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Welcome to the TOC in Service Industry Portal
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We’re excited to provide free access to 6 of over 63 (and growing) Theory of Constraints (TOC) service industry presentations (excluding another several service presentations listed under healthcare and government) ranging from discussions of the use of TOC in service industries to applications in a professional services, to the implementation in a supply chain for book publishing and distribution, the implementation of TOC in a home mortgage company during a severe recession, the implementation in a financial services company, and finally the integration of SAP and TOC in the implementation of IT projects in large organizations.

These applications were selected to build your TOC service industry knowledge base from simple to complex. The same concepts are applied to simple and complex organizations (See also the healthcare and government portals).

We have listed below the references and abstracts for the free presentations on this portal. In addition, we have provided a comprehensive annotated bibliography of ALL service industry presentations and webinar videos currently in our archives. And, at the end of this annotated bibliography is a TOC book list on service industry.

The service sector is growing rapidly in most countries. The organizations described in these presentations have made significant improvement by using the TOC philosophy to continuously improve. TOC is the best methodology for today BUT there will always be a need for continuous improvement. These tools are part of the journey to excellent service industry organizations.

Our hope is that you’ll learn from these 6 presentations and are moved to join TOCICO to gain access to the rest of our archives.

TOCICO membership includes:

  • FREE on-line access to all past TOCICO conference videos including the 57 additional service industry videos – there are several hundred videos starting with the second conference in 2004. These were previously sold for $149 per conference (totaling $1,788), but now, viewing ALL of them are INCLUDED with your membership.
  • Discounts on TOCICO products and conference attendance.
  • FREE access to the over 50 recorded webinars by some of your favorite TOC authors.
  • FREE registration to all new webinars – and just wait until you hear what’s in the works!
  • FREE pdf of the TOCICO Dictionary – 135 pages of pure content.
  • All 6 Strategy & Tactics trees by Eliyahu M. Goldratt
  • Over 20 Theory of Constraints articles with more on the way.
  • And, access to networking with the TOC community around the world on the TOCICO website. Build your page, start discussions, or contact another member – the new TOCICO website is web 2.0 ready and ready for you to engage.




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 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.






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.



Ronen, B. and Pass, S. (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.





Barnard, A. (2010). Case study: Finding and testing a solution to shortages and surpluses within book publishing. TOCICO International Conference: 8th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.

This presentation shares 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.






Cox, K. (2012). TOC in government - Challenges and opportunities. 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 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 methodologies) 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.




The Complete Services Industry Annotated Bibliography



The Complete TOC Book List



Our hope is that you will learn from these six presentations and are moved to join TOCICO to gain access to the rest of our archives.

TOCICO membership includes:

  • FREE on-line access to all past TOCICO conference videos including the 57 additional service industry videos – there are several hundred videos starting with the second conference in 2004. These were previously sold for $149 per conference (totaling $1,788), but now, viewing ALL of them are INCLUDED with your membership.
  • Discounts on TOCICO products and conference attendance.
  • FREE access to the over 50 recorded webinars by some of your favorite TOC authors.
  • FREE registration to all new webinars – and just wait until you hear what’s in the works!
  • FREE pdf of the TOCICO Dictionary – 135 pages of pure content.
  • All 6 Strategy & Tactics trees by Eliyahu M. Goldratt
  • Over 20 Theory of Constraints articles with more on the way.
  • And, access to networking with the TOC community around the world on the TOCICO website. Build your page, start discussions, or contact another member – the new TOCICO website is web 2.0 ready and ready for you to engage.

You may also want to check out our other Portals: