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|TOCICO Supply Chain Annotated Bibliography By James F. Cox III|
Listed below is an annotated bibliography of the presentations on the use of TOC in supply chains made at the annual TOCICO International Conference (2003-2013) and TOCICO webinars (2010-2013).
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.
Bolton, R. (2013). 'Mine to market' - Throughput focused mining. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.
Theory of Constraints (TOC) is a management philosophy developed and articulated by Dr Eli Goldratt and many others within the TOCICO community. In the logistics area, it has evolved from solving management problems at an operational level to a set of proven logistical solutions. The core idea with TOC is that every real system such as a profit-making enterprise must have at least one constraint. It assumes that the goal for a profit-making organization is to make money now and in the future. This relationship of a profit-making goal and one or a few constraints helps organizations determine where to focus their management attention to improve operations and hence business flow. The mining and resource processing environments are complex and variable. Operational changes and improvements can take a number of different forms. There are multiple resource types and numbers that perform specific operational process tasks. Understanding and mapping these resources relationships can be a difficult task. 'It is like swimming is a pool of ping pong balls. Which one can do you grab first?' This is the challenge faced by all resource operational leaders. But the one rule they all obey is the: law of the weakest link. At any point in time, a chain is only as strong as its weakest link. The mining and process industries within the resources sector are examples of complex systems where the above law can be applied. This presentation explores the 'Mine to Market' change interventions in a major mineral sands company based in Western Australia. This presentation describes a major throughput increase and an increase in Asset Utilization at the Iluka Resources (ASX:ILU) South West operation. It explores the phases from TOC introduction to TOC holistic approach, to operation due diligence review. It focuses on what worked, and what did not. Key management elements such as the meeting structure and operational site wide logistics are considered. Other mining and process projects and other TOC case studies within Australia are also referenced.
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.
Camp, H. F. (July 6th, 2011). The TOC distribution solution: How to move your company / client. TOCICO Webinar Series. TOCICO, Theory of Constraints International Certification Organization.
I created this webinar as a way to move the world to adopt TOC. My assumptions are that the initial driver must be commercial and it must be easy for everyone involved. Once the TOC distribution solution, which we call elucidate, is broadly implemented, companies will understand that they cannot further lower inventories without immediately risking sales. This spells the end of recessions, due to eliminating 'the whipsaw effect' – passing ever greater reductions in orders up a supply chain. Without recessions, confidence and investment remain strong, accelerated by TOC. The new effect is like detonating a chain reaction Prosperity Bomb.
Cecere, L. (2013). What happened to the promise of supply chain planning? TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.
Why? • OBJECTIVE: To understand the current state, pain points, goals and issues facing supply chain executives. To be conducted twice a year to track changes. • HYPOTHESIS: There is a gap between importance and performance of supply chain applications. Companies that are more mature in their thinking have a greater gap. What? • Survey topics included: • Supply chain organization definition • Supply chain excellence • IT operations & trends • Supply chain pain points and focal points When and How? • Online interviews were conducted between March 9 – April 9, 2012 • Respondents were recruited via emails from Lora Cecere as well as Plan4Demand Who? • 61 supply chain executives, primarily Vice Presidents, Senior Directors and Directors • Among executives at 44 companies across 12+ industry groups (primarily Consumer Packaged Goods, Specialty Chemical and Food & Beverage).
Cohen, O. (2013). Lessons learned in implementing MTA / DTA (Encore). TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.
The TOC solution for managing a supply chain contains MTA (Make to Availability) for the manufacturer and DTA (Distribute to Availability) for the downstream chain bringing the goods from the manufacturer all the way to the end user/ consumer. Both MTA and DTA solutions are conceptually simple, practical and technically straight forward. Yet, the change in the flow and in managing the flow is challenging. The logic of moving from MTO/MTS to MTA is that there is potential to grow the manufacturing company by offering availability to the downstream chain. The same logic is relevant for the rest of the supply chain. This presentation is based on manufacturers, some that have their own distribution system while others operate through independent distributors. Operating MTO in an environment that demands availability has created difficulties (limitations) to the system. These difficulties stem from the reality that in order to provide availability in a response time that is shorter than the delivery time of the manufacturer - the supply chain is forced to operate on forecasts. When the manufacturers are strong – they can force the downstream links to operate according to the forecast and to give them concrete orders for them to produce as if they all live in an MTO environment. Operating systems based on forecasts cause the major UDEs of shortages and surpluses of SKUs that are expected to be available to be purchased from stock. Therefore, the downstream links suffer from these UDEs. However, the above UDEs cause difficulties also to the manufacturers.
du Preez, H. (2006). Dynamic buffer management. TOCICO International Conference: 4th Annual Worldwide Gathering of TOC Professionals, Miami, Fl, Goldratt Marketing Group.
