|
|
 |
|
|
|
|
|
Video Presentations Videos available from the October 1996 Jonah Upgrade Workshop in Colorado Springs. JCS-1 - Conference Opening Address
Presenter: An Overview - How To Construct Marketing Offers, Giving Recommendations, The Five Layers of Resistance and Using CCRTs Eli begins the morning with the reading of the front page article from that mornings Wall Street Journal, detailing General Motors' new distribution system known as Enterprise. He details the two primary policy obstacles that were necessary to deal with in order to build and implement the system. He ties the struggle with GM into the resistance of change, talking about the various interests and the inertia that had to be dealt with. Eli then moves the discussion of the five layers of resistance to change. He breaks down the discussion around each layer by, first defining what the layer is, second, elaborating on those definitions by offering clarity on the way they have previously been defined through the use of analogies and alternate definitions, and third exploring the various tools and methods used to overcome each. After the discussion on the five layers, Eli proceeds to the TOC derived Marketing or Mafia Offer to an outside/external entity. Eli provides an in-depth discussion of the importance of and thus, the emphasis in the Marketing Offer on, the benefits to the external entity instead of the traditional focus on price. He illustrates the steps necessary to construct the offer and then compares the difference between the marketing Jonah Program® and the subject matter Jonah Program®. An example of the Evaporating Cloud and breakthrough solution is provided from the munitions industry. Finally, Eli spends a short time on the recommendation process reviewing what the primary objectives of a recommendation are and how to use them effectively with subcomponents of a chain.
JCS-2 - TOC Measures and Incentives
Presenter: Based upon traditional measurements, the predictable results of implementing DBR are, that machine non-constraints and labor efficiency goes down, work in process inventories shrink, and finished goods inventories shrink. All of these things are negative as far as traditional cost accounting is concerned. The conflict with measurements is immediate. As a result, at least eight clouds form preventing the manager from being responsible. The core problem is that managers cannot verbalize the ramifications of their actions using the cost information they have and neither can the cost accountants who provide it. This results in a self preservation philosophy of local optima. It's not the accountant's fault. There is a real dilemma. "Managers ask for costs. I must give costs. Reported costs do not control costs. I must not give managers costs." The biggest conflict is the share holders conflict: "I provide valuable information to satisfy stockholders and I must comply with General Accepted Accounting Principles (GAAP). To provide valuable information to satisfy stockholders, I must give good business decision making information which means, I must radically change the current accounting principles." The injection here is that accountants know absorption accounting is not the best method but everyone is doing it. Direct costing is simple, well defined in accounting literature and an easy bridge to satisfy all external reporting procedures and GAAP.
Presenter: TOC in Custom Manufacturing PG Bell is a producer of porcelain, architectural panels for the construction industry (signs and wall panels). Every order is custom. The production of panels is 60% science and 40% art. Product mix changes constantly. Fifteen percent of the company's sales are from Canada, 30% sales from the US, and 55% sales from elsewhere. Most orders require 2-4 months lead time, some orders two weeks. Delivery must be at the time desired but construction is often delayed or the schedule changes which pushes a mad rush towards the end of nearly every order. Why TOC? They are a cyclical company. When output is rising, there is no need to learn. When output is declining, you need to learn fast. We were in crisis. Three major orders all coming due together with no slip possible. We needed 175% capacity over and above the previous maximum to succeed. We were already over staffed. Their Sales manager finished The Goal and It's Not Luck, one year, two days and two hours ago. The whole world changed. Ten days after the first meeting, they broke their first constraint in production. Then the next and the next, as they rolled through production constraints. Results: In the last year, sales went up 57%, profits went up 95%, and they reduced shifts from 1.8 shifts per day to one shift per day. Delivery time went from eight weeks to four weeks. In last quarter, profits where up 134% and Sales up 62%. In breaking their constraints, they felt they were chasing Herbie about the plant - they went from furnace to spray to engineering. One injection: they pulled an engineer out of production and sent him to Hong Kong to teach people how to order parts on PG Bell's order forms. This bypassed engineering completely. In the last ten years, they hadn't implemented one improvement in the plant. Before, to get $10 million in sales they worked three shifts for a year. Now they can do $10 million in one shift in six months. They had seven key people on the TOC Team. The people on the line don't even know anything has changed (except they have more slack time). Undesirable effects: Now, they don't know the company any more. The plant culture changed and their intuition isn't as good as it needs to be. One engineer asked, "I understand why you want it this way. I know it will work if we do it your way, I still want to do it the old way." When the answer was no, the engineer took two days off sick. When they started focusing on the engineering/office constraints, the plant went back to the way it was before. Only this time, they knew what to do. Return on Investment is great. Everyone will get a bonus. Plan is to continue.
