brilliance of the theory of constraints (TOC) but rather TOC playing a role as permission giver, reinforcing the beliefs of a manager and encouraging him to do the right thing. It’s also a story about simplicity – making just a few simple changes, collecting less data, spending less time on overhead and bureaucracy and more on productive tasks. The XIT Sustained Engineering team is part of one of Microsoft’s eight information technology (IT) groups. The department maintains over 80 applications for internal use worldwide by Microsoft employees. The team completes small change requests (often bug fixes) involving less than 120 hours of development work. The team was considered the worst performing in its business unit at the start of the 2005 fiscal year (July 2004). The backlog of work was exceeding capacity 5 times and it was growing every month. The lead time for a change request was typically 5 months. The due date performance was almost zero. Customers were unhappy. A new program manager stepped in to coordinate the efforts of XIT Sustained Engineering. He wanted to make some changes but was unclear whether they were the right changes and how effective they might be. By performing an analysis using the 5 focusing steps of TOC, David Anderson helped him to understand how his proposals fit with a drum-buffer-rope and throughput accounting implementation. With no new resources, no changes to how the team performed software engineering tasks like design, coding and testing, the changes to how the work was queued and estimated resulted in a 155% productivity gain in 9 months. The lead time was reduced to a maximum of 5 weeks – typically 14 days. Due date performance improved to greater than 90%. The backlog was worked off and the department is no longer seen as an organizational constraint. Customers are delighted. This study shows that TOC’s fundamental 5 focusing steps [Goldratt 1984] and the production flow solution, drum-buffer-rope [Goldratt 1984], have significant value in information technology, and software development, without a need to resort to more elaborate TOC solutions such as critical chain project scheduling or the thinking processes.

 

Aoki, N. (2005). Using the TP for medical error reduction. TOCICO International Conference: 3rd Annual Worldwide Gathering of TOC Professionals, Barcelona, Spain, Goldratt Marketing Group.

                This presentation discusses the scope of medical errors and compares the number of deaths from medical errors (98,000) to traffic deaths (43,000), deaths from cancer (42,500), and deaths from AIDS (16,500).  Patient case studies are described illustrating the causes of medical errors.  The thinking processes (TP) are used to analyze this medical errors case; to develop a solution to prevent the errors; and to establish consensus among medical professionals.  Several undesirable effects (UDEs) were surfaced related to the medical errors; the three-cloud approach was used to build a generic core conflict cloud. This cloud was comprised of objective (A) To provide high quality (e.g. timely and safely) care for each patient; (B) Respect autonomy of each professional to maximize their activities; (D) Work independently and have the responsible physician manage patients; (C) Reduce risk of medical errors and check the status during the process; and (D’) Work as a team based on standardized processes.  The current reality tree was built connecting all UDEs.  The assumptions of the core conflict cloud were surfaced and injections identified.  The future reality tree was constructed to achieve the desirable effects based on the injections.

 

Aoki, N. (2006). Critical chain for inpatient management of patients with diabetes mellitis. TOCICO International Conference: 4th Annual Worldwide Gathering of TOC Professionals, Miami, FL, Goldratt Marketing Group.

                This presentation describes the application of the theory of constraints (TOC) critical chain project management (CCPM) application to design a resource allocation and scheduling system for healthcare professionals.  Diabetes is used as a case example as a project.  CCPM provides a good solution to create a concrete schedule for each professional which maximizes resource utilization and reduces extra waste.  Quality indicators were examined. A prototype information system is being implemented based on CCPM concepts.

 

Baptista, H. (2007). The finance of TOC distribution. TOCICO International Conference: 5th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NV, Goldratt Marketing Group.

                This presentation discusses three questions: If we implement the TOC distribution solution on a retailer, what will be the impact on its profit?; Can I use current retailer/distributor numbers in throughput accounting and make decisions without errors?; Which factors impact the financial results more in a distribution environment?. The discussion centers around the financial statements and throughput, inventory and operation expenses, a reexamination of T, I, OE; the truth about T; where is my I; OE is really OE; the financial impact of TOC distribution and modeling the impact. Financial accounting statements are described as they relate to T, I, and OE. A model illustrating the impact of shortages over time is provided.

 

Baptista, H. (2010). Retail TOC - Myths and truths. TOCICO International Conference: 8th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.

                The application of the TOC solution for retailers is covered in good depth by the VV retailers S&T, but is this enough? Are all retailers the same regarding the implementation of the TOC solution? In this presentation concepts are exposed and results from a large retailer implementation are discussed to share the logic governing this environment and what it is required to successfully implement the TOC solution for retailers.

 

Baptista, H. (2011). Retail TOC - Get your hands dirty on the implementation. TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals, Palisades, NY, Goldratt Marketing Group.

                After examining the myths and truths about TOC in retail in 2010 we are back to the implementation side of TOC for retail. In this presentation all challenges presented in 2010 and some other are solved and the implementation is detailed in a form of a new version of the retail S&T tree.

 

Barnard, A. (2010). Reducing shortages and surpluses in retail with theory of constraints. TOCICO International Conference: 8th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.

                This presentation will share the correct process to develop a simple yet powerful way to identify and quantify the extent, consequences and causes of surpluses and shortages within the book publishing supply chain and how TOC was used to develop and test a viable solution that is generic enough to be applied to any other consumer goods supply chain.

 

Bonatsos, S. (2013). Milk run replenishment in Cyprus. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.