This facilitated session is directed by Henning de Preez. Henning introduced the basic concepts of dynamic buffer management (DBM) with others contributing. Henning discussed an easy life and India’s invasion of Africa. His background is in mining and in Africa you need to move from training to implementation immediately. Several questions were posed related to DBM: For what purpose do we need DBM? How does DBM work (solutions as described in the Distribution Insights)? What are the conditions under which the generic DBM solutions will work (and will not work)? What is the conflict(s) for those conditions where DBM will not work? What is the direction of the solution for the conflict? Eli Schragenheim joined the presentation to explain the details related to DBM and capacity available.
Farid, H. (2005). The future of ERP - A TP analysis at Oracle. TOCICO International Conference: 3rd Annual Worldwide Gathering of TOC Professionals, Barcelona, Spain, Goldratt Marketing Group.
This presentation describes a survey of what customers are saying about ERP, the core problem of ERP and the direction of solution. The supply chain strategy group brainstormed their ERP customers’ undesirable effects (UDEs) then surveyed a representative sample of their customers to determine their validity. The 19 UDEs included: software was way too expensive to maintain; we hardly realize the value in the system, before we have to start upgrading it again; we don’t get good enough business insight out of all the money spent on our ERP solution; our ERP system cannot keep up with the pace of change in our business and industry; we cannot ad3quately leverage our investment and instead have to buy additional software modules: etc. The evaporating cloud (EC) core conflict of the customer is A Successful IT strategy B The IT must support flexible and emerging business models the action D Adopt more industry-specific complexity but on the other requirement the software vendor must find ways to C Reduce cost of ownership which requires actions to D’ Remove complexity. The cloud and the associated assumptions plus a current reality tree are provided. The injection breaking the generic cloud is to build an architecture that will permit more mix-and-match without the requirement for full upgrades.
Ferguson, L. A. (2005). TOCICO supply chain logistics exam review workshop. TOCICO International Conference: 3rd Annual Worldwide Gathering of TOC Professionals, Barcelona, Spain, Goldratt Marketing Group.
This presentation provides an overview of the content of the theory of constraints supply chain logistics management examination.
Ferguson, L. A. (Jan. 30th, 2013). Introduction to distribution. TOCICO Webinar Series. TOCICO, Theory of Constraints International Certification Organization.
Dr. Lisa Anne Ferguson will be facilitating a series of 'Zero to Sixty' webinars for those wanting to learn the fundamentals or basics of TOC distribution. These webinars would also be a good review of those topics for those familiar with TOC.
Hoeftsmit, P. (2009). Introduction presentation for the supply chain track with the relevant S&T tree. First European TOCICO Regional Conference, Amsterdam, The Netherlands, Goldratt Marketing Group.
In a 2 min. video it is shown how much bigger the problems still are in the supply chain environment. What is the constraint? How do most companies go about it and what should we do according to the S&T for a supply chain. Highlighted subjects are: aggregation; order lead time and its effects; the conflict between retailer and supplier; the ROI calculation as the opportunity to get the full attention of the retailer; the astonishing potential results; and the effects of the financial crisis. These subjects are all related to how we should read the supply chain strategy and tactics (S&T) tree. Furthermore introductions are made to the other presenters and their results and experiences.
Hurtado, A., et al. (2012). Standing on Eli Goldratt's shoulders: Management attention to build the ever-flourishing state. TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, Il, Theory of Constraints International Certification Organization.
Viable Vision (VV) is the process to achieve the ever-flourishing state. Companies that decide to move forward into this challenge need to decipher how to close the GAP between TOC theory and practice. It means the management team needs to: 1) Understand the TOC required knowledge for the different paradigm shifts and 2) Decipher how to use it on their specific supply chain characteristics and circumstances. Grupo Berlin decided to implement their VV two years ago. The presentation shares the interactions of this management team to build, capitalize and sustain their decisive competitive edge based on the inventory turns offer
Kirloskar, N. (2008). Viable Vision - A reality. TOCICO International Conference: 6th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.
As an auto parts company, Fleetguard is a market leader in the filtration systems, with 5 plants spread across India. The presentation is focused on the implementation and achievements in the distributor to retailer leg of its supply chain and the pull created in the market and institutional segment growth solution.
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.
Kothekar, K. (2011). Successfully implementing the strategy and tactic tree in a fashion retail chain and a company supplying to fashion retail chain. TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals, Palisades, NY, Goldratt Marketing Group.
