Invalid Assumptions people make about TOC

There are many reasons why you should NOT attend a Throughput Live! event on Theory of Constraints.

Using the TOC Thinking Processes, the following diagram is called a Current Reality Tree.

The arrows represent the cause and effect relationships of sufficiency logic. You read the logic between two boxes (called entities) connected by an arrow by saying "IF entity1 THEN entity2 ".

The ellipse represents an AND condition between two entities which you read by saying "IF entity1 AND entity2 THEN entity3.

For instance, you would say IF we need to maintain and increase our profit THEN we need to be more competitive, or, IF there is nothing new under the sun AND other gimmicks haven't worked THEN TOC can't help us here anyway.

The "I can't go because I'm too busy" reason
* Instructions on how to read the diagram are given above

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The "We have no budget or room in our business" reason

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The "We already have it" reason

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The fact is, the path of least resistance is to just not go. Going will take energy. It will take you out of your comfort zone. When you get back to work there will be a backlog of crucial emails, meetings and problems that you'll need to address. At the end of the day the whole idea is just one more problem you have to deal with.

But let's look at the above diagrams. Surely there are some invalid assumptions we have made there.

Is there really "nothing new under the sun"? If that were true how could we have the continual advancement of technology and human knowledge that we all struggle to keep up with each day?

It is certainly true that there have been many "flavour of the month" management ideas over the years. Many are here one day and gone the next but a few, such as Just In Time manufacturing, which is now over 50 years old, and Statistical Process Control, which is now over 80 years old, are based on the physical sicences and have stood the test of time. They are as relevant today as they were when they were first conceived. Theory of Constraints, which itself is nearly 30 years old, is also based on the logic principles used in the physical sicences. It has established itself as the most significant business management innovation in the world today which is being used by thousands of corporations, and is taught in over 200 colleges, universities and business schools. The founder of TOC, Dr. Eli Goldratt, has sold over 3 million copies of his seminal book, The Goal, which has been translated into 23 languages.

If that is so, we can deduce that TOC is, in fact, important (even if you've never even heard of it before).

What about some other assumptions? We don't doubt for a minute that you are too busy and don't have time for unimportant things. But TOC is important.

 

TOC is new knowledge. It requires no new equipment and no new computer software. It is just knowledge.

That is why TOC is so powerful and can transform your entire business.

If that is your current reality, what about the possibilities life holds for the future? Well, the TOC Thinking Processes have a tool for determining that as well. It's called a Future Reality Tree.

An entity shown in a square box is called an "injection". This is an entity which does not yet exist in your current reality. It represents a change you need to make to move from your current reality towards your future reality. 

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Could this be your future reality? Do you have any reservations about the logic as it is shown? What are they? What happens if you add them into the chart as additional entities?

No doubt we have made many assumptions in formulating this diagram as well. Can you see any?

TOC is well proven to reduce lead times and increase throughput and there are many case studies to demonstrate this. Click on the button below to see some.

Downlad ViAGO references and case studies

 

And so, clearly the question is not "is it possible to achieve at all", because we see here that it is possible and other businesses have achieved it. The question is; can this be achieved in your business? Do you know the answer? Of course, without spending a little time thinking about it and investigating it, nobody knows.

The reality is that an investment of just 4 hours at a Throughput Live! event will start to give you the new knowledge which can effect the future direction of your business operations and enable you to make more money, now and in the future. That is an ROI you cannot achieve by any other means.

 

 

Can we think about the issues that face us any further? What other avenues can you take to improve your business performance besides Theory of Constraints? There are probably a multitude of get rich quick schemes to choose from, not to mention all of the silver bullet products and computer software you could buy.

Your company wants to increase profits. What mechanisms are available to you? Cost cutting is a common approach, well intended but often to the detriment of the organisation. How many cases have there been where high powered CEOs come in and slash costs to the point where, after they've left just as quickly taking a huge sum of money with them, the company is left in a precarious or even disastrous situation?

Cost cutting may seem to have some short term benefits, but what of the long term? Let's use the Current Reality Tree tool to map it out. Do you have any reservations about the logic? Can you add them in? Can you see any invalid assumptions?

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As you can see, it does not take long in the reality of cause and effect before we can no longer reach our goal using this approach. The key must be an increase in revenue...

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Ah, but it seems this is not an easy path either. All businesses struggle to find the way.

You would be surprised and even shocked to learn what TOC teaches us about the cost based decisions we make every day in an attempt to increase sales and profitability. In many cases, TOC is at odds with our cost based world.

The decisions you reach in the product cost world are different to those you reach in the throughput world of TOC because the whole concept of a "product cost" does not make sense from a throughput point of view. Can you believe it? In fact we can show you a typical cost accounting example that leads you to the wrong decision about which products you should sell. A decision which you've probably already made on many occasions.

Click on the button below to see the example of the differences between the cost world and the throughput world.

Difference between the cost world and the throughput world

 

If you've read this far then you are on the edge of a whole new world of increased profitability, better decision making and improved team coherence and effectiveness. Theory of Constraints is an entirely new overall management philosphy. By using the 5 Focusing Steps and the Thinking Processes other companies have dramatically changed their fortunes and achieved breakthrough performance gains in days, weeks and months (not in years or never as so often happens). What do you have to lose by looking into it a little furhter? Nothing. Come to a Throughput Live! event and you will see new opportunities all around you. You will be amazed at the things you used to think.