JCS-4 - Activity Based Costing of Research: How To Measure I and E in the Department of Medicine
Presenter: Why should we be interested in measuring research income and expense in departments of medicine? Research does not exist in isolation in academic medicine. There is a need to understand that education, research and patient care are systematically intertwined. Without this understanding departmental optimization occurs and results in at least one part of the system losing out and that means the entire system ultimately begins a journey on a negative loop. This is an objective look at how knowledge industries can effectively measure themselves. Both throughput and activity based accountings are scrutinized for their validity and their shortcomings. This presentation discusses accounting in the soft world of medical services. The scope involved 125 Medical research hospitals (virtually all the training hospitals in the US). Previously, money was no object. Now, money is the constraint. Working with 125 organizations is like dealing with 125 CEOs. Working with physicians is like herding cats. Their products are: New Physicians, New Knowledge, Improved Patient Care. Their concerns are cost, access, and quality. The institutions are torn between Academic Administration, Health Care Industry and Scientific Investigation. No one knows what the goal is. So, they think ABC accounting will help them to go and ask for more money because they can show where all the money goes. These are smart people They run a non-profit business. But, non-profit does not mean no profit. It means the profits are not distributed to the shareholders. If they don't make 5% to restore assets, they cant get support to buy bonds. Dr. Lewis' approach is: There is nothing so wasteful as doing that which does not have to be done at all. He taught the CEOs Accounting 101- The difference between External Reporting and Internal Communication (both necessary but not interchangeable). Accounting 102 - the inexact science of assigning costs. The questionable purpose of accounting (shift your costs to someone else, decide who to cut or fire, understand costs to improve margin). Will accounting move you toward your goal? Accounting 103 compared Traditional Cost accounting, ABC accounting and TOC Accounting. Nice visuals showed the differences.
JCS-5 - TIM Voor Kantoor
Presenter: A Mafia Offer isn't Enough: Obstacles, Negative Branches, Academic Help and New Ideas Patrick is the Managing Director of TIM Voor Kantoor. TIM stands for Time is Money. This 100 year old company sells office supplies. They sell $18 million in a $1.2 Billion market. Prior to TOC, they were box pushers. Now they are a service organization. Patrick's goal was to implement a Mafia Offer to the market. UDEs of market: Reference office supplies. Office Supplies are not available when needed. Everyone takes them and hordes them. When needed, last minute ordering is very expensive. Mafia Offer Solution: Put a TIM storage cabinet in the clients office and keep it stocked. They receive an itemized list of supplies used weekly-Never Ending Store. Implementation issues: Installed buffer management on fast movers and slow movers. Some clients are far away from TIM so they needed a franchise organization to deliver and restock. They needed to learn to sell the Mafia offer. Decision maker to accept the Mafia offer is higher up in the organization than the purchasing agent. Difficult to raise the issue of office supplies high enough to merit high level attention. Hard to get franchises started with few clients using the Never Ending Store. Some clients have people who stock supplies. Solutions: Hired internal marketing person to teach franchises. Created TT to sell Never Ending Store. Results: Clients doubled or tripled use of supplies (started purchasing other things from TIM that they previously obtained elsewhere). Started ordering Copiers and Fax machines because the TIM's stock person was in the office weekly and was an easy contact. Pilferage went from 10-20% to near zero (before, sales of magic tape went up in December and Binders up in September). Now with the reduction in quantities, there is a maximum that can be taken. Also, accounting is good. One manager told the office, "We have issued 1.2 pair of scissors per person this last month and I still don't have any. I don't know where they are but if they are not back by tomorrow, there will be trouble." They mysteriously returned.
JCS-6 - 7 Tools for 7 Habits
Presenter: Many people that have read Covey’s works as well as Eli Goldratt’s materials have intuitively grasped a connection between the two. Fran Stone makes the bridge between Covey’s seven universal human habits (Proactive, End in Mind, First Things, Win-Win, Understand, Synergize, Renewal), and the tools of the Thinking Processes within TOC (CRT, Evaporating Cloud, NBR, CCRT, Lieutenants Cloud, TT, PRT). Fran maintains that if one practices the Thinking Processes defined in the Theory of Constraints that person is practising the seven habits. More specifically, Fran breaks down and defines each of the seven habits and then provides the TOC tool(s) that correspond to each of them. Fran teaches this material frequently and she finds the TP is THE implementing agent for the Seven Habits. Her book is coming soon. Coveys real work was to put care and concern in the corporate world. Covey says, Empower them. Eli has developed the tools which show them how to do it.