LRRL is one of the largest Indian owned retail chains in the footwear (only) segment. It started with the implementation of the retail strategy and tactic (S&T) tree in April 2010 to achieve a Viable Vision (VV) of increasing sales 3 times in 4 years while achieving a profitability of 10% profit before tax (PBT) from the current situation of negative profit.
Krishna, A. and K. Kothekar (2007). Decisive competitive edge in auto after market. TOCICO International Conference: 5th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NV, Goldratt Marketing Group.
This presentation describes the implementation of theory of constraints across the Fleetguard supply chain in India. Fleetguard makes filters, filtration systems and coolants. Fleetguard is backward integrated to media (paper), sheet metal, tools and dies, rubber components, coolant blending and adhesives. The supply chain consists of 5 plants, institutional customers, original equipment (OE) customers, OE first fit customers, OE spares, after market of a 14 distribution warehouse network, 90 distributors and 5,000 retailers. Fleetguard had a high market share in all markets therefore a Viable Vision was not possible (according to Goldratt). Fleetguard had limited growth potential in the OEM channel but unlimited growth in aftermarket particularly if the range of products and geographic market (reach) were not restricted. The aftermarket of small fleet owners was serviced by the 90 distributors. The current and future reality trees of the aftermarket are provided. The primary measure of the distributor is return on investment (in inventory from a company). Step 2.1 Inventory turns competitive edge is presented. Level 4 of tactics of build (produce to availability), capitalize (proposal design inventory turns offer, value selling, and sales funnel management) and sustain (capacity elevation) are discussed. The components of plant operations, the results and negatives to build to availability; the components of distribution, the impact, the obstacles, the paradigm shifts and sales role to capitalize in sales, the unrefusable offer to distributors, and the results are discussed. New product development was critical to capitalizing on the aftermarket.
Machado, W. (2011). Applying TOC distribution on a high demand variability environment: A case study in one of the largest cosmetic franchise chain in the world. TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals, Palisades, NY, Goldratt Marketing Group.
This roadmap to success is based on work at a Brazilian company, from a case study at the world’s largest cosmetics franchise chain. We tested the impact of an event-managed process on TOC distribution and measured the performance of the company´s stock policies. Based on TVD/IVD (throughput value days and inventory value days), we concluded that this combination can create an environment with more efficient replenishment with higher stock turns, less stock-outs and increased sales.
Masuda, K., et al. (2013). Holistic management in a pharmaceutical company. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.
It takes about 10-15 years to launch the new drug medicines after pharmaceutical companies discover the promising compounds. This means that pharmaceutical companies tend to accept the dilemma of not releasing new products immediately even though there are promising active agents at hand. Pharmaceutical companies also tend to have a large stock of inventory because the shortage of products supporting good health is not permitted. Senju Pharmaceutical Co., Ltd. (based in Japan) is faced with the same problems as other drug companies. Since 2012, we have started a holistic management with TOC to pursue 'harmony' and to build a 'well-muscled' operation. Through the company-wide TOC implementation, timelines of R&D projects were shortened aggressively, and delays of the schedule were recovered in close coordination and cooperation. The stocks of raw materials and products were kept at a low level by making win-win relationships with partners. Work itself became a learning environment and is helping our staff grow rapidly. The staff within and outside the company has begun to perform in harmony with each other. Although our challenge has just begun, we would like to share small successes which would lead to a large change in the pharmaceutical industry by this holistic approach.
Meshar, A. and E. Krommendijk (2007). Another method to run MTS & MTO company (concept and case study). TOCICO International Conference: 5th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NV, Goldratt Marketing Group.
This presentation provides: a different look at the buffers of TOC replenishment; the concept of only time buffers usages in production of make to stock (MTS) and make to order (MTO); the results of simulation comparisons; the case study of TKF and a summarization of lessons learned. The derivation of maximum buffer level for the generic rule (The target level is defined as the maximum’ forecasted consumption within the average replenishment time, factored for the unreliability in replenishment time.) is provided. To determine this target level three questions have to be answered: 1. How long will it take us to replace what was just sold? 2. How much will the demand be during that time? 3. What is the variability of the demand and supply that we should take into account? These questions are answered through examples, a case study and a simulation.
Mohanty, S. (2012). Managing new product development projects in auto components industry. TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, Il, Theory of Constraints International Certification Organization.
