The Theory of Constraints
Fundamental Exam Review
Overview the TOCICO Exams
James R. Holt, Ph.D., PE
Professor
Engineering Management
© Washington State University-2010
[email protected]
http://www.engrmgt.wsu.edu/
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TOCICO
• The Theory of Constraints International
Certification Organization www.TOCICO.org
• Certifies TOC Knowledge at
 Fundamental Knowledge (Basic understanding of
TOC as it applies to ALL applications. Can Pass
in Segments as your TOC knowledge grows.)
 Application Level (Advanced understanding
sufficient to apply and teach others)
 Implementer Level (Highest Certification –
Individual has proof of successful
Implementations).
© Washington State University-2010
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TOCICO Certification Areas
• The Theory of Constraints International
Certification Organization
 Fundamentals
 Application areas
• Supply Chain Logistics
• Project Management
• Finance and Measures
• Thinking Processes
• TOC in Education
• Holistic Business Strategy
© Washington State University-2010
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TOCICO Segmented Fundamentals Exam
Fundamentals Certificate
Multiple Choice Case Study
(Identify, Exploit, Subordinate, Elevate, Go to Step 1)
Fundamentals
Certificate of
TOC Philosophy
Fundamentals
Certificate of
TOC Thinking
Fundamentals
Certificate of
Fundamentals
Certificate of
TOC Applications
TOC Finance &
Measures
Processes
•Inherent Potential
•Inherent
Simplicity
•Inherent Win-Win
•Five Focusing
Steps
•Three Questions
•Conflict
Cloud
•Negative
Branch
•Ambitious
Target
•DBR
•Project
Management
•T, I, OE
•PQ Type
Problem
•Replenishment
© Washington State University-2010
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TOCICO Certification Exams
Certification Steps
1.
Fundamental Exams
TOC Philosophy
Thinking Process
TOC Measures
Applications (one of):
Drum-Buffer-Rope
Project Management
Distribution
F
U
N
D
A
M
E
N
T
A
L
2,
Applications Exams
3.
Implementation Cases
Supply Chain Logistics
Supply Chain Logistics
Project Management
Project Management
Finance and Measures
Finance and Measures
Thinking Process
Thinking Process
Business Strategy
E
X
A
M
Fast Track Certification Process
for TOC Experts
Validated Application Case
Exams Available
Worldwide On Demand (FE Soon On-Line)
© Washington State University-2010
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TOCICO Application Exams
• Applications Level Exams
 Supply Chain Logistics
 Project Management
 Finance and Measures
 Thinking Process
 TOC in Education
• Implementation Level Case Submissions
 Complete (beginning to end) documentation of
implemented case (with verification)
© Washington State University-2010
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TOC Improvement Approach
1.
2.
3.
4.
5.
Improve the Flow in Operations (and Service
Areas):
Build a Decisive Competitive Edge
Capitalize on the Competitive Edge
Elevate Capacity only when needed
Institutionalize the Process
 When Formal Organization becomes the
Informal
 Remove Engines of Disharmony
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Flow Focus for Applications
Exams
Application Exam
Plan
Establish Establish
Release Buffer(s)
Control
Step 1
Execute
Single
Priority
System
Improve
Active Applied POOGI
Buffer Buffer Processes
Mgmt Analysis
Step 2
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Step 3
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Fundamentals Exam
• Includes Key Topics about:
 Theory of Constraints Philosophy
 TOC Thinking Process Basics
 TOC Applications (at least one area)
• Operations (Drum-Buffer-Rope)
• Project Management (CCPM)
• Distribution (Replenishment)
 TOC Finance and Measures
 TOC Business Strategy (Holistic View)
• These sub topics with study and practice prepare
for the Fundamentals Exam Certification
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Topics in TOC Philosophy
•
•
•
•
•
•
•
•
•
•
Concept of the Weak Link in the Chain
Five Focusing Steps
All conflicts have a solution
Solutions are often counter intuitive
Systems are simple
There is a Core Problem
People are good
Everything is harmonious
Every one can improve
Growth and Stability can both be achieved at
the same time (Ever flourishing)
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Topics in TOC Thinking Process
•
•
•
•
•
•
•
Cause and Effect
Evaporating Cloud
Surfacing Assumptions
Invalidating Assumptions
Negative Branch Reservation
Overcoming Obstacles (PRT)
Categories of Legitimate Reservation
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Topics in TOC Operations
•
•
•
•
•
Locating Capacity Constrained Resource
Sizing Buffer (50% of existing to start)
Rope Control (release)
Buffer Management
Simplified- DBR (finished goods buffers
controlling release)
•
Make to Order
•
Make to Stock
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Topics in TOC Projects
•
•
•
•
•
Plan the Network (PRT)
Aggressive Schedule (50% durations)
Strategic Buffers (50% PB & FB)
Daily Reporting
(Time Remaining? What are you awaiting?
How can we help you?)
•
Fever Chart Concept
•
Buffer Management
•
Choke and Release
•
Sequencing mechanism
•
Resource alignment
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Topics in TOC Replenishment
•
•
•
Know components of Replenishment time
Understand Plant Warehouse
Understand Inventory Capacities of Plant
Warehouse and Regional Warehouses
•
Daily Reporting of Sales
•
Frequent Delivery
•
Buffer Management Actions
•
Beneficial Impact of Distribution Solution on
the Plant
© Washington State University-2010
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Topics in TOC Finance & Measures
•
•
•
•
•
•
•
•
•
Purpose of Finance (invest in improvements)
Purpose of Measures (keep everyone focusing on the
constraint and subordination)
Decide on Investment decision (make/buy, equipment
purchase)
Impact of poor quality/delivery on system
Impact of poor inventory practices on the system
Financial Buffer Management
T, I, OE, Cash Flow, Profit, Return on
Inventory/Investment
TDD, IDD
Throughput Accounting worksheet
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Topics in TOC Business Strategy
• Selecting the Core Problem of the Business
• Determining the Direction for the competitive
advantage
• Deciding how to control the release
• Establishing correct buffers
• Determining the single priority system
• Active Buffer Management
• Analytical Buffer Analysis
• POOGI (planned growth and stability of operations
and management)
© Washington State University-2010
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