TOC Thinkers

John Ricketts - TOC Handbook chapter

Podcast, interview: http://clarkeching.libsyn.com/john-ricketts-toc-handbook-chapter

Do you want a FREE copy of "Reaching the Goal - How Managers Improve a Services Business Using Goldratt's Theory of Constraints"

I have one review copy of John Rickett's new Theory of Constraints book "Reaching the Goal" to give away, compliments of the publishers.

Congratulations to Grant Boston, who won the book. 

Here's my quick review:    

TOC has an outstanding record in manufacturing and here Rickett's has cleverly adopted the TOC applications and thinking to suit service industries. I know TOC well, I work in the services industry, and I've learned a lot from reading it.  It is not (imho) an easy book for TOC newbies.  I'd have liked a few more concrete examples - my mind works that way, and I hope John will add those in the 2nd edition.  It's a very good book - I suspect in a year or so once the ideas have sunk in and I've tried them - that I'll be describing it as a classic.

 

If you'd like a free copy ... then leave a brief comment below and on Tuesday morning (GMT) I'll pick the winner (randomly ).  If you are the lucky winner then I'll contact you for your details and then I'll ask the publishers to post the copy out. 

 

[I published a series of questions & answers with John about his book, here]

John Ricketts - the book

You can read more about John Ricketts' new book Reaching The Goal: How Managers Improve a Services Business Using Goldratt's Theory of Constraints on amazon.com.  You can even browse through sections of the book using the search inside feature.

The book is about to ship.  I'll have a few more questions for John once my copy has arrived.

John Ricketts - Services and TOC

Q5: What would you say is the most significant difference seasoned practitioners would need to take into account when working in services?

A5: You ask an important question, because services comprise the majority of developed economies, and services are the fastest-growing segment in developing economies. But the answer to your question depends on whether we’re talking about TOC practitioners or services practitioners, which still tend to be different groups. The good news for TOC practitioners is familiar TOC principles do apply in services. The better news is traditional TOC applications work just fine in services that resemble factories and warehouses, such as fast food, pharmacies, dry cleaners, and lawn care. The best news, however, is TOC applications can be adapted to work even in services that do not resemble factories or warehouses, such as Professional, Scientific, and Technical Services.  TOC practitioners need to understand the unique challenges that service providers face in order to appreciate why the adaptations are necessary. And TOC practitioners will notice some new concepts for services enterprises, such as a third class of constraints that is neither internal nor external. On the other hand, services practitioners will find that TOC for Services provides fundamentally different ways to think about services. For instance, the notion that there may be just one constraint that governs what an entire enterprise can produce is as alien in services today as it was in manufacturing and distribution twenty-five years ago. For many services practitioners, however, the biggest hurdle to overcome is the misconception that optimizing every individual part of an enterprise automatically optimizes the enterprise as a whole. It doesn’t. Reaching the Goal addresses this and many other core problems that services practitioners face every day.

John Ricketts - on the Thinking Processes in Services

Q4: I notice as I've browsed through your book that you mention conflicts in many places, but I didn't see any clouds. Do you use the Thinking Process? If so did you consciously decide to not show the tools in the book? (Two things about this question: 1) I'm searching inside on Amazon so I may have just not seen any TP tools, and 2) I'm not being critical of you not using the TP tools.)

A4: I’ve often wondered how much readers can glean from Search Inside, and your question indicates that the answer is “quite a bit.” Both of your impressions are correct: Conflict resolution is one of the recurring themes throughout the book, but there are no clouds. For the benefit of readers new to TOC, “evaporating clouds” (also known as Conflict Resolution Diagrams) are a specific way to illustrate conflicts and their resolution. Thinking Process (TP) tools include clouds as well as several other diagrams. Though we did use TP tools, I decided not to show them in the book for several reasons. First, it would have made the book much longer because the target audience includes readers new to TOC, and they wouldn’t comprehend the tools without an explanation. Second, large services businesses are incredibly complicated, so the actual diagrams were too unwieldy to make good illustrations. Finally, unlike TOC applications, which had to be adapted for services, the TP tools work fine as they are. On the other hand, we had to push the TP tools farther than is typical in order to make the applications work in services.  For example, Multi-Project Critical Chain (MPCC) staggers project schedules around availability of the strategic resource, yet in a services business with diverse projects it’s fairly common to have multiple cross-project resource constraints simultaneously. Likewise, both Drum-Buffer-Rope (DBR) and Replenishment manage inventory, but there is no inventory per se in a pure services business. Therefore, we had to push the TP tools pretty hard in order to adapt TOC applications to work in se

John Ricketts - on TOC in Marketing and Sales

Q3: Chapter 8 is devoted to using TOC in Marketing and Sales. This is something that fascinates me.  Could you tell me a little more?  Do you use the approaches that Eli Goldratt describes or something different?  Could you give an example?