The presentation discusses the core problem and direction of the solution for the new product development of tier 1 / tier 2 suppliers in automotive industries whose primary job is to develop and supply new components for the original equipment manufacturers (OEMs). The goal of the presentation is to derive the core problem of the tier 1 / tier 2 suppliers for their new product development team and establish a direction of solution, which can help them to improve their delivery performance of new products at a faster rate. The new product development management of the tier 1 / tier 2 suppliers is a challenging environment where critical chain project management (CCPM) rules cannot be directly implemented on the projects. The definition of what is a project holds key to the solution. The logical entity of the projects on which the role of work in process (WIP), full kitting, planning and execution can be implemented is defined as independent work packets. Once the work packets are defined and CCPM rules are applied on these project entities, the output of the new product development (NPD) team increases substantially, leading to a drastic reduction in lead times and timely delivery of the overall projects. The presentation establishes that the current problems faced by the NPD team of tier 1 and tier 2 suppliers are related to the ways OEMs are currently managing their development projects. The interaction between the single multi-project environment of the OEMs and the multi-project environment of the suppliers, as well as ineffective concurrent engineering model followed by the OEMs play havoc on the suppliers are discussed. They are forced to live in a situation with a huge number of unfinished projects, rampant changes of priorities, unexpected iterations and heavy reworks in their system. The direction of the solution is to break each of the NPD projects into logically independent work packets (a portion of the whole project which can be started and finished without any interruptions from the OEMs) and to implement the CCPM rules, e.g., low WIP, full-kit, planning and execution on those work packets to increase its output. A case study is also presented where the output increased by 8 times within 3 years of implementation.
Mohanty, S. and P. Kulraj (2013). Managing outliers in distribution and retail using TOC upgrade workshop. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.
One objective of the session is for people to learn about the additional solution components required along with the basic TOC distribution in environments, which present the challenge of large variety of SKUs or a large number of small customers. Another objective is to explore how effective implementations are possible without diluting the essence of the TOC way of thinking or complicating the simple yet powerful solution of replenishment, aggregation and high inventory. The discussion points are related to the standard Consumer Goods Strategy and Tactic Tree and explore the missing entities in the standard tree as well as providing a more detailed explanation of some of the parallel assumptions of the steps in the standard tree.
Naik, R. and R. Shailesh (2013). Another Viable Vision from India. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.
Godrej Security Solutions, a manufacturing organization cuts through chronic problems faced by the entire industry and sets seemingly unrealistic benchmarks for the rest of the field. This is no small player or new player, it is a company that has been in this business for over 50 years and is an established market leader. Implementing TOC in its entire supply chain (raw materials, manufacturing and sales), in two years, the company has more than doubled its output from the same capacity, nearly tripled its profits and doubled its profitability. It is well on its way to achieving a Viable Vision by making its sales equal to profit in five years.
Radkevicius, D. and D. Turlo (2012). The path to improve the flow of goods in retail based on life implementations within 5 FMCG chains (more than 100 shops and 10000 SKUs each). TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, Il, Theory of Constraints International Certification Organization.
TheTOC Insights says that the system’s constraint in distribution is a client who comes to buy. To exploit the constraint you need to have the right inventory. To have the right inventory you need to establish the procedure of getting the data of daily sales and replenishing in accordance sales. We want to share our experiences of what is the meaning of to get the data of daily sales. The importance of this area is untouched. Without correct data any results-oriented consulting is a waste of time.
Raz, R. and J. Murali (2012). Titan Watch case study. TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, Il, Theory of Constraints International Certification Organization.
Titan Watches is a division of Titan Industries, the fifth largest integrated watch manufacturer in the world, and part of the Indian TATA group. In Dec 2010 Titan Jewelry embarked on a Viable Vision (VV) project, with the goal to improve availability to the end consumers. Titan has about 8,000 selling points; 60% market share in India; etc. The challenge lies in shifting the entire supply chain, from vendors to the end consumers from a traditional push- (forecast system) to a pull-based system. In order to achieve this change, several main issues were dealt with, such as: how to evaluate the added value of a pull system; how to shift a traditionally forecast-based system (operations, sourcing and distribution to pull) and how to migrate different sales channels to pull. Where do we focus first and how do we take our change to the market? This presentation is an update to last year's presentation.
Raz, R. and P. Sukumaran (2011). TOC for effective merchandise Titan Industries Limited Jewellery Division. TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals, Palisades, NY, Goldratt Marketing Group.
Titan Jewelry is a division of Titan Industries, the largest jewelry retailer in India, and part of the Indian TATA group. Titan Jewelry embarked on a Viable Vision (VV) project, with the goal to sustain their status as an ever flourishing company. The challenge lies in exploiting the main constraint of any retail – the traffic in stores, while increasing inventory turns. This translates to improving the merchandise effectiveness: having the right inventory in the right store at the right time. The more effective the inventory , the less inventory is needed to support the current level of sales. The more effective the inventory the better we can exploit the current traffic. The unique nature of the jewelry industry is discussed which includes sales over time having a long tail. A process for addressing the head, the body and the tail of the distribution is provided. An update of this presentation was given in 2012.
