9 - Jelena Fedurko_23 TOCPA_USA_21-22 March 2016_ENG_fin_20 March 2016

23rd International Conference of the TOC Practitioners Alliance - TOCPA www.tocpractice.com

21-22 March, 2016, Tennessee, USA

Practical Issues of Constructing Strategy & Tactic Trees Jelena Fedurko TOC Strategic Solutions, Estonia 21 March, 2016

Jelena Fedurko Jelena Fedurko is a Co-Founder and Co-President of TOC Practitioners Alliance TOCPA and International Director of TOC Strategic Solutions. Jelena has been involved in TOC since 1999. She is a TOC expert, trainer and consultant, and provides TOC implementation support in production, supply chain and project management. Jelena has worked in various countries all over the world, including Japan, Poland, Germany, Switzerland, Turkey, Italy, Russia, Ukraine, India, China, Chile, Colombia, Mexico. Jelena is the author of four advances books on TOC Thinking Processes: Behind the Cloud (2011), Through Clouds to Solutions (2013), Typical mistakes in working with TOC Logical Tools (2014), A Good Strategy & Tactic Tree (2016). Together with Oded Cohen Jelena has co-authored the book Theory of [email protected] Constraints Fundamentals (2012). She has contributed to a number of books on TOC, and has many www.tocexpert.com publications. Jelena translated and edited several www.toc-strategicsolutions.com major TOC books. www.tocpractice.com www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Major reasons for difficulties while constructing an S&T Tree

• The WRONG PERCEPTION that the S&T Tree is a tool to FIND a solution, or that a solution will somehow ‘emerge’ itself in the process of adding boxes to an S&T Tree. • The CONFUSION about what to put in each of the FIVE DIFFERENT ENTITIES in each S&T box. • The CONFUSION about the VERTICAL RELATIONSHIP BETWEEN THE BOXES that results in the tendency to mechanically copy tactics from the ‘parent’ box into its ‘children’ boxes on the lower level. www.tocpractice.com


Frequent questions while constructing and populating an S&T Tree

• How do I know what exactly I should write in each of the 5 entities in an S&T box? • How can I be sure that what I wrote in each of the entity types is actually this type of entity? • How do Strategies and Tactics in boxes on different levels relate between themselves?

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The four areas of constructing an S&T Tree

• The S&T structure • The vertical relationship between the S&T boxes • The relationship between the entities within the same box • The content of the entities in the S&T boxes For managers who want to construct their own S&T Tree, each area has its challenges and difficulties. www.tocpractice.com


The S&T structure Strategies on the lower level are Necessary Conditions and inputs for the Tactic on the upper level

Strategy Tactic Necessary Condition

Necessary Conditions

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S T S S S S T T Т Т

S T

Necessary Condition

S S S Т Т Т

Necessary Conditions


The S&T structure Strategy specifies WHAT WE WANT TO ACHIEVE in this box to enable implementation of the ‘parent’ box on the higher level. The deliverable of the Strategy is the result of implementing the Tactics in this box. Tactic specifies HOW to achieve the tangible deliverable recorded in Strategy – what actions the company will take. Tactic is something that we CAN DO - it is in our area of authority and we can take active and tangible actions in this area. Strategies on the lower level are Necessary Conditions and inputs for the Tactic on the upper level www.tocpractice.com

3.1

Strategy Tactic 4.11

Strategy Tactic

4.12

Strategy Tactic

1

Strategy Tactic

2.1

Strategy Tactic 3.2


Strategy Tactic

2.2

Strategy Tactic 3.3


Strategy Tactic


Vertical relationship between the S&T boxes Consumer Goods S&T: Strategies on the lower level are Necessary Conditions and inputs for the Tactic on the upper level

Tactic 1 The company capitalizes on the decisive competitive edge on big enough markets without exhausting the Company's resources and without taking real risks.

Strategy 2.1 A decisive competitive edge is gained by providing a "partnership" that delivers superior inventory turns (better availability coupled with substantially reduced inventories), when all other parameters remain the same. www.tocpractice.com

Strategy 2.2 A decisive competitive edge is gained by providing a partnership that secures the clients an increase in TPS and provides a realistic chance of sharing in a much higher increase.


Vertical relationship between the S&T boxes Consumer Goods S&T: Strategies on the lower level are Necessary Conditions and inputs for the Tactic on the upper level

Tactic 3. 1 The company implements the Make-To-Availability (MTA) mode of operations (implements the appropriate version of S-DBR and pull distribution and maintains appropriate inventories in the warehouses).

Strategy 4.11

Strategy 4.12

Strategy 4.13

Strategy 4.14

The Company holds, in its Plant Warehouse(s) (CDC), relatively small amounts of inventories which are appropriate to service the “partnerships.”