                The case study presented refers to the design, application and implementation of the TOC replenishment solution in the biggest Dairy in Cyprus. The two biggest dairies in Cyprus merged their operations under a new operational model in year 2008. The merge affected all aspects of the two companies -  manufacturing, supply chain/logistics, sales, IT, HR and administration. This case study analyses how the TOC replenishment solution was designed and implemented to support the creation of the new supply chain that would be able to service daily more than 2500 customers through a fleet of 150 vehicles and through 4 depots supported by a central warehouse. The whole project was realized in less than a year and it was a huge undertaking for the company, which created the new future without missing market presence not even for a single day. There are lessons learned and there is room for further improvement.

 

Camp, H. F. (2006). Making TOC distribution work: The story of a small company and a mega brand. TOCICO International Conference: 4th Annual Worldwide Gathering of TOC Professionals, Miami, Fl, Goldratt Marketing Group.

                This presentation describes the implementation, the problems and the results of two companies, a small company and a large company.   The overview of each company is provided including sales, volume, margin, operating expense and profit by channel.  Mega brand is seasonal with two seasons with no replenishment as inventory is purchased 4 months in advance.  Its pilot consisted of 9 stores (inventory turns 2.2 and unavailability 40), IT difficulties and delays, training, sales, obstacles, etc.  The next steps for implementing the replenishment model across the company are outlined.  Shippers Supply Co. (a smaller company) is then presented with the completed and remaining steps to implementing the replenishment model.

 

Chaudhari, C. (2013). Application of TOC in  the ‘live animal farming’ industry. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.

                Five focusing steps, and several TOC solutions / processes are widely used in various industries for improving the performance of a system. However TOC solutions are not implemented / developed widely in the industry that deals with ‘live animal farming’. These environments are much more complex than any other environments as it deals with ‘live animals’. Some of unique characteristics of this environment makes it challenging to manage i.e. inventory of live animals can’t be held for too long as it consumes food (truly variable cost (TVC) goes up), mortalities reduces potential throughput, sales price of products vary on a daily basis like other commodity, etc. When the authors could not develop a good solution using the ‘five focusing steps’ implementation in ‘live chicken farms’, they applied the ‘thinking processes’ (TP) to develop TOC-based solutions. Implementation of the solutions in a chicken farm environment delivered good results in very short time. The process was further converted into a standard guideline/process for analyzing other ‘live animals farming’ environments. Processes were tested to develop solutions for ‘cow farming’, ‘calf growing’ and ‘pig farming’ environments. With the help of some relevant companies, solutions for ‘cow farming’ and ‘calf growing’ environments were practically tested.

 

Cox III, J. F. and T. M. Robinson (2012). The use of TOC in a medical appointment scheduling system for family practice. TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, IL, Theory of Constraints International Certification Organization.

                The use of TOC in healthcare is an emerging field. This presentation describes the use of the five-focusing steps (5FS), throughput accounting (TA), drum-buffer-rope (DBR), buffer management (BM), the engines of harmony, and the thinking processes (TP) in a family practice organization. Many medical providers use a patient appointment scheduling system based on fixed appointment times to schedule patient flow; the use of TOC in this type of scheduling system is a new and significant area of study. The TOC tools (the TP) and BM were used to improve scheduling, execution, and patient flow by eliminating the major causes of interruptions, thus providing a smoother flow of patients to and from the provider. The attendee benefits from understanding: 1. The application of each TOC tool to the medical practice through various examples in an actual practice. 2. The use of BM to proactively improve appointment scheduling and execution systems. 3. The major causes of poor organizational performance across a medical practice.

 

Cox, K. (2011). More efficient government: Implementing TOC in Utah's Department of Workforce Services. TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals, Palisades, NY, Goldratt Marketing Group.

                Utah’s Department of Workforce Services (DWS) began to implement TOC the central component of its operational excellence program to reduce costs while improving service levels. This presentation describes the objectives, process, steps and results to-date achieved by DWS. In addition the presentation will share how the process in DWS is being used as the model for driving improvement in other agencies of state government.

 

Cox, K. (2012). TOC in government - Challenges and opportunity. TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, Il, Theory of Constraints International Certification Organization.

                How do you successfully apply TOC principles and tools in a public sector environment? A government organization has many internal and external realities that set it apart from its private sector counterparts. While many TOC principles are effective in government, the overall body of knowledge does not adequately address many conceptual differences. The TOC community has an opportunity like never before to influence the public sector—as decreasing budgets have put government on notice that it must find ways to provide services at lower costs. By applying TOC principles, Kristen Cox has substantially improved the performance of a large government agency.   Her presentation focuses on adaptations of basic TOC tools such as strategy and tactics (S&T) trees, as well as lessons learned to highlight applications in the public sector. The goal of this presentation is to encourage the TOC community to broaden the field of knowledge into government operations. Key learning points include: 1. An understanding of the current opportunity to influence government efforts to increased performance; 2. Insight into the challenges of applying TOC principles in a government setting; 3. Through lessons learned, adaptations of TOC tools that have created significant bottom-line results.

 

de Kiewiet, M. (2012). Solid gains throughout an acute hospital. TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, IL, Theory of Constraints International Certification Organization.

                This presentation provided a blended, holistic approach to operational excellence in an acute hospital - A case study. The hospital services a population of about 260,000 residents and 5 million tourists. The presentation goal and key learning points relate to sharing practical experience of what can be gained within a year by using the implementation of a blended approach to operational excellence of an acute hospital. The key learnings are: a two-pronged approach works, involve everyone, resistance to change has a lot to do with the mermaid syndrome (taking comfort in not changing), learning to see, pathway integration, the speed of implementation is important, project management and sustained results are vital.