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
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.
Schragenheim, A. (2009). Managing stocks in low yield environments. First European TOCICO Regional Conference, Amsterdam, The Netherlands, Goldratt Marketing Group.
The presentation objective is to share insights about managing stocks (make-to-availability) in V-plants in which there is no control over the outputs (low-yield production environments). The presentation includes: identifying an environment that falls under this scenario; a case study of an environment with multiple quality levels; and a generalization to other environments that can use the same mechanism. Attendee benefits include: Learning how to model a typical V-plant environment in the supply chain; understanding how to choose the best modeling for an environment taking into account various considerations; and learning how to deal with high scrap rates in the process. In V-plants, very few raw materials are processed into multiple finished goods. These finished goods are sometimes the result of different processes; different quantities used or sometimes even the result of some uncontrolled variable. In these cases, we’re getting an unpredictable number of different end items. Sometimes we have enough statistics to know how many of these items will turn up as one of the end products. The case study details an environment in which we receive 4 different qualities of an item. All the qualities can be sold, as different customers need different qualities. The challenge lies in how to model the environment in order to receive the best availability coupled with the lowest inventories.
Schragenheim, A. and A. Weisenstern (2007). Dealing with seasonality in distribution environments. TOCICO International Conference: 5th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NV, Goldratt Marketing Group.
This presentation describes the four types of seasonality (holiday promotions, new product introduction, reverse seasonality and sharp demand changes) and focuses on the sharp demand changes. Dynamic buffer management (DBM) is generally used to adjust buffer size up or down over time; however, DBM doesn't respond quick enough to respond to sharp demand changes. An example is provided showing the impact of inventory balance using DBM during sharp demand changes. The assumptions, benefits, and shortcomings of using DBM and traditional forecasting are provided and compared under different scenarios. In Inherent Simplicity (a software package for supply chains) the steps used in each stage of the sharp demand change are provided: 1. Stock buildup; 2. Wait for stock; 3. Inside the high demand; 4. Stock builddown; 5. Back to normal. An example is provided.
Schragenheim, E. (2009). Distribution: The TOC way. 1st Annual North American Regional TOCICO Conference, Tacoma, WA, Goldratt Marketing Group.
This one-day master class covers the TOC way of handling distribution chains. All the important points are going to be part of the day. It should serve everyone interested in distribution of goods through geographical distance, which includes storing, transportation and selling.
Schragenheim, E. (Jan. 5th, 2013). Managing stock – not always for availability. TOCICO Webinar Series. TOCICO, Theory of Constraints International Certification Organization.
The strategic approach to commitment to availability. Replenish-to-availability - the assumptions behind the TOC technique. Replenish without commitment to availability. Dynamic buffer management (DBM) – advantages and limitations. Managing clients that are not the end users. Managing suppliers – the role of throughput value days (TVD). The full picture of managing the supply chains.
Schragenheim, E. and P. Chowdhury (2012). Supply chain management: The production part, the TOC way so far and what lies ahead. TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, Il, Theory of Constraints International Certification Organization.
The presentation and facilitated session describe the evolution of TOC from OPT, drum-buffer-rope (DBR), buffer management (BM), simplified drum-buffer-rope (SDBR) and make-to-availability (MTA) and reliable and rapid replenishment (RRR) strategy and tactics (S&T) tree. The assumptions of SDBR in make-to order (MTO) are provided. A MTA, MTO (MTA/MTS/RRR S&T) overview is provided.
Schragenheim, E. and P. Chowdhury (2012). TOC body of knowledge closing - Supply chain summary. TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, Il, Theory of Constraints International Certification Organization.
This session is a recap of four standing on the shoulders of giants (SOSG) process sessions. In the supply chain discussion the group discussed the assumptions. Dependent setups many times in the process industries are a prime example. This violates the assumption that sequence doesn't impact setup time. Does it impact MTO (make to order) environments more than MTA (make to availability)? What is the cycle time? The cycle time is defined as the time from when we produce an item with a given setup to when we produce this item again. What if we have a single large order that is many times larger than the normal order (a new store or stores in a region are coming on line)? What is replenishment time in make to availability (MTA)? If you have a long production or transportation lead time the responsiveness is delayed? Order daily replenish frequently is discussed. How frequent is frequently with the long delay?
Schragenheim, E., moderator (2012). Panel discussion: Standing on the shoulders of giants process. TOCICO International Conference: 10th Annual Worldwide Gathering of TOC Professionals, Chicago, Il, Theory of Constraints International Certification Organization.
