How to identify an improvement opportunity for applying TOC

Typically an improvement opportunity would exist when lead time of progress is slower than expected and cash used is higher than expected. Also the business results measured in form of customer satisfaction, inventory and profitability are low.

The root cause of such situations is hidden deep. People know about it intuitively but are unable to do any thing! This root cause also manifests in other very common symptoms -

• Managers and senior leaders are protecting their turfs. They are not working as a team. Finger pointing, politics, excuses, delays, one-upmanship etc. are common.
• Employees are measured primarily for their performance in terms of efficiency viz. how well they use inputs (time, cash, resources, etc).
• Mangers are afraid to keep inputs idle because of the fear of losing them in future.
• Functional leaders are unable to meet their goals regularly and they are coming under pressure of peers in other function and their own managers.

But the truth is that these local improvement efforts are counter productive because of conflicts in the system measures defined locally. For example if production function is measured for output per hour, it may come in conflict with sales function that is being measured for customer satisfaction.

TOC philosophy and tools help in identifying the root cause of these symptoms and enable organizations to deliver more ‘goal units’ faster.