 

de Laat, L. (2009). Using TOC to deliver IT projects on time, all the time. First European TOCICO Regional Conference, Amsterdam, The Netherlands, Goldratt Marketing Group.

                Caesar is a medium-sized information technology (IT) company based in The Netherlands. From 1995 when Caesar was founded until 2001 Caesar grew steadily. Following an operational excellence strategy Caesar was able to deliver high quality IT specialists for very competitive prices. This strategy however proved to be recession-prone. The recession of 2001 – 2002 hit the company hard. Looking for a way to build a stronger competitive edge Caesar embarked on a journey with Eli Goldratt in 2004. The ambitious target was to build an IT company that would deliver all its projects on time (with the right scope and for a fixed fee). At that moment (and many years before and after it) project performance of IT companies was poor: typically 60-70% of IT projects fail to deliver the right scope on time and within budget. In 2004 Caesar did not outperform the market average. In the first six months of 2005 we implemented a new way of working. The core improvement implemented in this period was critical chain project management (CCPM). Although this proved a necessary component it was not sufficient to reach the goal. A major cause for project failure – at least in IT projects – is uncontrolled scope creep. Applying critical chain allows for some scope creep to be absorbed but we found that an extra injection was necessary: a scope management process that would minimize scope changes to only the most crucial. We developed PDSM – problem driven scope management – using the TOC thinking processes (TP) at the initiation phase of each project to define the basis for the project scope. With a clear problem definition we found that we could effectively manage the project scope during the execution of the project. So much so that we can guarantee customers that we will solve their problem on time and for a fixed fee. The guarantee includes a penalty for late delivery. This unique approach was named Time Value. In the first months of operation this combination of CC and PDSM gave us very promising results: our DDP in 2005 was 80%. As we took on more projects and more complex projects we found a number of other process improvements (mainly from the lean / agile) were necessary to maintain a high DDP. Using the TP in our own organization to understand the problems and develop and implement solutions, we have been able to constantly improve our performance. In the last three years this has resulted in 95%+ due date performance on our IT projects.

 

Dinham, A. and R. Stratton (2011). Why assessment units are not a waste of time: A TOC perspective. TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals, Palisades, NY, Goldratt Marketing Group.

                This presentation describes three topics.  The first topic is how assessment units can significantly improve patient flow when configured and managed in line with TOC principles. The second topic is how assessment units buffer the inpatient / emergency care pathway, introduce a divergent point from which patients can be discharged after a reduced stay, and therefore off-load scarcer, slow-moving in-patient beds. The third topic is how this approach has been practically delivered together with an assessment of the current limitations and the relationship to alternative theory.

 

Ferguson, L. A. and A. van Gelder (Sept. 8th, 2010). Strategy and tactics for hospitals. TOCICO Webinar Series. TOCICO, Theory of Constraints International Certification Organization.

                We present the generic Strategy and Tactics tree for hospitals for how to implement TOC to improve healthcare quality, provide a more rewarding environment and improve financial performance. Then, we share experiences of implementing TOC in both public and private hospitals. 

 

Fox, K. (2013). Using TOC to improve the effectiveness and efficiency of state government. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.

                The global economic troubles of the past few years have created significant challenges for governments around the world, and highlighted the critical importance of running government operations more effectively and efficiently. While TOC offers tremendous potential for government to make the great strides that are needed, it faces significant challenges in displacing the more common and less-effective methods, including: slashing services / programs, re-organization, technology investments, and lean / six sigma, among others. This presentation will discuss the unique challenges government’s face (vs. for-profit organizations) both generally, and in applying TOC, and explore some novel techniques for launching and sustaining TOC in government organizations. We will share examples and illustrations from several US states who have achieved success with TOC and who are now expanding their efforts state-wide.

 

Funcke-Bartz, M. (2011). Managing change in urban water utilities in developing countries. TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals, Palisades, NY, Goldratt Marketing Group.

                The presentation shows the need for a paradigm shift in dealing with basic public services in developing countries. TOC can help to strengthen management capacities, to prioritize actions and investments and should be applied in measuring performance by development banks and governmental bodies.

 

Ghoshal, S. and J. Pun (2010). How marketing changed operations in a restaurant. TOCICO International Conference: 8th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.

                This presentation illustrates how the organization was transformed from a traditionally run restaurant to one of the most efficient restaurants with big improvements in quality and customer service. This restaurant chain is possibly the only one in the whole of Mexico to give a mafia offer to its customers both on time and quality.

 

Goldratt, R. (2013). TOC for retail - the next generation. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.

                The standard TOC application for retail focuses on demand pull replenishment. How to set inventory targets, how to dynamically manage these inventory targets, how to utilize the power of aggregation and how to determine the frequency of replenishing stock?   While these are important aspects of the solution, the elaborated experience in implementing TOC in various retail companies made it clear that the main focus should not be merely on what to replenish, but rather heavy emphasis must be given to what NOT to replenish. In his 90 minute presentation, Rami Goldratt will present highlights of the considerable developments in applying the concepts of flow to the retail environment. Topics include how to manage vast assortments; how to synchronize new product introduction with liquidation of slow moving items; how to dynamically manage the range; how to manage short product life cycles, and more. The workshop will be a preview for the new S&T tree for retail that will be published in the near future.

 

Halaby, D. (2009). Dealing with the nursing shortage. 1st Annual North American Regional TOCICO Conference, Tacoma, WA, Goldratt Marketing Group.