JCS-7 - TOC: A Model for the Application of Multiple Intelligence's Theory in Business and Education
Presenter: TOC is like a mosquito in a nudist colony. Wherever it lands, it works. Humans are human because they have the ability to: invent, construct abstractions, learn reciprocity, solve problems, think of systems, construct meaning from experience, sort information and alter responses and apply metacognition (the ability to think about thinking). The seven different intelligences that humans have include: spatial, logical (math), linguistic, interpersonal, intrapersonal, bodily-kinesthetic, and musical. TOC works because of the three Cs, Constructing, Communicating, and Commons Sense. There is some correlation between intelligence types. Persons with low IQ may have the cognitive architecture needed to appreciate advanced math, language and science. They just lack the relevant background experience. IQ is only one aspect of total behavior. Learning and reasoning rarely function autonomously. Wet logic trees still work. Theory ought to handle all points of confirmation that a competing theory handles and at the same time provide explanations that the competitor doesn't, this is what TOC does.
JCS-8 - Victor and Young
Presenters: The Big Bang The presenters started out by saying, "If there were ten portions of Beauty, Jerusalem took nine. If there were ten portions of resistance, England took nine." Mark and Rahmand Dhedhi both Jonahs since June 1996, made a revolutionary change to their company. They call it The Big Bang! This presentation shows the simplicity of implementing big TOC solutions, in a small family owned and operated business. This testimonial explains the process from the first step - coming to the realization that the problem lies within. From there, the presenters give a clear picture of what it takes to change with ease. Making fabric sample books for wholesale fabric distributors, the company was started in the 1950s. With 75 employees they have cut their lead times from eight weeks to three and significantly lowered inventories while simultaneously opening a new division. They had previously used the "6PM technique" to make management decisions. The two managers met at 6PM, after everyone else was gone to decide on management direction. Then the next morning, they would tell the production people the new direction. They were doing terribly. Mark's wife gave him The Goal. He thought it was a football book. As he read it, he found the management of the firm had been working against the goal for 20 years! Previously there were no defined responsibilities, they didn't have a process to trust, they didn't have measurements to trust, no credit controls, no way to instill confidence. They didn't have any policy to change, didn't know what customers wanted, didn't know which way to go. Using TOC they took credit control to collect payments due. Split operations into two companies. Identified the constraints. Identified processes. Simplified processes. Improved cash flow. Increased markets. They changed the way they think, now have a clarity of direction and have developed the ability to tackle big projects. They have gained confidence in their ability to make right decisions. They are much more relaxed and able to take the time today to come to America. This is the first time both the Managing Director and the Production Director have been away from the plant at the same time. Now the whole company is involved in decisions. The system is there to help people do their work. "British have a tremendous tolerance for pain it if is based on a principle." Our principle WAS, Managers manage, workers work. Now, we are enabling and the pain is much, much less.
JCS-9 - Cartiva
Presenter: This is a new used car dealership. The goal was to create a stand alone agency that delivers the used cars people want to buy versus selling cars the dealer has in stock. Traditionally, only 50% of the market goes to a used car dealer to buy a used car. Only 20% of those who do go close on the first visit. Why? Too many of the wrong cars and too few of the right ones. Cartiva based its method of operation on the proven TOC Distribution Solution. They used the five day Distribution course, and established a large lot of used cars that becomes the restocking supply for the network of used car dealers. Dealers order cars to fill slots at their lots based on the type of car they want. The cars are ordered unseen (they have a standard, extensive inspection system on-line so agents can get the replacement car that they want by computer. Car salesmen are on salary and get bonuses based on volume (not sales price). The goal is to match cars to people's needs. The lot manager then develops a Lot Inventory Plan which describes how many of each type of car they want on their lot (allows for variation among lot locations). Cars are classified by type. Initially they developed eight types such as: full-sized four-door, mid-sized two-door, and compact, That quickly changed to over 25 types as dealers adjusted to meet customer requests. Now, if they sell a car, they backfill with the same type car, not just any car. The vision is pop cans and ketchup. Think about a soda vending machine. If it has four varieties of soda and sells six of each kind per day, then they need to replenish every 14 days (average use 84 of the 100 cans available). Think about ketchup. You don't refill the ketchup shelf with beans. If people want ketchup, don't try to sell them beans. Learned: Some cars are substitutable by type. The key is to understand the customers need. You can't have a pull system unless you know this. Best solution for small lots. Greg Sorum talks about the obstacles faced in implementing these new ideas. It was very difficult getting the people to understand the value of the TOC replenishment principle. The feeling was that all of the cars that they held were unique--How do you replenish a unique product. Basically, Greg faced a general resistance to change; he continues to discuss how he systematically addresses the problems through the Prerequisite tree, and the five-day Distribution Workshop which effectively changed the paradigm of the industry from putting cars in a space to having the right car in the right space at all times.