This presentation discusses the results of the four facilitated sessions to identify problems, inconsistencies, or missing components in a given field using the standing on the shoulders of giants (SOSG) process. The sessions were supply chain, critical chain, distribution, and thinking processes.
Smith, C. (2008). Beyond MRP: How actively synchronized replenishment (ASR) solves the material synchronization challenge. TOCICO International Conference: 6th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.
This presentation describes the term actively synchronized replenishment (ASR) which is different from the traditional push (replenishment or distribution) solution. It includes manufacturing and MRP with many (6 or more) levels of bills of materials, vertically integrated business unit, etc. The underlying problem is that of the push versus pull distribution system conflict. The company wants to use lean (pull) but the company is also using a forecast to determine demand (push). The undesirable effects (UDEs) of poor material synchronization are listed and discussed. Survey statistics related to the problems of push are provided. The purchasing and fulfillment links seem to be working well in a number of companies but the MRP (all pure pull) is not functioning well. MRP was conceived in the early 50s and commercially coded in the 1970’s. The environment has changed significantly while MRP has not. The details of ASR are provided with buffer locations and the supporting logic. Examples are provided where ASR should be use. ERP (enterprise resource planning, the traditional push solution) has not solved the problem.
Smith, D. (2005). How to systematically tackle a supply chain using TOC. TOCICO International Conference: 3rd Annual Worldwide Gathering of TOC Professionals, Barcelona, Spain, Goldratt Marketing Group.
Debra Smith describes her company (Constraint Management Group, CMG) niche of mid-sized companies. She describes one of her first implementations in 1999. The results include: three months from setting the strategic direction of the company they went live across the board; the first month they shipped 40% more than their previous record breaking month (shipped everything in their backlog); the second month they shipped everything their dealers ordered 98% on-time delivery (OTD). The dealers had been ordering five hoping for three (the good old beer game); lead time reduction from 90 days to 2 – 10 days (product dependent); inventory reductions in excess of $36 million in plant inventory; major capital investment deferment; and in sourcing of several million dollars of business. A second case is provided. In 2001 a mid-sized ($1 billion) wood product supply chain approached CMG about implementing TOC. Their core problem was to A Maximize tree company’s ROI they must B Maximize ROI in timber which caused actions to D Manage timber and timberland as a profit center on the other hand they must B Maximize ROI in manufacturing facilities which caused actions to D’ Manage manufacturing as a profit center. This is the local optima dilemma. The solution involved the elimination of both transfer pricing and the allocation of corporate overhead between plants, business units and product lines. An internal supply chain throughput points decision model was constructed for decision making on buy and sell logs. Results include: Reductions in inventory in excess of $50M (>35%); ROI from .5% (the past best ever was 4%) to 15% in 12 months, 19% last year; 20% Increased volume in plywood with 1.5 less plants (450 less employees) within the first six months; OTD from mid-40’s to mid-90’s (measured against a mixed product shipment); Lead time from 14 days to 2 days. The year after implementing they shipped 40% more throughput with 30% less logs and one less plant (the plant was very old and set up for old growth timber the decision to scrap it versus retool could finally be made because of the tremendous increased capacity unleashed). Remember the scarce resource is the log and if they don’t cut it - it keeps getting bigger! We took the concept of sorting logs to the forests and planned their cuts by the characteristics the forest harvest would deliver.
Smith, D. (2009). A vertically integrated supply chain case. 1st Annual North American Regional TOCICO Conference, Tacoma, WA, Goldratt Marketing Group.
This presentation is a follow-up on the LaTourneau Technologies (LT) presentation given by Dan Eckerman at the last conference. This is my view of what we did versus what Dan presented which was his view. Debra provided an overview of the steel mill and what they build (oil rigs, large heavy equipment loaders). The vertically integrated supply chain with control points and strategic buffers was described. Education provided included a two-week Jonah course. Lessons learned i.e. control points in sales, engineering, front end and back end production, etc. with respect to the bottleneck capacity, measures, portfolio management, etc. were also discussed. The current design for critical chain, drum buffer rope, and the replenishment solution was described. A description of actively synchronized replenishment (ASR) was provided. These concepts were discussed for internal constraints, industry downturn and economic downturn (recession) environments.
Soo, H. (2008). Solution for profit - High-end handbag factory in China. TOCICO International Conference: 6th Annual Worldwide Gathering of TOC Professionals, Las Vegas, NE, Goldratt Marketing Group.