                In 2001, 10 area hospitals, four institutions of higher education plus 10 related NGO’s, agreed to work collaboratively to outline the process for training in nursing and allied health occupations in the Rio Grande Valley (RGV) and develop a strategic plan to increase the throughput of locally trained professionals. The effort led to the creation of the RGV Allied Health Training Alliance and the creation of the centralized clinical scheduling system.

 

Humpert, D. (2013). V.I.P. Mortgage, Inc.: A case study. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.

                This case study covers a three-year period of consulting work with this middle-sized independent mortgage company from the introduction of TOC as a management framework in March 2010 to the present.  The environment of a mortgage company cannot be classified as traditional operations (suitable for a DBR solution) nor as a project environment (suitable for a CCPM solution).  V.I.P. Mortgage worked with Aligned Consulting Services to develop a TOC solution for the mortgage industry. V.I.P. Mortgage used the classic TOC thinking processes (TP) as the whole system intervention.  The company successfully adapted its mortgage automation system to support a buffer-managed, flow-focused operations system.  The company developed its performance management system to encourage behaviors that facilitate flow.  The TOC-based solution has profoundly influenced every sales, operational, financial, and human resources system in the company. While applying TOC, V.I.P. Mortgage grew from 50 to over 260 employees during a period of turmoil and upheaval in the home mortgage industry, achieving its long-term goal in 2012 of exceeding $1 billion in loan volume.  In this context, this case demonstrates that TOC is more than a process of ongoing improvement; it can be framed as an organization theory to grow successful companies.

 

Inozu, B. (2010). Injecting TOC with lean / six sigma into process improvement in healthcare. TOCICO International Conference: 8th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.

                A new best-of-the-breed approach to combine TOC concepts and tools with lean and six sigma in healthcare is shared.  This approach is used when jump-starting a new continuous process improvement program or reenergizing an existing one. Strategies and tactics to overcome resistance are also presented when introducing TOC to lean and/or six sigma cultures. Examples are provided from interventional radiology, advanced cancer treatments, and laboratory turnaround times in emergency departments.

 

Inozu, B. (2011). Implementing constraints management with lean / six sigma: Lessons learned at Anadolu Medical Center. TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals, Palisades, NY, Goldratt Marketing Group.

                The first twelve months of deploying a continuous performance improvement program, called Super, at Anadolu Medical Center in Turkey is discussed. The 201-bed hospital has begun implementing lean and six sigma with constraints management in an integrated manner. Examples are provided from improvement project selection that incorporates the thinking processes (TP), addressing policy constraints in the outpatient appointment process, the magnetic resonance imaging (MRI) repair and maintenance preparing process, the  the operating room (OR) process, and the inpatient medication order process, as well as results of a pilot study on dynamic replenishment for medical supplies.

 

Keith, M. and M. Eby (2013). Using TOC-TP to convert operational risk assessment into competitive advantage for financial services firms. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.

                This presentation will demonstrate the use of an operational risk assessment and the change matrix conflict cloud to identify the focal point (root cause) of a financial services firm’s risk profile, identifying and challenging an underlying erroneous assumption.  The process followed will be presented, and a case study examined.  Participants will learn how to use an operational risk assessment and the change matrix conflict cloud to identify the focal point (root cause) of the firm’s risk profile.  Participants will examine and explore the reasons that the problems / risks exist, determine the convergence to a core problem, and the effect of 'raising the goal.'  Also, participants will learn how to align the resolution of the core conflict with the firm’s value proposition to the market and how to run small batch / fast cycle times to test the value assumptions.

 

Knight, A. (2009). Theory and practice. First European TOCICO Regional Conference, Amsterdam, The Netherlands, Goldratt Marketing Group.

                Alex Knight describes his first meeting with Dr. Eli Goldratt at a senior-level seminar.  He then describes the experiences he has had in different environments (healthcare, legal, universities).  TOC (Eli) is using the question, "Why?" very effectively.  Managing complex systems, such as the healthcare industry, involves managing health and social environment systems. What we did to improve the system: We took what the theory (related to production) said and did it!  The chain of activities in the health and social care system is explained.  The patients that stay the longest in any part of the system are not the sickest, but the patients who had the most delays in the process.  The healthcare evaporating cloud is presented and discussed.  The cloud is (A) Run an effective healthcare system; (B) Medics/managers are required to give the best (appropriate) medical treatment to those they are now treating; (D) Medics/ managers should act only upon medical considerations; (C) Medics/managers are required to treat all patients in a more timely manner; (D’) Medics/managers should act more and more within budget considerations.  Medical technology is improving rapidly and as it improves the costs of buying and operating the new equipment is increasing significantly.  The costs of running a hospital are defined and discussed. The truly variable cost is about 20%, while 60-70% of hospital costs are related to medical staffing.  If you try to save money, then you reduce Throughput.  Achieving a breakthrough in healthcare consists of five elements: achieving consensus, operational breakthroughs, finance and measures, market breakthroughs and sustainability.

 

Knight, A. (2011). Fifteen year progress report on achieving breakthroughs in health and social care using the theory of constraints. TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals, Palisades, NY, Goldratt Marketing Group.

                This presentation reviews progress to date in the application of the TOC to achieving a breakthrough in performance in health and social care systems. These developments address how to improve emergency care, discharge management, out-patient management, elective surgery management and how to turn improvements in the operations into a decisive competitive edge. The presentation assesses progress to date, current limitations, together with future opportunities and challenges. Alex Knight also reflects on lessons learned in applying TOC to a new industry.