JCS-10 - Hi-Therm Corp.
Presenter: Production the TOC Way: A Jonah's Experience Hi-Therm is a growing producer of PVC windows for remodeling and new construction. They were established in 1980 and made wood, aluminum and PVC windows. Now just PVC. In 1987 they were making 30 windows per day and $2 million gross. Now they are making 600-700 windows and $20 million gross. They added some additional space and more equipment. But even then, they couldn't break 300 per day until they went to TOC. Lead time went from 5-6 weeks to two weeks. They increased their volume, tightened suppliers, then, Crash!! Three weeks of down time. They realized they didn't really know what they were doing. An additional problem was the sales bell curve. Since most of the market is in Canada, most sales are during summer. Almost none in December to February. Bruce talks about his involvement in the Jonah Program® in March of 1994 and the subsequent realizations of what was needed for improvement. Through the use of the Current Reality Tree in the Jonah Program®, Bruce discovered that the core problem of the company did not lay within his area of influence. He also discovered the subsequent actions that he had to take to gain more buy-in within his company. He decide to work as much with the TP and TOC within Hi-Therm in order to peak interest and obtain buy-in from the other areas not under his control or direct influence.
JCS-11 - Bal Seal Engineering Co.
Presenter: Implementation of DBR and Working with Constraint Shifting Bal Seal's products center around a patented canted spring that energizes Teflon seals in the electronics, petrochemical, instrumental and medical fields. While they knew TOC from Eli's books. The breakthrough came when they attended an MSW, first open and then a dedicated. They took the two-day simulator course and wanted to create a Bal Seal version of the simulator. In the process, they finally (they had never been able to do it before) created families of products. When they did it, they found they had basically six families plus the basic springs. This alone was a tremendous breakthrough. When they asked for the $40,000 for the five day DBR course, promising a 30 day return on the investment, it was approved. The PRT was built by the team on five pages. They put it in MS Project and then implemented it in 30 days. The WIP dried up in two days. People became shocked with nothing to do. One senior manager visited every worker on the floor, personally as soon as there was no work for them to do to explain it was OK. They also stopped working overtime but continued to pay for the six days of work. Excess capacity surfaced in every department. They were able to exploit the constraint now that they were not distracted. The lead time was reduced from eight weeks to eight days. On time delivery became 97%. Now, people wonder why the other 3% is late. The problem is not in production anymore. These five managers took the impossible and in 30 days achieved work everyone thought was impossible! The Manufacturing Manager worked himself out of a job. He is now working on re-engineering sales. The predicted effect took place. In two months the constraint moved to sales. The cost of procrastination is enormous! Every month of procrastination cost much more than the entire implementation process.
JCS-12 - The Five Layers of Resistance and the Ministry
Presenter: In a most eloquent manner, Rev. Jacob brings viewers to understand that our actions and perceptions are mirror images. Misunderstandings, resistance to change and conflicts are often nothing more than different perceptions of reality in action. We must understand others' perceptions, in order to understand and accept their actions. If others see our reaction without seeing our perceptions, they wont understand us or will have conflict with our actions. A passage from the Bible (Exodus) is used to exemplify this notion where lack of action prompted God to help Moses overcome his perception of being an unable messenger. This analogy is two-fold in its power to motivate change by first, addressing perceptions and second, by bringing clarity to how TOC and its concepts could be useful in religion. Like any other organization, the church (and synagogues and mosques) is also struggling in these highly competitive times. What better place to bring a process of on-going improvement?
JCS-13 - Spin Selling TOC
Presenter: Larry is a consultant in quality. He became a Jonah in November 1995. He later learned Spin Selling and now uses it. Spin Selling is a book that was written based on a study of 35,000 companies, comparing that which works in selling with what doesn't. Larry is taking this knowledge from the best selling book and transferring the knowledge to the logical structure of TOC - the Transition Tree. Selling automatically creates obstacles. Raise features and benefits and people automatically raise obstacles. As a result, the salesman must spend 90% of time overcoming obstacles. Senge said, "The harder you push, the harder they push back." Spin selling works by eliminating obstacles. After Larry's presentation, Eli Goldratt makes some comments about Spin Selling and its implications on TOC. Eli feels that the book suggests the need for the cause and effect, but leaves the salesman to have to build this on the fly. The salesperson cannot find a core problem or the nature of it. Eli then shows how to quantify the benefits and costs to the customer - we make the false assumption that they will be able to do this naturally. Eli concludes with the delivery of the solution, the fact that the negative branch reservation should not be improvised, it must be done.