This presentation describes the implementation of theory of constraints in a ladies fashion handbag manufacturer in China. Some raw materials come from Italy. Characteristics are: the company seldom has reorders for the same SKU; customers order twice or four times per year (seasonal forecast); flexibility in delivery lead time (20-45 days); delivery lead time (excluding shipment) averages 45 days from date of all information confirmed, material received and validated, etc.; about 20% of orders are required within 30 days; average production lead time is 45 days; high variability in daily production capacity; and WIP is very high. Undesirable effects (UDEs) include: material is in shortage when needed; production priority changes frequently; too much expediting exists; and often resources are not available when needed. The implementation objective was to achieve 0 throughput dollar days (TDD) in 120 days. Current TDD is over 100 million. After implementation lead time was 12 days compared to 45; inventory level was 500 kits compared to 3000 and due date performance was 100% compared to 60%.
Stemberger, A. (2009). We've implemented TOC: Now what? First European TOCICO Regional Conference, Amsterdam, The Netherlands, Goldratt Marketing Group.
This presentation discusses how to sustain the TOC momentum. The challenge is that of being a first-tier supplier to Ikea and a part of a global supply chain to Renault/Volkswagen while surviving was the short-term goal. Implementing TOC was our choice to survive and thrive. Now that the key employees embraced the TOC logic and live with it how are we, the management, sustaining the momentum? The solution to sustain the momentum is that we were focusing on people and using the right tools to reach our goals: we started to measure company/employee performance the TOC way and gave employees a tool that enabled them to reach ambitious goals. The tool was TOC-based software that helped us to sustain the TOC momentum and introduce POOGI: a prerequisite for a long-term growth. The mentioned tools in the right hands of our TOC users have proved to be the right choice for the above challenge even after the consultants left. We exploited the existing ERP beyond its basic purpose. We have succeeded in integrating the TOC way of working in our ERP system that is now becoming more intelligent and supporting us also with TOC data. The results are: we are focusing on high throughput projects and winning them. We are paying suppliers on time, paying debt on time – cash is not a constraint any more. Ikea's intentions were to eliminate us as a supplier since our due date performance (DDP) was so poor. Our promise to them was that we would become one of their best suppliers materialized earlier than even we thought possible. Suppliers in the caravan industry had already developed an alternative supplier since our DDP was so poor. Now we are getting better throughput projects from them. Our warehouse turned into a ghost house. Other results include a lower working capital employed, increased inventory turns, and sales increased (in one location) by 80% without any additional investments in the new capacities.
Stratton, R. (2013). The supply chain solutions of TOC basics workshop. TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.
In many supply chains customers and their suppliers unnecessarily suffer shortages, late delivery and excess inventory that seriously threaten profits. This session will enable you to understand how pull systems, encompassing fast response, can be developed in complex MTO and MTS supply chain environments together with deep insights into the underlying logic. The Drum-Buffer-Rope (DBR) application of TOC was originally concerned with the MTO environment where the cost world thinking manifests itself in local optimization, intermediate due dates and views any excess capacity as waste. DBR directly challenges this thinking by acknowledging the critical role of capacity buffering, the characteristic behavior of the flow paths (VAIT), the merits of aggregating buffers and the central role of what is now referred to as Buffer Management (BM). BM is a management signaling system based on four functions (prioritize, expedite, escalate and target improvements) that is key to this and all other TOC applications. Simplified DBR is a development that avoids the complexities of the close scheduling of even one resource by managing the aggregated planned load on the most heavily loaded resources and delegating the detailed scheduling to the shop floor. This application is now widely used as it provides the benefits in most environments without having to address the complexities of scheduling algorithms. Make to availability (MTA) and replenishment are TOC applications that are concerned with MTS environments and therefore stock as opposed to time is used in the management of flow in the wider distribution network. The concept of aggregation is again evident in ensuring stock in the supply network is kept at the lowest level until pulled through the network. The associated stock buffer management system responds dynamically to stock availability in the short term and stock targets in the longer term. The consistency in the DBR and MTA buffer management systems means that MTO and MTS products can be managed through one BM system. Therefore DBR, SDBR, MTA and Replenishment offer a coherent theoretical development that is consistent with TPS and lean supply but applicable in more complex environments.
van Zantwijk, Y. (2003). TOC for distribution: The integrated supply chain. TOCICO International Conference: 1st Annual Worldwide Gathering of TOC Professionals, Cambridge, England, Goldratt Marketing Group.