RDCs hold relatively small amounts of inventories which are appropriate to provide superior service.

The target levels of inventories held at the various locations are continuously monitored and when needed are suitably modified.

Better flow is regarded by production as the most important element, under their control, to improve availability.

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Building the top-down cascade: Vertical relationship between the S&T boxes: The Strategies on the lower level are the Necessary Conditions and inputs for the Tactic on the upper level

1

HOW do we want to achieve Strategy 1 – through which specific actions? What do we need in order to be able to implement Tactic 1? 2.1 Strategy HOW do we want to achieve Tactic Strategy 2.1 – through which specific actions? What do we need in order to be able to 3.1 implement Tactic 2.1? Strategy HOW do we want to Tactic achieve Strategy 3.1 – through which specific actions? What do we need in order to be able to 4.11 implement Tactic 3.1? Strategy HOW do we want to Tactic achieve Strategy 4.11– through which specific actions? www.tocpractice.com

The chosen Tactic determines the content of the S&T Tree.

Strategy Tactic

What do we want to achieve?

4.12

2.2

Strategy Tactic 3.3

3.2

Strategy Tactic

Strategy Tactic

Strategy Tactic

4.13

Strategy Tactic

4.14

Strategy Tactic


Building the top-down cascade – an example What do we want to achieve? HOW do we want to achieve Strategy 1 – through which specific actions?

There are several available options for the Tactic:

1 Strategy: I have eaten an omelet for breakfast Tactic: I will cook an omelet

• I will cook an omelet myself • I will ask the family member to cook an omelet for me • I will go to a diner or hotel restaurant and order an omelet for breakfast • I will order an omelet from Room Service

The chosen Tactic will determine the content of this S&T Tree. www.tocpractice.com


Building the top-down cascade – an example

What do we need in order to be able to implement the Tactic in Level 1? What do I need in order to cook an omelet? • Eggs • Other ingredients: omelet fillings, salt, pepper, cooking oil • Equipment for cooking: a mixing bowl, a mixer, a frying pan, a cooker • Knowledge of how to cook an omelet

1 Strategy: I have eaten an omelet for breakfast Tactic: I will cook an omelet Example

These four elements are the NECESSARY CONDITIONS AND INPUTS for “cooking an omelet” and need to be created to enable me to implement the Tactic on Level 1 “I will cook an omelet.” www.tocpractice.com


Building the top-down cascade: 1. Defining Strategies for the Tactic on the upper level

1 Strategy: I have eaten an omelet for breakfast

Example

Tactic: I will cook an omelet

Strategy 2.1 I have eggs

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Strategy 2.2 I have all necessary ingredients for an omelet

Strategy 2.3

Strategy 2.4

I have the necessary equipment

I have the necessary knowledge


Building the top-down cascade: 2. Defining the Tactic on the same level HOW do we want to achieve Strategy 2.1 – through which specific actions? Options for the Tactic in 2.1: 1. I buy eggs 2. I collect eggs from my free range chickens

Strategy 2.1 I have eggs

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Example



Strategy 2.3

Strategy 2.4




Building the top-down cascade: 2. Defining the Tactic on the same level HOW do we want to achieve Strategy 2.1 – through which specific actions? Options for the Tactic in 2.1: 1. I buy eggs 2. I collect eggs from my free range chickens

Strategy 2.1 I have eggs I collect eggs from my free range chickens www.tocpractice.com


Example



Strategy 2.3

Strategy 2.4




Further developing the S&T cascade into the full vertical branch After having developed the skeleton 1 for one vertical branch, we may Strategy develop full boxes on this branch. Tactic To complete the tree, I recommend 2.1 2.2 filling in the boxes Strategy Strategy from left to right, Tactic Tactic from bottom to top. 3.1

3.2


Strategy Tactic www.tocpractice.com

3.3


Strategy Tactic


Strategy Tactic

4.14

Strategy Tactic


Further developing the S&T cascade into the full vertical branch – from bottom to top, left to right

2.1

Strategy Tactic 3.1


Strategy Tactic www.tocpractice.com

4.12

Strategy Tactic

4.13

Strategy Tactic

4.14

Strategy Tactic


Further developing the S&T cascade into the full vertical branch – from bottom to top, left to right 3.1

NA Strategy PA Tactic SA 4.11

4.12

4.13

4.14

NA Strategy

NA Strategy

NA Strategy

NA Strategy

PA Tactic SA

PA Tactic SA

PA Tactic SA

PA Tactic SA

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While filling in the boxes – keep in mind the content of the entity and its logical relationship with other entities Necessary Assump.(NA) Strategy

