lean six sigma

TOC and Strategy and Tactics Trees

A. Mark Doggett, Ph.D.

The TOC Components Operations Strategies

Performance Measures

Thinking Processes

Five Focusing Steps VATI Analysis S&T Trees

Operations Drum-Buffer-Rope Batch Sizing Buffer Management

Distribution

Project Critical Chain

Tools Current Reality Tree Future Reality Tree Prerequisite Tree Transition Tree Evaporating Cloud

Audits/Tests of Logic Categories of Legitimate

Reservation

Five Layers of Resistance

Net Profit ROI Cash Flow

Throughput Throughput Dollar Days

Investment/Inventory Investment/Inventory Dollar Days

Operating Expense

Applications

Replenishment Simplified DBR MTO/MTS

Change

• Requires people to:

– Know the goal of the change

– Why they need to do the change

– Understand what they need to do to make the change

– Why their actions will achieve the change

A well written Strategy and Tactics (S&T) Tree provides the answers to these across the organization, to the degree of detail at each level in a logical map.

The S&T Tree Goal

• What: The Strategy

– The purpose or goal to be achieved

• How: The Tactic

– What needs to be done to achieve the goal

• Why: Parallel Assumptions

– The logical connection between the what and how. Why the tactic will achieve the strategy.

Tactic

(Cause)

Strategy

(Effect)

Parallel Assumption

Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat. Sun Tzu

1. Description

S&T Tree Elements

• The Necessary Assumption (found in every box below the first level) – The necessity for the action to be taken. The reason

for the next higher level entity (step) – Why make the change?

• The Strategy – What will the change achieve?

• The Parallel Assumption – Why will the tactic achieve the change?

• The Tactic – What to do to achieve the change?

• The Sufficiency Assumption – Why is another level of detail required to achieve

the change?

Tactic

(Cause)

Strategy

(Effect)

Parallel Assumption

Sufficiency

Assumption

Necessary

Assumption

2.1 Description

S&T Example

1. Viable Vision

Profitable Growth

For Projects, Inc.

2.1 Growth

Build Decisive

Competitive Edge

3.1.1 Build

Meet all

Project Promises

2.2 Phase 2 Growth

Early Delivery

Competitive Edge

3.1.2 Capitalize

Reliability

Selling

3.1.3 Capitalize

Expanding Client

Base

3.1.4 Sustain

Load

Control

4.11.1

Reduce Bad

Multi-tasking, WIP

4.11.2

Full

Kitting

4.11.3

Critical Chain

Planning

4.11.4 Sustain

Managing

Execution

Let’s take a closer look at these entities

S&T Example 1. Viable Vision

Profitable Growth

For Projects, Inc.

2.1 Growth

Build Decisive

Competitive Edge

1. Viable Vision Profitable Growth for

Projects, Inc.

Strategy The Company is

continuously and

significantly increasing

value to stakeholders -

employees, customers and

shareholders.

Parallel Assumptions A jump in profitability

while increasing sales

exponentially year after

year. Throughput must

grow faster than

Operating Expense.

Tactic Build a decisive

competitive edge and the

capabilities to capitalize

on it without exhausting

the Company's resources

and without taking

unreasonable risks.

Sufficiency Assumptions Management attention is

the constraint. The system

must have effective,

robust, and long-term

procedures.

2.1 Growth Build Decisive

Competitive Edge

Necessary Assumptions The way to have a

decisive competitive edge

is to satisfy the

customer’s need to an

extent that no other

competitor can.

Strategy The Company’s promises

to reliable deliveries of

over 95% on or before

promised due-date

Parallel Assumptions Promises are cheap.

Putting money to back up

promises is convincing.

Tactic The Company offers hefty

penalties for each time

interval of delay. Hefty

penalties deters a

competitor from offering

the same.

Sufficiency Assumptions Sustaining both the

decisive competitive edge

and building the

capabilities to capitalize

on it is the real challenge.

3.1.1 Build

Meet all

Project Promises

4.11.1

Reduce Bad

Multi-tasking, WIP

S&T Example (continued) 3.1.1 Build Meeting all Project

Promises

Necessary Assumptions Not meeting promises

when hefty penalties are

involved may bankrupt

the Company.

Strategy The Company has very

high due-date

performance without

compromising on the

content or on the budget.

Parallel Assumptions Critical Chain Project

Management (CCPM)

brings most multi-project

environments to high due-

date performance without

compromising content or

budget.

Tactic The Company

implements Critical Chain

Project Management

(CCPM) culture and

procedures.

Sufficiency Assumptions It is vital that the first

substantial actions will

result in immediate

substantial benefits.

4.11.1 Reduce Bad Multi-

tasking, WIP

Necessary Assumptions When too many projects

are executed

simultaneously, resources

find themselves under

pressure to work on more

than one task. Prolific bad

multi-tasking significantly

prolongs each project’s

lead-time.

Strategy Flow is the number one

consideration. The target

is how many projects are

successfully completed.

Parallel Assumptions Reducing the number of

open projects reduces bad

multi-tasking and reduces

the lead time of all

projects, increasing flow.

Tactic The Company properly

controls the number of

projects that are open at

any given point in time

Sufficiency Assumptions The company must ensure

that the proper amount of

work will be always

maintained.

1. Viable Vision

Profitable Growth

For Projects, Inc.

2.1 Growth

Build Decisive

Competitive Edge

3.1.1 Build

Meet all

Project Promises

4.11.1

Reduce Bad

Multi-tasking, WIP

Implementing the S&T Tree

• Do one step at a time

• Activities at the same level should be done from left to right

• Do lowest level first, then proceed to the next higher level

• Use NBR and the CLRs to scrutinize the S&T and modify as needed

• Use other TP tools for specific issues

Purpose of the S&T Tree

• Align and synchronize organizational communication and performance

• Create understanding and buy-in for change

• Makes assumptions and concerns transparent

• Provides a blueprint or roadmap for achieving strategic goals

• Replaces the PRT and TRT Thinking tools as a means to communicate strategy