This presentation describes four types of supply chain structures: Type 1: Industry A to Distribution to Industry B; Type 2: Industry A to Distribution to Professional end user; Type 3: Industry A to Distribution to Retail end consumer; and Type 4: Industry A to Distribution to end consumer. The dynamics of the economies of scale and scope both in manufacturing and retail produce increased competition and a focus on reducing costs and simultaneously increasing value. This approach causes the conflict of pressure to reduce responsiveness and the increased complexity of processes. The presentation describes the value propositions for end-users and the generic Viable Visions for each link in the supply chain (Industry A, Distribution, and Retail).
van Zantwijk, Y. (2009). Supply chain synchronization. First European TOCICO Regional Conference, Amsterdam, The Netherlands, Goldratt Marketing Group.
This presentation is organized as an introduction to the Agentrics background and supply chain synchronization offer; a description of the supply chain improvement methodology, results and obstacles, and questions and answers. The aim of Agentrics is to synchronize actions across the supply chain to satisfy the end user. Agentrics is a software company organized by 23 large retailers to counteract Wal-Mart prior to 2000 before the internet bubble burst. The company was bought by a large supply chain integrator solution provider. It provides a collaboration platform for all links in the supply chain. Agentrics provides a link above individual ERP systems from suppliers, distributors and retailers. Inventory and consumer characteristics are discussed. The shift from push to pull inventory systems is discussed. The strategic dynamics and strategic solution are discussed for global supply chains.
Warchalowski, J. and P. Duncan (2003). Impact of changing business environment on TOC implementation. TOCICO International Conference: 1st Annual Worldwide Gathering of TOC Professionals, Cambridge, England, Goldratt Marketing Group.
This presentation describes a case study of a vinyl cover stock manufacturer. Products are used in automobiles and industrial applications. Two large equipment, capital intensive V-plants produce revenues of $250 million. Business issues include a large order backlog, high expedited freight, marginal corporate profitability, large capital investment, aging and poorly maintained capital equipment, seasoned and senior leadership team with new, young president (daughter of chairman and owner), and recently reduced work force in both facilities. The presentation describes the TOC journey and results. The core conflict for the automotive supply chain preventing it from making more money is the focus on the requirement of satisfying the end customer by implementing rules that satisfy this need versus the requirement that each link in the chain optimize its operations by letting each link establish rules to minimize its cost (for example). This conflict dictates that the automotive release (push) system is used throughout the automobile industry. Lessons learned include: don’t implement TOC applications in isolation – understand the overall industry and consider the company’s role in their supply chain – holistic application; don’t ignore previous decisions the company has made that have yet to impact the organization; make sure the leadership team can make the journey – it takes 3 to 6 months to get a new VP up to speed; and don’t let your own pride prevent you from changing the direction of the solution.
Woeppel, M. (2011). TOC tapped to accelerate Gulf of Mexico cleanup. TOCICO International Conference: 9th Annual Worldwide Gathering of TOC Professionals, Palisades, NY, Goldratt Marketing Group.
Pinnacle Strategies was called upon by BP to rapidly improve supply chain availability and decontamination efforts of what may be the worst environmental disaster in the US. Earlier, BP's Deepwater Horizon well exploded, less than 48 hours after the initial inquiry, Pinnacle Strategies began a marathon of manufacturing plant visits across North America and Europe that led to an almost instant doubling, tripling, and in one case 10 fold increase, of manufacturing capacity for boom, skimmers, and absorbents. After the well was capped, Pinnacle Strategies led improvement activities at decontamination sites across five states where thousands of boats, ships, and rigs were decontaminated before returning to their normal service.
Woeppel, M. (2013). TOC tapped to accelerate Gulf of Mexico cleanup (Encore). TOCICO International Conference: 11th Annual Worldwide Gathering of TOC Professionals, Bad Nauheim, Germany, Theory of Constraints International Certification Organization.
In June 2010, Pinnacle Strategies was called upon by BP to rapidly improve supply chain availability and decontamination efforts of what may be the worst environmental disaster in the US. Only weeks earlier, BP’s Deepwater Horizon platform exploded, taking 11 lives and sending oil gushing for three months into the Gulf of Mexico. Less than 48 hours after the initial inquiry, Pinnacle Strategies (www.pinnacle-strategies.com) began a marathon of visits across North America and Europe that led to an almost instant doubling, tripling, and in one case 10 fold increase, of manufacturing capacity for boom, skimmers, and absorbents. Later, after the well was capped, Pinnacle Strategies led improvement activities at decontamination sites across five states where thousands of boats, ships, and rigs were decontaminated before returning to their normal service. In this presentation, Mark Woeppel will describe the Theory of Constraints steps used to achieve the extraordinary increases in capacity by improving bottlenecks at dozens of factories, ensuring that supply never constrained the fight against the oil spill. He will also describe how they accelerated the cleaning of contaminated vessels saving more than $700 million by identifying key measurements and planning the bottleneck into the operation.