JCS-15 - How to Construct Marketing Offers
Presenter: What does your market want to buy from you? What do you want from your vendors? To put it in simple terms, both parties want a solution to their problem. The benefits of the transaction are many times, cast aside in lieu of the penalty - the cost. Reducing the penalty is easily copied by competitors and thus is a short term solution at best. The question is then, how to create a long term offer that distinguishes you from your competitors? Drawing the logical connections between the benefits of your offer to the problems of your clients makes perfect sense. Obviously then, you must genuinely understand their problems before you can have a sufficient solution to those problems. This three hour session demonstrates how the Thinking Process can be used for creating offers that solve- not symptoms, but core problems of those with whom you deal. How can anyone refuse an offer that solves the root of their problems? Implementing the offer of course results in the need for change, usually on many levels. Therefore, in order to implement the offer, the buy-in of others is needed. The logic of the analysis will move even the most resistant. Your company, your market and/or your vendors all win. This video is a must view for any one interested in creating better relationships in the overlapping circles of supply and demand.
JCS-16 - How to Give Recommendations
Presenter: Note: This video contains TOC language and its underlying concepts, that if not understood prior to viewing, may create confusion for the viewer. The systematic approach for recommending how potential clients should move onto a process of on-going improvement through TOC is fully covered in this session. This recommendation process has been developed for moving TOC into the market place, yet conceptually, it can be used in other arenas. The detailed steps in the recommendation process TrT are presented from the recommender (presenter's) point of view when they are communicating with a prospective client. The actions in the TrT allow the recommender to bring the prospect to a position of moving their company towards a TOC implementation. The process systematically allows the recommender to identify what the prospect's organization should address (the constraint) and why this change to TOC paradigms will bring the desired results. The TrT details how to direct the prospect to begin this movement within their own organization. All five layers of resistance are overcome for the prospect in the recommendation process. Also, the necessary knowledge for the prospect to systematically peel the five layers of resistance, they will come across, is given. This approach enables the prospect to begin taking action on the recommendation itself. Part one: Upon opening this discussion, clarity is given as to what we are looking for when making a recommendation. We should be recommending that which will bring results. As the TrT for achieving this unfolds, questions are addressed, clarifying the meaning of many of the entities. This portion of the discussion shows how layers one and two of resistance of the prospect are fully removed by using the actions laid out in the TrT. Part two: At this point in giving a recommendation the prospective client understands the problem and the proposed solution, yet they are stuck in layers three and four of resistance. The TrT continues to provide the steps for bringing them through this resistance. Part three: The role playing exercise concludes as an example of a full recommendation process. Closing comments are given by Dale and the audience.
JCS-17 - The Five Layers of Resistance and CCRTs
Presenter: People have good intuition as to what the core problem is. They have tried and failed in the past when trying to address the core problem. Cumulative experience says that it cannot be solved so s/he will start to attack all of the effects instead of the core problem. Dale Houle, Partner of AGI, is holding discussion on the need to redirect your co-workers' emotions to focus back on the area that s/he should - the core problem. What prevents the team from being able to focus together on the necessary actions to address the core problem? The five layers of resistance.
Dale illustrates the problems and solutions of these layers by discussing what works, and does not work, with the Theory of Constraints for gaining effective collaboration. The best way to get buy-in to the problem (Layer 1) is by using a very logical tool to describe the cause-effect logic that stems from a core problem - the Current Reality Tree. If they are not accepting or have not been brought to the realization of the problem, we cannot begin to discuss the solution. The CRT is not the best vehicle to communicate with someone else (it is sometimes perceived as negative or imposing blame), thus the introduction to the CCRT - Communication Current Reality Tree. Dale takes the presentation through guidelines for building the CCRT, basic structure for a CCRT, objectives and communication, and some basic practice with the tool. The presentation then moves to the second layer, by showing how you can take the person through the cloud, raising the assumptions for the purpose of developing a solution together. They will come with an injection; the injection will have Negative Branches (Layer 3) that when trimmed together with the other person, will develop the solution further - overcome layer 3. The discussion continues with the development and removal of layers 4 and 5. Dale then takes the group through the Transition Trees that were written to show how to systematically take intimately involved people and directly responsible people through the layers in such a way that they will not feel attacked or blamed, but will be willing to move forward.
Copyright © 1996-2007, Avraham Y. Goldratt Institute. All Rights Reserved.
TOC World® is a Registered Service Mark of The Goldratt Institute |
