Oded Cohen is a founding partner of AGI. He has worked with Dr. Eli Goldratt (author of Theory of Constrains (TOC)) for more than twenty years and has successfully implemented TOC ideas and systems in many companies, industries, and cultures. Oded has taken a role of assisting and building the necessary infrastructure to support TOC in various European and Asian countries. In addition to his TOC expertise in the areas of Production, Project Management, and Sales & Marketing, Oded has focused his efforts in the development of the Management Skills Workshop to address day-to-day problems as well as the use of TOC to overcome Resistance to Change.
Interview was taken by Serhiy Gvozdiov, professor of operation management, kmbs
Serhiy Gvozdiov: You must be the one who knows very well what is TOC. When we talk between each other who likes TOC there are many different points of view what is it in fact. What is your opinion: what is the Theory of Constrains?
Oded Cohen: There are many things because all over the years there have been evolution of the tools and the solutions. We started with the thinking process behind the logistical system with pretty advanced software for those. But for me it was obvious from the beginning that there is the type of structural thinking behind it. And systematic approach – this is what actually attract me.
Over the years as we progressed we came through challenges that asked us to further develop. So, we started with final scheduler, then, in the end of 70-th - beginning of 80-th we were driven by the thinking what is bottle neck. Then in 90-92-th came the first time with a real recession. And that was obvious that bottle necks just disappeared and suddenly we were thrown in the market constrains – overcapacity. Software that was based on the bottlenecks was pushing and pushing and increasing the number of answer to those problems that we wanted to solve – how to work in a market, where do exist many constrains. Then in 1993 we basically understood that we really have to go to big picture because we were really interested in process of what was going improvement. So we went to big project and started to see what is the next step after solving our production.
Then we started to develop thinking processes and in 1996 it was obvious that we need to have 3 legit approaches. We needed the education and software as well in order the companies went through this changes they had to go through. And that was quite a changed direction because then we started to focus on the thinking processes. It took us 10 years to develop the basic thinking processes with the analyses, all of the tools, developing the solution and the implementation plan.
So, coming back to your question – what is it. I think that the core is thinking processes – it is the recognition that we have the constraint and around that we have a way of how to manage a system through the constraint. I call it PIVOT. It is the TOC way of thinking and the TOC way of management. And the way of management is based on five steps of focusing, recognizing what is the constraint and importance of the constraint in the determining the performance of our system and in the way that we are managing it. So, in the core, the thinking processes, the 5 steps of focusing and different solutions, like for production, management, distribution, retails, projects and then, after the thinking process that allow us to develop our own solutions, we go to implementation.
S.G: TOC in Ukraine is rather young. I believe that there is the health future for growth of Ukrainian business using this technology. What are the pictures of other countries? Which country you consider is the most effectively using system analysis based o thinking processes on TOC?
O.C.: I don’t think that it is something that is touched to the countries even though there are some elements which are touched to the countries.
Let me answer in several steps. First of all, the TOC is the tool for the manager. When we look in when is it we have good results. I can say that there are three components which are important. One is that you have the solution. In the base I can have a match between the situation of the company and the TOC basic solution that I’m bringing to that. Then I look to next ingredient: the leader of this system. He has to have a strong desire to continue an improvement and to have the mindset of what every takes in order to improve the system. And the third ingredient is supporting culture. It is the culture that is driven to results that is working in good relationship with the leader. The three elements together are going us significant results.
There are places by which the supporting culture is very strong. I can see sometime like even “subcountries”. I remember the days that we worked in Bask Country. They are really driven for excellence. There are such regions in Columbia where is strong supportive culture.
India has such supportive culture too. First of al they admire education and learning. They keep on learning. They enjoy learning. And they have what I call “subordination by admiration”. They look at the head of the company and usually in industry there are families. You talk with the top-managers and they say that if my boss has decided to go the TOC way we will support it.
There are other countries, but it is another form of ownership. And my recent experience for last three years is in Japan. When they take something they learn it very deeply and they have different type of subordination. Again, it is very supportive subordination.
S.G.: Are any of success stories of implementation TOC that impressed you extremely great in recent time?
O.C.: For many years the big companies especially do not want to disclose that they are using the TOC. But when you look on the most of the companies and now Boeing is willing to say that, Intel, - then it helps the brand names, talking about it.
Then you have the other type of success stories, which are in the helth service, in the defense. I personally very much like the impact the TOC had on the helth service. I was personally involved with the first steps of TOC in the national heth service in the UK. So the impact that it did to the level of service of the emergency rooms and to the stay in the hospital, they improved also the level of the helth service. That was quite amazing to see.
I also was personally attach to the TOC fro the education and what they are doing with the kids is really amazing and it doesn’t really matter if we are talking about high school or elementary school, or the kids in the kindergartens. And this is across the world. This is nice to see.
It was interesting also to see what was achieved when TOC was brought to the government and civil service in Japan, critical chain was brought as the base for the infrastructure. This is very nice and creates not only an interest but also a practical work that is done there. I believe the once it is getting to the system, it will be there. What we know basically is that it is done to the individuals. So there are plenty of stories and simple search in the Internet will help to find more and more examples. And this is exactly what has to be searched, and know what companies themselves are saying about this, rather then teachers will say something about this.
S.G: One more question about Eli Goldratt’s vision to make Theory of Constrains the main way of managing companies. For some people it sounds willing to take a monopoly on a way of managing company. Could you explain what the meaning behind the words of Eli Goldratt is?
O.C.: I just have to say about my personal view. I think there is a room for working together. And while TOC is focusing on certain areas and there is a strength there. TOC on itself does not provide everything and then if you go together with some other approach you can get a pretty strong combination. So there is a room for the combination of the tools. All combinations basically of everything which will work. And at the end of the day we have a mission we want the company which wants to improve and then we will find the area which is weak, we will have to fight for all this. And definitely this can be done by TOC. And if there are other areas which are good let's go and implement it.
So you would expect and I believe that this is what is behind what Dr.Golratt is saying is that if we believe that every system has a constraint then in every system there is a room for some TOC in managing it.
The way that I am looking on it is that our success is only through the success of our students. So we have the CEOs, the top-managers who are taking the TOC, they have learnt it and they have implemented it. We want to see them successful, and if they used a little bit of what they learned from the TOC - GREAT!
15.05.08
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