Parallel Assump.(PA) Tactic Sufficiency Assump.(SA) www.tocpractice.com

Why this box is a necessary condition to achieve the “parent” box and why we will spend managerial effort and time to deal with this area. WHAT WE WANT TO ACHIEVE in this box to enable implementation of the box on the higher level. The deliverable of the Strategy is the result of implementing the Tactics in this box. Why we claim that the strategy is possible at all – a justification. How we will achieve the strategy – actions. What we should not overlook. 23rd International Conference of the TOC Practitioners Alliance - TOCPA

Necessary Assumptions (NA) The content of the NA statements incudes: • a significant need of the company’s market • something negative in the company’s current reality • a threat to the company’s future reality that may result from incomplete implementation of the solution • something in the current reality that is not negative yet, but if not addressed now, may bring negative in the future.

The logical relationship between the Necessary Assumptions, the title of the box and the Strategy: Because of [NA], we find it necessary and worthwhile putting the managerial effort and time in [the title/area of the box], and as the result of our effort we want to achieve [Strategy]. www.tocpractice.com


Strategy The content of the Strategy statements incudes: • achieving a significantly higher target level (specific or nonspecific) of a measurement that company knows and already uses; • a new measurement as a part of the new solution; • any other tangible deliverable of the Tactics in this box.

The logical relationship between the Strategy, the title of the box and the Necessary Assumptions: Because of [NA], we find it necessary and worthwhile putting the managerial effort and time in [the title/area of this box], and as the result of our effort we want to achieve [Strategy].

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Parallel Assumptions (PA) The content of the PA statements incudes: • there is knowledge and experience that prove that the desired Strategy can be achieved through the actions in Tactics; • there is something in the company’s reality that plays in favor of the strategy and can be used in the actions in Tactic. This may be the result of previous steps in implementation of the solution; an obvious fact, or a general principle, playing in favor of the strategy.

The logical relationship between the Tactic, Strategy and Parallel Assumptions: In order to achieve [Strategy], we must implement [Tactic], BECAUSE [Parallel Assumptions]. www.tocpractice.com


Tactic The content in the Tactic entity speaks about •

a mechanism or

•

logistical performance level that will be built

that the company did not have before.

The logical relationship between the Tactic and the Strategy: In order to achieve [Strategy] we must implement [Tactic].

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Sufficiency Assumptions (SA) The content of the SA entity: • defines or clarifies an important element in the Tactic; • give a warning about a challenge in sustaining the outcome of Strategy and Tactics; • reminds about a condition that must be achieved in order to ensure successful implementation of the Tactic; • identifies the area in Tactic that, if overlooked or not addressed, will undermine the implementation of the Tactic; • pre-empts reservations regarding obstacles in implementing Tactics. The logical relationship between the Tactic and the SA: In order to implement [Tactic], we must not overlook the fact that [Sufficiency Assumption]. www.tocpractice.com


Where from we take the “raw material” for the S&T Tree • The UDEs and the assumptions from the UDE Clouds will be reflected in Necessary Assumptions. • The direction of the solution will be recorded in Strategies on the upper levels. • The Injections and Intermediate Objectives will be recorded mostly in Tactics, and also in Strategies on the lower levels. • The Desired Effects will be reflected in Strategies. • The Negative Branches will be reflected in Sufficiency Assumptions. • The assumptions between an Injection and B and C of an UDE Cloud will be recorded in Parallel Assumptions. In the course of constructing an S&T Tree, there will be other elements developed – that do not originate from the work with the UDE Clouds. www.tocpractice.com


Where from we take the “raw material” for the S&T Tree

1 List of UDEs UDE1: xxxxxxxxx UDE2: xxxxxxxxx UDE3: xxxxxxxxx UDE4: xxxxxxxxx UDE5: xxxxxxxxx UDE6: xxxxxxxxx

UDE

3

B

D

C

D’

A

B

D

C

D’

B

D

C

D’

UDE UDE

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C

D’

A

6

UDE ХХ

?

UDE UDE

D

4

5 UDE

B A

A

2 UDE Map UDE

UDE

UDE

A

B

D

C

D’

A

UDE ХХ

B

D

C

D’ A

A

B

D

C

D’

B

D

C

D’


Where from we take the “raw material” for the S&T Tree

7

8 Assump

Challeng

B

Inject

B

D A

A C

D’

Inj C

9 Possible negative outcome

Neutral

+

Injection

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A detailed guide on constructing an S&T Tree

A new book published in March 2016 • • • •

Rules Examples Detailed analysis Exercises with answers

If you have questions – write to [email protected] www.tocpractice.com


9 - Jelena Fedurko_23 TOCPA_USA_21-22 March 2016_ENG_fin_20 March 2016

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