Communication & Alignment Why No Major Initiative Should Be

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1 Synchronization, Communication & Alignment Why No Major Initiative Should Be Without t a Strategy & Tactic Tree Presented By: Lisa Scheinkopf, Goldratt Consulting Date: June,

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3 Up & Down Levels 3

4 Across Silos 4

5 This is a test. Please answer the following questions. Don t worry, you won t be sharing your answers with anybody else

6 Our Viable Vision Implementations Demanded A Solution Good people Hard working The TOC solutions have proven to work over many years What s missing? 6

7 In the words of Dr. Deming It would be better if everyone would work together as a system, with the aim for everybody to win W. Edwards d Deming 7

8 The Strategy t & Tactics Tree The TOC Thinking Process Application to Facilitate Whole- Company Ongoing g Improvement 8

9 Japanese Retailer "We started view all things different ways to see the real essences in business and personal life. More importantly, we are using 5 questions of S&T tree all the time to communicate up and down and across the organization. It amazingly works well. Initially it was really tough to think but once we get used to it, we are amazed how much faster we can drive all stake holders of the project holistically to the same direction. This is our valuable asset of our life" 9

10 Strategy & Tactics Tree Elements 1. What am I/are we responsible for accomplishing? (S) 2. Why is what I m responsible for really needed by the organization to improve vis-à-vis its goal? (NA) 3. What must I/we do to accomplish it? (T) 4. Why will this action/activity achieve it? (PA) 5. Why is accomplishing this at risk without providing another level of detail for my subordinates? (SA) 10 Strategy What for? Tactic How? Necessary Assumption Why? Parallel Assumption Why? Sufficiency i Assumption Why?

11 Consumer Goods S&T 1 Viable Vision Base Growth 2:1 Inventory Turns Comp. edge Strategy What for? Tactic How? Why? Why? Enhanced Growth 2:2 TPS Comp. edge Build Capitalize Sustain Build Capitalize 3:1 Aligning the supply chain 3:2 Inventory Turns Selling 3:3 Expand Client base 3:4 Capacity Elevation 3:5 Ensure High TPS 3:6 TPS Selling 3:7 TPS Enhancemen t 11

12 2:1 Necessary assumptions s Strategy Strategy What for? Inventory Turns Comp. Edge When most cash is tied up in inventory and availability is still an issue, improving inventory turns is a client s significant need. A decisive competitive edge is gained by providing a "partnership" that delivers superior inventory turns (better availability coupled with substantially reduced inventories), when all other parameters remain the same. Parallel assumption s Tactic Switching from a forecast driven mode of operation to a consumption driven mode of operation increases dramatically inventory turns (reduces shortages while reducing inventories). The Company develops the capabilities to successfully implement with enough clients a partnership that is based on supply according to consumption. Tactic How? Sufficient assumption s Building a decisive competitive edge is not easy; building the capabilities to capitalize on it is not less difficult. But, sustaining these two elements is the real challenge. 12

13 Consumer Goods S&T Base Growth 2:1 Inventory Turns Comp. edge 1 Viable Vision Build Capitalize Sustain 3:1 Aligning the supply chain 32 3:2 Inventory Turns Selling 33 3:3 Expand Client base 34 3:4 Capacity Elevation 4:11 Aligning production to actual demand 4:12 Replenishing to RDC s 4:13 Keeping correct inventory levels 4:14 Building initial inventories 5:13:1 5:13:2 5:13:3 Buffer management system Expediting 13 Adjusting to peak demand

14 Operational Performance (TDD) Before & After S&T Simultaneously * Sales Increased * Inventory Decreased Baseline TRD for Flats Indexe ed TRD

15 Operations All plants on DBR/BM Stockouts from 30% to <1% Capacity >2X Starting & Sticking with the S&T Actual 4 Months Results Sales Inventory Turns Offer accepted by all major distributors R&D DDP increased 20%-63% 2X rate of projects completion 15

16 WA Harmony, Peaceful, Sum and Japanese! WA Holistic Transformation (KAIKAKU) Management With thanks to Yuji Kishira 16

17 Emerging Application for S&T Mapping the Organization Chart Uncover & eliminate inherent system conflicts Corporation C Company P P Function VP VP VP Department M M M M M Team IC IC IC IC IC IC IC IC 17

18 S&T: Newest Addition to TOC TP Several Standard Templates are in the public domain Manufacturers; Projects; Retailers; Wholesalers; Distributors There are a growing number of S&T Experts in the TOC community Seek them out Put pressure for more More books, articles, presentations are on the way 18

19 Lisa Scheinkopf A Director of Goldratt Consulting and recognized worldwide as a leading Theory of Constraints (TOC) authority. Worked with Dr. Eliyahu Goldratt in developing e the TOC Thinking Processes and is the author of the definitive TOC reference, Thinking for a Change: Putting the TOC Thinking Processes to Use (St. Lucie Press, 1999). Published in a variety of industry and professional publications, and a long history of public speaking on TOC. Over 25 years management and consulting experience, past Board Member and Chairperson of TOCICO, and an MBA in International Management from the Thunderbird School of Global Management. 19 Thank You!