About this Presentation
TOC puts extreme importance on measurements as a major influencer on the behavior of people within systems. TOC points out that improper measurements can cause existing systems to perform below their potential. Yet TOC provides just directions for the new measurements. Many companies that implement TOC logistical solutions request more concrete answers to two major questions: One, what measurements should be used in order to motivate management and the workforce to act and behave in line with the company’s goal? Two, practically, how to ensure that there is enough budget to finance the actions that management is expected to take as per the TOC solutions. This master class deals with these two practical questions. First, we define Local Operational Indicators (LOI's) for the organization level of department or a function within the organization. These LOI's help to ensure that the local activity supports the good of the company. We will suggest potential LOI's and the way to numerically and visually use them. The second part of the class suggests the development and the use of money buffers for the TOC logistical solutions. The buffers of the logistical solutions provide early warning and prompt management to take corrective actions before it becomes too late and too costly. Yet, these actions usually demand additional expense. The money buffers provides the financial support and control of such actions. The application of money buffers is demonstrated for the different TOC logistical solutions.
What Will You Learn
To help you get the most value from this session, we’ve highlighted a few key points. These takeaways capture the main ideas and practical insights from the presentation, making it easier for you to review, reflect, and apply what you’ve learned.
This session tackles a common TOC gap: high-level measures like Throughput, Investment, and Operating Expense are essential, but they are often too broad to guide day-to-day action at the department level.
You’ll see how Local Operational Indicators can be built so frontline and middle managers act in ways that support system-wide performance instead of chasing disconnected local efficiency.
A key insight is that the best local indicators are not arbitrary KPIs. They can be derived from TOC logistical solutions, desired effects, necessary conditions for throughput, and recurring causes surfaced through buffer management.
The session also introduces Money Buffers as the financial companion to time and stock buffers, showing how organizations can fund recovery actions and manage execution disruptions without losing control of flow.
Instructor(s)
Oded Cohen
Oded Cohen is a leading expert and developer of TOC, starting with Dr. Goldratt from the very early years of then emerging TOC. Oded significantly contributed to developing TOC for Production, TOC Thinking Processes and TOC for Management. Oded has over 45 years of experience working with companies and individuals all over the world. He is the author of Ever Improve - a TOC concept and major book on TOC methodology and mechanics of solutions for Make to Order and Make to Availability, and one of the authors of the concept of the Decalogue, presented in the book called Deming and Goldratt. Oded was the TOCICO founder and the first Chairman, and is the Co-Founder and Co-President of TOC Practitioners Alliance – TOCPA.