2015 TOCICO Conference - Final Thoughts

So, I've already written several posts about the learning that went on in Cape Town this past September (see here, here and here) and I guess it's time to move on. Still I want to leave you with a real taste for more and hopefully next time you'll come join us (see the TOCICO calendar for upcoming events near you). This review did not include my sessions and I will share some of that material separately in a future time. It's on my list.

For this final post I chose to review  2 sessions that I found had a high impact on me:

I have already mentioned Rami Goldratt's keynote on forecasting here. He talks about the fact forecasting capabilities in retail are not improving. In fact, they are deteriorating. It is becoming harder and harder to generate predictions that will create good enough forecasts so as to lead to the right decisions. No one is expecting a forecast system to be able to predict accurately what will shop X sell next Tuesday. But the fact of the matter is these forecasts fail at much simpler questions such as how much of product Y will be sold by the entire network over the entire season. This is a simpler question as it is an aggregation, allowing for mistakes to average out.

Rami presented 3 major forces that are eroding the ability for forecast:
1 - Customers are increasingly requiring products to create the exact fit for their needs and tastes. As a result manufacturers and retailers increase their variety. Think of toothpaste, just as an example. It used to be that you were either a Crest user or a Colgate (or another brand). Now each brand has an extensive range of options - different tastes, different usages and problem resolution and many of the possible combinations of these. As the variety grows the volume per SKU shrinks and with it the ability to predict. At the same time the customers learn to expect even more accurate fit and it is clear there is a feedback loop making the situation grow more and more extreme.

Gateway Supermarket Sardines' Section (from Wikipedia)

2 - Customer tolerance time is getting shorter, meaning retailers lose more sales when the exact inventory is not on hand. For example, in a market research Rami cited, people stated that they will pay a higher premium for immediacy that for technological improvement. As a result there is pressure to hold more inventory at the point of sales.
3 - The product life cycle is getting shorter. Customers are forever expecting new products and so there is a on going pressure on NPIs. New products do not have a history we can use for predictions and they have a major impact on the sales of current products (that have a high level of inventory in the shops from item#2) thus practically eliminating the ability to forecast.
On top of all this (as if that was not enough) more and more industries suffer from a product life cycle that is shorter than the supply time.
With all these phenomenas increasing over time, relying on forecasts will lead companies to fail. What we need is a system to minimize the time needed for reading and understanding the signals from the shop floor and to react to them fast. We have the needed IT, we are just using it the wrong way.
Just so you know, Rami promised a video covering all this in more detail - Rami, we are waiting.

The second talk was by Dr. Alan Barnard concentrating on flow. Re-reading Dr. Goldratt's "Standing on the Shoulders of Giants", Alan pointed out that the 5 Focusing Steps are actually an application and should only be used when the boundary conditions dim them relevant. Instead he suggest starting with the concept and principals of flow:

1 - The prime objective of operations is to focus on flow, specifically on reducing flow time.
2 - This objective is to be translated into a practical mechanism that guides operations when not to produce.
3 - Local efficiencies must be abolished.
4 - A focusing process to balance flow must be in place.

The application of these principals will be:
1- Separate work and time buffer.
2 - Aggregate time buffers.
3 - Remove unnecessary buffers
4 - Simplify flow with a single time buffer.
Looking over these lists it is clear that the 5 Focusing Steps, which are used for constraint or bottleneck management, are only relevant when those are the primary causes of blocks to the flow.

This is just the tip of the iceberg, of course. I highly recommend getting access to the conference videos for these sessions, if you weren't there.

If you enjoyed this and want to learn more - share it and subscribe to this blog, great things are coming.

Thinking Backwards - The 2016 Odyssey Program Exercise

So, if you remember my last post I suggested we need to prepare our mental muscles for the hard labour of TP and one of the exercises I suggested was thinking backwards. Now, this is not the TP's transition tree, which is also constructed backwards. It is also not the usual managerial focus of let's plan with the end in mind, which usually ends up being a forward construciton exercise. It's a free formed process that starts at the end and moves forward by imagining a probable route.

Here I will share the results of my recent use of this process. I have volunteered to make the 2016 TOC Odyssey happen. It will be in Jaffa during the first weeks of April, 2016 (Save the dates - April 3-7 for the Freshman session, April 10-13 for the Alumni, dates are currently estimates). It is my wish to make this session a big success - fun, enriching and enlightning for everyone. To make this happen I am starting out with thinking backwards (as suggested in Purple Curve Effect by Jeff Kinsey - see my book review here) to see what I can learn from it,

First of - my goal, the end result:

Can I imagine how reaching this goal would feel? yes, I can, right down to that pleased-embarrased feeling as everybody claps. This is a big issue, a lot of times I start this exercise and realise I have no clue what the end result looks and feels like. Just try this out right now - is there a change you would like to do in your life? lose some weight? go to bed earlier? spend more time with someone? learn something? OK, that's great. Now - can you imagine vividly, in your mind's eyes, the end point scene? what will you wear, say, feel, do?

So, I can see this goal coming to life. Great! Now what? Well, what could have or should have happened before that to make it possible? What was the step before the goal? Here is my answer:

Can I imagine achieving this milestone? again I can, I can even hear Alan Barnard's distinct accent as he tells me how much he enjoyed leading the session. Great! Now ask again - How did that happpen? What could have happened before that? Basically we are looking for possible causes to create the wanted effect.

And so I get on a backward roll:

All graphics were done using Flying Logic

So far, so good. This is where I got a bit sidetracked, as this is the stage where several predessessors converge. It is also where I move from reaping the future results to defining the work that needs to be done in order to make it happen. So this exercise seems to have been quite un-productive so far, doesn't it? Well, that's not true. This part has made it clear that this is a very just cause, quite worthy of my investment. Now I am really motivated to make the 2016 Odyssey one to be remembered! 

Next step - to take the next leg of down the future memory lane - what did I do to make it happen? Check out what happened here!

2015 TOCICO International Conference - Cape Town

I've just returned from Cape Town a week ago and I think it's a great time to share some of my conference highlights with those who could not make it this year.

Some Conference Participants (can you spot me?)

First off - join me in sending love and support to Marcia Hutchinson, TOCICO's General Manager, who broke her arm on the first night and needed an operation. Marcia's proffesional management was totally aparent in the fact the conference went on without any interference, leaving her free to take care of herself. GET WELL SOON, MARCIA!

The first day was a full day of keynote speakers interlacing academics and practitioners  and introducing the conference's main thread of the Anti-Fragile vision. Some success stories brought to light the amazing effects TOC can have on a business and how important it is to ensure the process is maintained over time and management switch-overs.

Keynote Speaker

I especially liked Rami Goldratt's session about the forces eroding our ability to generate forcasts, especially in a retail environment. He makes a valid point - yes, forecasts are inherntly wrong but they should be getting closed and closer to being right. After all, they are based on past experiance, of which we have more and more data points with each day passing, on computing abilities, which grow bigger and faster with each day passing and on algorithms, that should improve over time and experiance. Look at the weather forcast as an example. Over the years it has gotten better, to the point that we trust the 10-day forcast as a good enough directive for packing before a trip. Sure, we do not expect it to be right on the money, just in the vicinity. Shouldn't the forcasts for sales numbers and for purchasing be doing the same? Well, they don't and Rami gave a very clear explenation why. He also promissed to put together a YouTube vid covering his explenation, so keep a look out.

With all the interesting take aways I've had, it seems a series of posts is in order, so be on the look out for my future posts on the subject. (Here is the first one)

Here is a sneak peak:

My presentation about buffering life

So, have a look at the conference schedule, and let me know what is of interest to you.