 

Knight, A. (2012). TOC in healthcare: Broadening the shoulders of our giant. TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, IL, Theory of Constraints International Certification Organization.

                Healthcare is accelerating towards a crisis of affordability. The likely outcome is deterioration in both access and quality of care. It is time to make explicit how and why a TOC-focused approach is the only option. This presentation establishes: 1.  The conceptual similarities and differences between what was so dramatically improved by TOC production and project management approaches and the impact of these approaches on the healthcare environment. 2. The broader conditions under which TOC has been successful in healthcare, its applications and the boundaries of its applicability. 3. New knowledge to accelerate the impact of TOC in healthcare around the world is the core of the presentation.

 

Knight, A. (2013). The development of TOC applications for the service sector. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.

                This presentation highlights some of the core developments over the last thirty years and in particular focuses on areas where modification of the standard applications was not sufficient and a different approach was required (one that remains firmly rooted in the underpinning theory). In each instance Alex Knight demonstrates that the breakthrough has come purely from the derivation of the underlying theory and has never required the addition or integration with other theories. In particular, Alex highlights the following points: 1. There are many examples where the assumptions upon which the generic TOC applications for manufacturing were built are not valid in the service environment. As an example, the concept of choking the release to help identify the constraint is a core first step in all of the operations, project and distribution / supply chain environments and yet this is often simply not a valid option in most services. The implications of this are far reaching and require a rethink in the development and adaptation of the TOC applications for the service sector. 2. The distinction between an operations and project environment are also not always valid in a service environment. Alex exposes a number of examples where ‘both and neither’ of the conditions can exist. As a result, this basis of distinction is no longer really very helpful. Alternative criteria for establishing the position and size of buffers are required.  3. The whole concept of developing a schedule for resources to follow is often redundant.  Demand emerges alongside frequent and major changes in both mix and volumes in extremely short timescales.  Creating sufficient protective capacity at very short notice becomes a key issue. Establishing the processes for this require a different perspective to the traditional applications. Some of the lessons learned in this environment may have implications for changing the way schedules are developed for other environments. 4. It is inferred from standard TOC processes and the transformational strategy and tactics (S&T) trees that initiating the analysis and eradication of underlying causes of delay should be embarked upon once the system is being guided by buffer management.  In many of these service environments, it is more appropriate to initiate this analysis and supporting actions before any attempt to introduce buffer management. The process of on-going improvement (POOGI) is more of a driving force than DBR (the TOC production/operations application) or CCPM (the TOC project management application).  5. In many service environments, the un-desirable effect (UDE) of ‘too early’ is just as valid as ‘too late’. As a result, there has been a need to invent a new buffer system and associated algorithms.  6. Exposing excess capacity can often happen in a matter of hours, days or weeks. This means that the synchronization of sales efforts to increase sales is very important.  With staffing as a major part of the operating expense (OE) of many service industries, it is very tempting to cut OE the moment excess capacity has been revealed. In some industries, the very first steps have to be to plan and start the processes to increase sales even before the decisive competitive edge (DCE) has been achieved.  7. Many service industries have high levels of front-line professional staff who must be bought in to the approach.  The number of people who can threaten the implementation's success if they do not believe in it is typically a magnitude of order higher. Many are very skeptical about anything to do with management.  This has major implications for the approach and intensity of the buy-in that is required.  8. The customer is often an active participant in the delivery of the service and cannot be treated like a piece of work-in-progress. Also, exploitation of the constraint to maximize throughput per constraint minute may be inappropriate.  We cannot reduce the lead time for someone to die to free up capacity.   9. Changing the mind-set of a TOC professional to work in the service industry has often taken significantly longer than starting with new recruits who have no knowledge of TOC.

 

Knight, A., et al. (2004). Making TOC the main way in health and social care. TOCICO International Conference: 2nd Annual Worldwide Gathering of TOC Professionals, Miami, FL, Goldratt Marketing Group.

                This paper summarizes the lessons learned so far in opening up the health industry to TOC and provides the details of our latest work in reducing the queues for elective operations. Key learning points include: 1. Dealing with which current policies to challenge and what to leave to the future. 2. Better understanding of the critical distinction between planning and execution. 3. Reducing uncertainty by limiting the horizon of the planning.  Benefits to attendees: 1. Exposure to a challenging project in the middle:  being able to participate in dilemmas that are active now. 2. Getting ideas that could work in other service organization. 3. Widening one’s perception on the usage of TOC in non-profit organizations.

 

Nagarkatte, U. P. and D. Movasseghi (2007). TOC initiative at Medgar Evers College to reduce student attrition: A progress report. TOCICO International Conference: 5th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NV, Goldratt Marketing Group.

                This presentation provides the background of Medgar Evers College and of TOC being used there; the TOC thinking processes (TP) roadmap, unique features of the college scene; acceptance of departmental guidelines and TOC across the college; next steps and a summary.  Medgar Evers College is part of City University of New York (CUNY) (one of two state universities of NY); the college is one of 20 units of CUNY and has three schools (Liberal Arts and Education; Business; Science Health and Technology); offers two and four year programs. For over 30 years the college had tried to address its attrition problem.  In 1998 the faculty senate identified 24 academic and non-academic issues causing attrition and suggested one action for each issue.  TOC was then applied to the 24 issues.  In 2001 a federal grant was awarded to study attrition.  Three faculty members attended a Jonah course and studied the problems.  This presentation is about implementing TOC to improve retention.  The full TP were applied to analyze and solve the problem.

