Theory of Constraints — A Concise, Expert Management Briefing

Gain complete consensus on ... A realistic opportunity for major profit growth A direction to eliminate major performance problems The details of the solution An implementation plan

A Methodical Strategic Planning Process unlike any other

There are many elements that may go into a sensible strategy; the Theory of Constraints provides value to the process in a wide variety of ways.

As a starting point, the Unrefusable Offer — a methodical way to develop a competitive edge that enables you to win substantial new business almost on demand — means that downsizing simply never has a role in a company strategy. A strategy can be confidently set in a direction of increased sales.

The Unrefusable Offer typically calls for a company to change some elements of its performance in such a way that it solves serious problems for the customer, normally in a manner that boosts the customer's bottom line. The Theory of Constraints applications provide the perfect tactics to achieve such improved performance.

• The Production approach provides for a major lead time reduction with an assurance of excellent on-time delivery.
• The Distribution and Supply Chain solutions provide for excellent service levels to downstream customers, with less inventory required.
• The Project Management solution provides for shorter project durations — for example, new product introductions — with reliable on-time completions; plus the same resources can typically complete 100% or 200% more projects in the same time.

These applications provide the detailed tactics to achieve the performance levels needed to make the Unrefusable Offer a reality i.e. to provide the solid platform for the sales and profit growth.

The Thinking Processes provide the planning framework for the whole process.

For example, consider the final four days of a Theory of Constraints process known as the "4X4."

Day 1: The CEO and all lieutenants list every major performance problem in their area of responsibility. Two of the TOC Thinking processes are employed by the management group such that by the end of the day, a deep-rooted core problem has been uncovered that is contributing to almost every problem. More, every manager has developed the cause-effect PROOF that the core problem indeed contributes to their issues.

Day 2: The assumptions underlying the core problem are surfaced, challenged, and a direction found to invalidate them, using another of the Theory of Constraints Thinking Processes. This opens the door to the solution. During the remainder of the day the management team use yet another TOC Thinking Process to develop the cause-effect details of exactly what will have to be in place in their environment to achieve the reversal of the performance issues. They can do this knowing what is possible with the different Theory of Constraints applications; these applications open the doors to solutions to their customer's problems that were out of reach before. The solution is expanded to provide all the elements needed to achieve an Unrefusable Offer that will move their Net Profit from an 8-figure to a 9-figure range. Negative side-effects of the solution are predicted, and plans drawn to pre-empt them. By the close of the day there is a full consensus by everyone in the team that there is a plan to achieve the reversal of all their performance issues and achieve the Unrefusable Offer.

Day 3: Every major obstacle to the solution is raised; and a plan around, over or through the obstacle is developed. By the end of the day there is a complete roadmap of how to move from the current circumstances to the planned solution. And every manager knows their role and the role of their department. One of the strengths of the Theory of Constraints is that it turns the "negatives" of unwanted side effects and obstacles into positive and vital components of the plan. People who can see only the negatives of an idea, or only the obstacles, find they are not shut-out of the process or resented — their input is sought-after and valued.

Day 4: The roadmap is converted into a high-level implementation plan, with major tasks defined, resources allocated, time spans set.

Now they can execute ...

There are MANY other elements that can come into play; for example, many organizations benefit from a strategic element that protects demand in the face of market downturns, emerging competitors or technologies, etc. Theory of Constraints provides many of these elements; or else, provides a way to develop the element.