The first two days of TOCICO this year are dedicated to longer workshops of 90 minutes each, where the presenter dives into topics in greater detail than a 30-minute session will allow. This kind of session is always great for deep dives, but leave me exhausted. And, of course, there are four parallel sessions, so there is plenty of great material.
Today, I started with Eli Schragenheim's talk, "What We Can Learn from the Development of Eli Goldratt's Profound Ideas." Schragenheim talked about these profound ideas as paradigm shifts in Goldratt's own thinking, as well as the changes within the TOC community. Schragenheim had been with Goldratt from the final days of his first company, and saw many of the shifts first-hand.
From one perspective, this session was a history lesson in how TOC grew from The Goal to what it is today. From a deeper perspective, Schragenheim was trying to show how someone like Eli Goldratt continually thought and challenged himself (and others) - even when the changes in approach created personal rifts in his own life. Even to the point of admitting he was wrong in front of a crowded conference room. There are a couple familiar principles here: Never say I know. (There is always more to learn.) And Never say I don't know. (I do know something.)
Some of the highlights from Schragenheim's talk - elements that seem to resonate with him and that run through several of the shifts in Goldratt's thinking
- Managers are responsible for observing and investigating inconsistencies.
- The definition of constraint is still a struggle, but there are two basic types. One is the constraint to incremental improvement - if you get a little more from your constraint, you get more throughput; a little less from the constraint, you get less throughput. The other type of constraint is what might limit the ability to get the next breakthrough. It's not so much about a little more / little less, but removing/changing it to create a significant change in throughput.
- We must realize that we cannot stop people from doing things in their system. But we must give them enough intuition that they can understand the impact of their actions.
- Planning and Execution are different beasts. Planning must be done based on what we know and include buffers to allow for our uncertainty. Execution has to be flexible enough to account for uncertainty and tolerate changes with the latest information (without having to devolve into constant re-planning).
I've heard some of the history before, but I don't know if it is written down anywhere. So here it is, for what it's worth. And I am sure I have missed some of the elements.
- Goldratt started with OPT, a software for optimization of a production floor. It did interesting things, but Goldratt found that the software often wasn't enough and had included some education components into implementations. And they saw the challenges that black-box software created for management to be able to take appropriate actions.
- The Goal came out in 1984, representing a big simplification from the OPT approach in the form of the drum, the buffer and the rope (DBR). And this created a rift from the original OPT company (including Eli Goldratt's brother).
- The Five Focusing Steps were developed a few years later, along with the idea of a single constraint instead of bottleneck(s). Another simplification.
- Buffer management came about in The Race and represented the operational ideas of how to use the buffer to make decisions and take action.
- The Haystack Syndrome was written to try to articulate the logic of DBR, but it ended up being harder to read than desired. And eventually Goldratt left this behind.
- DBR software was developed out of the realization that one could not do DBR with the current systems, and Goldratt's first attempt was called "Disaster" - as in what you would get if you didn't understand the logic. There was a strong emphasis on ensuring management understood the logic behind the recommendations of the software.
- The TOC Thinking Processes developed in collaboration with some of the early adherents of DBR and TOC with these challenges in mind. Why don't people understand? And eventually, this turned into the Jonah Programs of the 1990's. But the TP didn't link directly to the earlier work with DBR and the Five Focusing Steps, and it created another rift in the community between those who were implementing DBR and those who wanted to focus on management thinking with the Thinking Processes.
- Goldratt got out of software for a while to focus on the Thinking Processes. Necessary but not Sufficient was written in ~2000 to help think about what should be in software and what should be held by management.
- But there was dissatisfaction again with the Thinking Processes. Specifically, Goldratt could see people procrastinating by "polishing the apple" of their logic diagrams.
- Throughput Accounting developed in the same period with Goldratt's infamous quote that "Cost Accounting is enemy #1 of productivity" coming in a 1983 APICS conference. He eventually stopped using throughput accounting as a primary element of TOC, and he re-focused on the "engines of TOC" in DBR, Replenishment, and CCPM.
- Simplified DBR was another development, pushed by Schragenheim and eventually acknowledge by Goldratt as a good solution. The key realization is that the market is the true constraint. The thinking here also led to the important differentiation between planning and execution. (Something I use heavily in CCPM implementations.)
- And finally the Strategy and Tactics Tree as a means for describing and entire approach to long-term, systematic improvement for an organization.