 

Ojeda, D., et al. (2013). Building a decisive competitive edge in the microfinance segment in Mexico. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.

                Mas Kapital is a Microfinance company located in Mexico. They have grown fast for the last 6 years but they were worried about the imminent threat of losing control of the processes and they decided to adopt the TOC philosophy in order to stabilize the company. In 2010 they met Dr. Goldratt and they decided to make a full TOC implementation grounded on their Viable Vision project. Since the beginning TOC tools were utilized in order to identify the undesirable effects. From this point we identified the major constraint as the loan submission analysis process, subordinated all the company efforts in order to only process good qualified potential customers and filter them in a better way to reduce credit risk and reduce bad debt, at the same time we divided the sales force responsibilities and tasks in order to focus the collections activity and align the promotion process to the real needs of the company, once we had the operations control TOC thinking processes were used to identify a significant need of the market and design Mas Kapital decisive competitive edge.

 

Reid, R. and T. Shoemaker (2009). Challenges and opportunities in applying the TOC thinking processes (TP) in public sector organizations. 1st Annual North American Regional TOCICO Conference, Tacoma, WA, Goldratt Marketing Group.

                The thinking processes (TP) provide a framework for understanding managerial dilemmas, identifying strategic direction, and implementing organizational improvements. Learn about unique public sector ‘work-arounds’, TP pitfalls in a service-oriented subsystem, and ‘out-of-the-box’ thinking by public sector managers. Insights gained in application of the TP in a US city water department, African solid waste management, and municipal services in the Philippines are presented.

 

Ricketts, J. (2009). Reaching the goal: How managers improve a services business using Goldratt’s theory of constraints. 1st Annual North American Regional TOCICO Conference, Tacoma, WA, Goldratt Marketing Group.

                This presentation explains how TOC has been adapted for use in professional, scientific, and technical services (PSTS). Such services are highly customized and delivered on demand, so they are dramatically different from the manufacturing and distribution sectors where TOC began. Consequently, every TOC application requires some adaptation. Nevertheless, it shows that TOC can be applied across the full spectrum of services industries, which comprise the majority of today’s economy.

 

Ricketts, J. (2010). Reaching the goal. TOCICO International Conference: 8th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.

                Services account for over two-thirds of economic activity today. Reaching the Goal adapts TOC applications for use in professional, scientific, and technical services (PSTS). This presentation explains why services have unique requirements and how drum-buffer-rope, replenishment, critical chain, and throughput accounting have been adapted to work in services enterprises providing highly customized services.

 

Robinson, T. (2009). Implementation of CCPM at Nationale Nederlanden - Group Life. First European TOCICO Regional Conference, Amsterdam, The Netherlands, Goldratt Marketing Group.

                The theory of constraints critical chain project management (CCPM) as a method to improve and to accelerate project delivery can't be seen in isolation. This method only will succeed when senior management endorses the approach and when the individual employee understands the behavioral consequences. At senior management level a sound governance process is a precondition for a successful outcome of implementing CCPM. After all, priority setting is key and that must start at the top level of the organization. The people who work day-to-day in a CCPM environment might have to change their attitude and their usual practices. New values and goals must be introduced and this change process needs to be guided. This presentation addresses two topics that are preconditions for implementing CCPM: governance and the individual change process. The story is based on a CCPM implementation in a multi-project information technology (IT) environment.

 

Roff-Marsh, J. (2013). Solving the pofessional services dilemma:  How to productize services and build a practice that will scale. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.

                Why it’s NOT TRUE that this model is out-of-reach for sole practitioners.  Our experiences in the USA: 1. Launched in the USA in midst of financial crisis (with no house list) 2. Failed to win clients with traditional approaches (and hundreds of thousands of Aussie dollars in promotional expenditure) 3. Justin initially built promotional machine single handedly – used initial wins to add virtual assistant 4. Three years later, the US operations surpassed Australia in sales 12 steps to replicate what Ballistix has done. Here’s a step-by-step plan to survive the transition unscathed: 1. Identify the ongoing services you could deliver to clients – and would be happy to deliver if you weren’t (personally) providing those services 2. Design a value proposition that ensures that clients have no net monthly outlay (ideally from month one) 3. Convert existing clients to new service offering 4. Employ a smart, young graduate and teach him how to deliver 5. Centralize the delivery of services wherever possible until your consultant become a facilitator 6. Use the existing TOC applications as your religion. (Don’t reinvent the wheel unless it’s absolutely necessary.)  7. Get an executive assistant 8. Use pay-per-click advertising to give away sample content and build a list 9. Use auto-responder sequences and webinars to generate sales opportunities 10. Sell solution-design workshops – make clients design their own engagements 11. Use change-management initiatives as a hook to secure ongoing relationships 12. Re-calibrate.

Roff-Marsh, J. (March 31st, 2011). How to use social media to generate sales opportunities for professional services. TOCICO Webinar Series. TOCICO, Theory of Constraints International Certification Organization.

                When Justin Roff-Marsh emigrated to the US to launch a subsidary of his consulting firm, he under-estimated how difficult it would be to generate sales opportunities in this mature and hyper-competitive market. He quickly discovered that traditional marketing approaches -- even those that work well for his firm's clients -- simply failed to work (these include, public relations, house events, trade shows and targetted direct mail campaigns). Fortunately, as a result of a year of frantic experimentation, Justin arrived at a lead-generation formula that is both low-cost and remarkably effective. In this webinar he will chart his journey of discovery and detail the formula.  Although this formula incorporates social media (Justin has transitioned from a skeptic to an reserved evangelist) it does not require the kind of all-in commitment that other evangelists are advocating. Justin will describe an approach that involves just the bare essentials (no Facebooking, Tweeting or blogging for the sake of blogging!)  As well as describing a do-it-yourself approach -- and laying bare his own costs and statistics -- Justin will be sure to allocate enough time for a question-and-answer session.