A3: Keep in mind that my book is about TOC for Services, so the chapter you mention covers marketing and sales in a services context. The TOC principles are the same as what you see in manufacturing and distribution, but because the context is different, there are differences in how those principles are applied. For example, traditional TOC doesn’t use standard product prices because they distort the real contribution each product makes to profit. TOC for Services doesn’t use standard service prices for the precisely the same reason. However, unlike consumers of products, who are often satisfied with a product off the shelf; consumers of services far more often expect their service to be customized. There’s a good reason the barber asks how you want your haircut. Indeed, many contracts in Professional, Scientific, and Technical Services are unique to some degree because no two clients have exactly the same requirements. Of course, those differences affect pricing, segmentation, and business value, which are all integral to effective marketing and sales. Indeed, some services deals that look profitable when based on standard prices, actually turn out to be unprofitable when examined with TOC. Fortunately, TOC can also find highly profitable services deals that look unprofitable when viewed conventionally. Thus, anyone familiar with the traditional TOC approach to marketing and sales will recognize the principles covered in this chapter, but some of the implications will come as a surprise, especially to service providers who currently rely on standard prices.

Q & A with John Ricketts - author of Reaching The Goal.

I'm looking forward to reading the new TOC book by John Ricketts.  It's called "Reaching The Goal: How Managers Improve a Services Business Using Goldratt's Theory of Constraints".  I would have written that last sentence more elegantly if I'd known how to do a possessive apostrophe when someone's name ends in "s", btw. 

The book won't be released for a few more weeks but you can search inside at Amazon.

In the meantime, John has kindly agreed to answer a few questions about himself and the book. 

Here're the first two questions with more to follow:

Q1: What is your TOC background?

A1: I'm a "Jonah." For the benefit of people new to Theory of Constraints, Jonah is a former professor and consultant in the original TOC novel, The Goal, who teaches the central character, a factory manager, how to solve what appear to be unsolvable problems. As a practical matter, being a Jonah means I've completed TOC training and actively practice it. My involvement with TOC has taken me beyond its usual boundaries, however. I started my career in manufacturing, moved into information technology, and have been in the services field for a long time. So my career has taken me progressively away from the roots of TOC. As anyone who’s tried to apply TOC to services quickly discovers, however, the less a services business is like an industrial firm, the harder the traditional TOC applications are to apply. I was program manager for the introduction of TOC into IBM Global Services, and I remember vividly that it was impossible to make traditional TOC applications work on certain services problems. For instance, TOC does a terrific job of managing inventory in manufacturing and distribution businesses, but in a pure services business, there is no inventory. You can’t buy a haircut off the shelf. Thus, making TOC work in services requires more than a little innovation.

Q2: Can you tell us a little about your new book? Why were you inspired to write it? What's new about it compared to the existing literature? Who'll benefit from reading it?

A2: Reaching the Goal explains how we adapted TOC applications to work in Professional, Scientific, and Technical Services, which is the services sector least like manufacturing and distribution. Of course, it also happens to be the sector where IBM Global Services would be located if it were an independent entity. Fortunately, a lot of what we discovered can be applied in other services sectors. And many product-based businesses are offering services around their products, so interest in services innovations extends beyond just services sectors. Compared to the existing TOC literature, which generally stays pretty close to its roots, this book is almost entirely devoted to TOC for services. I say “almost” because the first section reviews the fundamentals of traditional TOC as well as services. Thus, readers should be able to pick up this book even if they’ve never read anything about TOC or services before. On the other hand, even readers already familiar with TOC or services will find brand new material in the middle section, which covers management of resources, projects, processes, finances, marketing, and sales. The last section covers strategy, change, implementation, and technology for services from a TOC perspective. And there are endnotes throughout so readers can find their way into the existing TOC literature. In other words, anyone wrestling with management challenges will probably find something in this book that makes them go, “Hmmm.”