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com

37th TOCPA International Conference


8 March 2018, UK

The world cannot do without


Production

Oded Cohen
tocExpert
Israel, Estonia

www.tocpractice.com 37th International Conference of the TOC Practitioners Alliance - TOCPA


Oded Cohen
Oded has over 40 years of experience in developing, teaching
and implementing TOC methodology, solutions and
implementation processes working directly with Dr. Goldratt
all over the world. Among the countries to which Oded brings
his expertise are the USA, Canada, Japan, India, China, the
UK, Poland, Russia, Ukraine, Colombia, Chile, Peru, Turkey
and many others.
Oded has authored multiple TOC articles and contributed to
numerous TOC books.
Oded in the is the author of Ever Improve – A Guide to
Managing Production the TOC Way, published in June 2010,
translated to Chinese in 2015. Oded co-authored the book
Deming & Goldratt: The Theory of Constraints and the
System of Profound Knowledge – The Decalogue.
Together with Jelena Fedurko Oded has co-authored the
book Theory of Constraints Fundamentals.
oded.cohen.gs@gmail.com
Oded is International Director of tocExpert Ltd, TOC Strategic www.tocexpert.com
Solutions Ltd and Founder and Co-President of TOCPA. www.toc-strategicsolutions.com
www.tocpractice.com
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Introduction

The world cannot do without production


Some observations:
• GDP goes up

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GDP - USA

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GDP - UK

Source; https://www.ons.gov.uk/economy/grossdomesticproductgdp
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Introduction

The world cannot do without production


Some observations:
• GDP goes up
• People have more money to spend
• Some of this money is used for consuming virtual
products and services
• A great deal of money goes into improving the
standard of living
• More and more products become affordable to more
and more people
Hence, the demand for production goes up, not down.
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The market is more
demanding
Retailers experience growing demand for:
• More products
• Bigger variety – colors, designs, options etc.
• Better quality
• Finer specifications
• New products more frequent
The retailers pass the growing demand to their
suppliers, while forcing:
• Reduction of the Time to Market
• Quicker and reliable supply
• Competitive prices
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The world cannot do
without Production
Some examples:
• Air travelling has become more affordable:
➢ Increased demand for flights, for airplanes and for
associated infrastructure and services
• Knitwear has become more affordable:
• Growing Demand
• Increased pressure to reduce prices
• Example: A large retail company in Turkey that sells every
year knitwear in quantity close to half the population
• Growing Standard of Living in China:
• Increased internal demand in China
• Difficulty to get more workers
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The world cannot do
without production

• Production needs Production Management


• Production is a FLOW
• Hence – the world cannot do without the skills
and methods for Managing FLOW
• TOC has a unique way to manage the FLOW
• 40 years of TOC implementations in
productions provide an outstanding and
relevant reference base

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TOCPA –
Sharing Experience

The TOC solution is working!!!


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Managing FLOW means:
• Planning
➢ TOC planning provides: financial benefits, is
realistic and accommodates for “Murphy”
• Execution Control
➢ TOC provides: Focus, Priority, Real Time Status and
prompts Recovery Actions when commitments are
threatened
• Focused Continuous Improvement
➢ TOC provides the areas for improvements through
analyzing the TOC Buffers
TOC for managing production is FLOW & FOCUS
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And hence37isInternational
a veryth
good choice
Conference of the TOC Practitioners Alliance - TOCPA
So…
If it is so good – why are we so few?

Because it demands more than one person:


• The owner(s)
• The CEO/MD
• The Production Manager
• The PPC – Production Planning and Control
personnel
Mostly - it is a top-down approach
Even though sometimes it has moved bottom-up
when the “champion” is promoted
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There is a future in production
and production management

There is a potential value for each one of the key


players:
• The owner(s) – more business
• The CEO/MD – stability and growth
• The Production Manager – smooth flow to
provide contribution to the company
• The PPC – Production Planning and Control
personnel – professional growth

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Produce for availability

Retailers have to hold in stock tens and sometimes


hundreds of thousands of SKUs with very few fast
movers and vast majority of slow movers:
From
Humberto
Baptista’s
presentation
11th TOCPA
Conference
http://tocpractice.com/conference
s/2014/02/15/11th-tocpa-
conference-14-15-march-2014-
brazil/

Where from are these SKUs supplied?


A great deal of the consumers goods are imported
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Replacing Import
And increasing Export
Two major reasons for importing:
Price
Engineering Features

Interestingly – service level hardly plays a dominant role


for the buyers

Is the reality changing?


➢ Is import as cheap as it used to be?
➢ Is it always available?

May be there is an opportunity for local


enterprises?
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Some observations about Imports

Import creates dependency on production capacity


elsewhere!
This leads to:
• The terms and conditions for getting products from
elsewhere become tougher: prices, large minimum
quantities, long delivery times etc.
• Importers and business that outsource outside
lose throughput and experience lower service
level. Retailers pay upfront, hold large stocks and
mark down prices.
• Shortages and excess inventory
• Lower financial results
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There is too much inventory in
the supply chain

From John Darlington’s


presentation

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The Opportunity

Who can profit from Managing Production the


TOC Way:
• Owners and CEOs of existing
manufacturing companies that experience
slow down in sales and profits
• Entrepreneurs who are looking to invest in
some companies that have a potential to
provide a nice return on their investment

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How to go about it?

1. Check the potential of improving production


2. Get the approval of the owner and the CEO/MD
3. Get on board the production director/manager
4. Train PPC personnel (few days)
5. Build your own system to manage production the
TOC Way. Can be done by:
➢ Using a simple Excel file
➢ Integrate simple and affordable TOC based
software
6. Monitor the implementation using KPIs (few) and
Buffer Management

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Summary

The message is for the TOC Practitioners:


1. There is no reason why not to use TOC if this is
what you want to do
2. Do your homework – understand the reality – the
problems, develop the logic of the solutions and
check the implementation
3. Use of TOC implicitly or explicitly – depending on
your relationships with the people around you
4. If Lean is active in your company – combine TOC
with Lean (TLS)

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