 

Ronen, B. (2007). Upgrading the TOC BOK: Focused methodologies for the financial industry. TOCICO International Conference: 5th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NV, Goldratt Marketing Group.

                This presentation reviews the problems of traditional strategy from a TOC perspective then offers solutions using the thinking processes and applications. The role of the CEO to provide vision and the Bungee Effect are described. Forbes Magazine author thought: In the majority of company strategy cases strategic planning is good but also in the majority of companies execution is bad (Bungee Effect).  Recognize that the author is viewing strategy from a traditional viewpoint as what is taught in business schools, executive programs and by consultants (not TOC strategy).Goldratt's It’s Not Luck example is provided for discussion. The traditional strategy and tactics (S&T) for a successful company are examined using the thinking processes (TP). At the lower levels we see that tactics clash within and across functions thus creating chronic conflicts among policies, measures, and behaviors within the organization. Chronic conflicts for making money, having secure and satisfying environment for employees, and satisfying the market are discussed. An example with results is provided of implementing a Viable Vision (VV) project with a mid-sized Chinese kitchen products producer.

 

Ronen, B. and S. Pass (2008). Upgrading the TOC BOK: Focused methodologies for the telco industry. TOCICO International Conference: 6th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.

                This presentation describes the use of theory of constraints in the telecommunications (telco) industry. First, the telco industry is described as a service industry with no finished goods, measures are customer service driven, information technology (IT) based and capital intensive, high operating expenses and investments, etc.  Value-focused management was developed to apply TOC to this industry.  The five step process is: 1. Determine the goal; 2. Define measures of performance; 3. Identify the significant value drivers; 4. Decide how to exploit and improve the value drivers; and 5. Execute and control.  The focus is not to make more throughput but to make more value.  The broader goal is to increase the shareholders’ value, defined as discounted cash flow (DCF).  An example is given.  A value driver is any performance variable that can significantly increase shareholders’ value.  Managerial value drivers for the telco industry are measures of performance, IT strategic gating, 25/25 rule; IT throughput; sales throughput; complexity reduction; cost accounting, pricing and decision making; and customer service/call centers.  Examples of each driver are given.  A permanent bottleneck is defined as a bottleneck that cannot be moved.  It has 300-400% more demand than capacity.

 

Ronen, B. and S. Pass (2011). Throughput enhancement in operating rooms:  Doing more with existing resources. TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals, Palisades, NY, Goldratt Marketing Group.

                The presentation describes the implementation of TOC and focused management principles to the management of operating rooms in hospitals and clinics in order to achieve enhanced Throughput and quality along with reduced lead times.  The presentation objectives are:  1. To present case studies that demonstrate the use of simple and practical tools to significantly increase throughput, reduce lead time and enhance quality in operating rooms, 2. To present the implementation process of TOC and focused management techniques, philosophy and tools in operating rooms. Material covered:  a) The implementation of TOC focusing steps and focused management tools for increasing throughput, enhancing quality, and reducing lead time; b) The implementation of the complete kit concept in operating rooms; c) Application of strategic concepts and tools to improve operating rooms' value; d) To present cases in which the methodology was applied resulting in double digit throughput improvement, while enhancing clinical quality.

 

Ronen, B., et al. (2013). Introducing the Superzouf method for service organizations. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.

                Many service processes suffer from long overall lead times which result in reduced throughput, high work in process (WIP) and low customer satisfaction. We found that in most cases these processes have individual service level agreement (SLA) targets for each step of the process. It looks as if giving each department the responsibility for meeting its own SLA target is a good idea. But in reality the duration of steps in each department were never shorter than the required SLA and in most cases even longer though the actual touch labor duration is usually very short. We introduced the notion of 'Superzouf' in several service processes by setting only one global SLA for the whole process and aggressively reducing the amount of WIP in each department. Within several months the overall lead times of these processes were trimmed by more than 80% with subsequent improvement in customer satisfaction. A structured method for reaching this goal is described.

 

Ronen, B., et al. (2012). Justice in time: Applying TOC to law courts systems. TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, Il, Theory of Constraints International Certification Organization.

                The presentation topic is the implementation of TOC and focused management principles to the management of law courts, has achieved substantial lead time, throughput and quality improvements. Our presentation goal and key learning points are to present the generic managerial problems of the adjudication system; to present and validate the use of TOC and focused management tools for the adjudication system; to present case studies that demonstrate the use of simple and practical tools that significantly improve the performance of a law court system.

 

Shoemaker, T. and R. Reid (2010). Quantifying throughput in public sector organizations. TOCICO International Conference: 8th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.

                We present an approach to measuring throughput in ‘not-for-profit’ organizations seeking to improve their goal of citizen/ customers satisfaction. It employs widely-used survey tools to identify service performance gaps. The unambiguous throughput metric produced quantifies customer satisfaction (analogous to money in ‘for-profit’ companies) allowing focused improvement decision making. Participants learn to create customer-satisfaction throughput metrics for service organizations through hands-on application of this win-win approach; thereby helping to expand the TOC Body of Knowledge.

 

Sims, C. and A. Barnard (2013). SAP and TOC - A match made in Heaven? TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.

                It's been well over 10 years since the book, Necessary but not Sufficient (NBNS) was published and yet the rate of success in IT projects – including, unfortunately SAP implementations, has not dramatically improved.  SAP’s own benchmarking and research from other leading ICT research organizations shows that still around 70% of all ICT projects are not deemed a 'great' success. This is despite the fact that the power and coverage of the technology and implementation know-how has grown dramatically.  Could Theory of Constraints help to unlock the inherent value potential of SAP? This paper aims to answer this question, starting with the complexities, trade-offs and uncertainties that make implementing an ERP system such as SAP so challenging. It then provides an overview of how a new NBNS/TOC based 'ValueERP' process, originally developed by Dr. Alan Barnard at Goldratt Research Labs, was proven effective to unlock more value faster from SAP implementations at for example African Explosives, ABB, Ditch Witch, Daiwa House and BHP Billiton.  In 2012, on the initiative of Chris Sims who heads up the SAP Business Transformation Services (BTS) unit for MENA region, SAP MENA formed a research partnership with Goldratt Research Labs to further research and improve this ValueERP process to go beyond just using TOC to implement SAP and/or SAP to implement TOC with SAP MENA clients – one of the fastest growing SAP markets in the world.  Chris and Alan will share their experiences and new insights from this research partnership, specifically how they are using NBNS and Strategy & Tactic (S&T) trees to identify and address the 5 main causes of value being lost within any IT implementation – not just SAP. They will also share lessons learned in trying to implement TOC in the SAP services business in the MENA market unit (Middle East and North African) and provide a peak at their future joint research focus on understanding and unlocking the 'real power of a technology such as SAP'.

 

Smits, P. (2009). Using critical chain project management to drive innovation in a general hospital. First European TOCICO Regional Conference, Amsterdam, The Netherlands, Goldratt Marketing Group.

                This presentation is about managing a 600-bed general hospital in The Netherlands on a day-to-day basis which is enough of a challenge as is. On top, in early 2008, the Maasstad Ziekenhuis hospital (www.maasstadziekenhuis.nl), turned out to have no less than 180 active projects! Active may be a bit of an overstatement, since some projects were well planned and managed; however, quite a few were unclear and often struggling or even dormant. In fact, we were facing all the well-known undesirable effects of project management: lead times of projects were long (often > 1 year); due date performance was poor (if a clear due date was defined at all); and task and project priorities were unclear.  Having viewed Eli Goldratt’s webcast on critical chain project management (CCPM), Maasstad Ziekenhuis – in cooperation with TOC Resultants (www.toc-resultants.com) decided to implement project management basics and CCPM on top of that.  Today, the hospital board is actively involved in selecting, planning and monitoring the execution of supra-departmental projects with the following results: the number of concurrent projects was reduced by 40%; average project lead time was reduced from > 1 year to < 8 months; and > 90 % of projects are finished on time, within scope and budget.  Currently, our focus is on securing the CCPM knowledge and processes in our organization and rolling CCPM out to intra-departmental projects. This initiative should be finished by the end of 2009.

 

van Aart, M. A. (2009). Dealing with change in hospitals quickly and efficiently by means of horizontal leadership and TOC. First European TOCICO Regional Conference, Amsterdam, The Netherlands, Goldratt Marketing Group.

                Hospitals in The Netherlands and elsewhere in western society are faced with the question of how the human compassionate aspect of care can be combined with efficiency.  The environment includes the aging population, the rising demand for care, a looming staff shortage, the autonomy of the private specialist and the introduction of hospitals in the marketplace. In terms of healthcare, the answer to this problem lies in new organizational principles which are in line with ‘the process concept of organization’. This process concept sees organizations not so much as vertical structures with top-down and bottom-up forces, but rather as horizontal processes of value creation at different levels: client process, work process and management process. This change affects the nature of leadership in hospitals. While previously leadership was mostly embedded in the vertical power structure and dependent on position, it is now increasingly having a crossroad function, whereby the interests of many stakeholders have to be met. Today's leadership is moving towards a dialogic, dynamic organizational process in which a great deal of change is affected. How does this horizontal leadership work, and how can it be used in such a way that processes of change and renewal lead to meaningful results? And how can leadership qualities be developed that turn horizontal leadership into a fruitful process of human and organizational development?  In the period 2006 – 2009, the Maasstad Ziekenhuis hosptital in Rotterdam has tested these horizontal principles by means of the ’Methodology van de Evidential’ (Bekman) ’Theory of Constraints (TOC).’ This presentation described the outcomes of an action research project which formed part of that process - undertaken for an MSc dissertation on TOC Healthcare Management (Nottingham Trent University, UK). The project presented the research on the applications of these principles in the areas of operations (discharge, A&E, elective and outpatients), project management, finance and measurements, distribution and supply chain, marketing, sales and rapid response. The main focus of the project, which proved successful very quickly, was on the role of leadership and organizational development.

 

Wright, J. (2009). Sustaining healthcare improvement with TOC. 1st Annual North American Regional TOCICO Conference, Tacoma, WA, Goldratt Marketing Group.

                Healthcare around the world is facing increasing capacity challenges and turning to the industrial world for help. TOC is gaining traction in the global healthcare market. What needs to be done to prepare the people who make up the majority of the ‘process units’ for the changes TOC can bring? How can our industrial applications sustain a process of ongoing improvement (POOGI) in a sector that is so important to all of us?