Gerry Kendall: Viable Vision – Bringing all of TOC together
The pdf of the material used in the webinar
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Feedback and discussion
Great Gerry, THANK-YOU!!!
Great thanks, Gerry
Many compliments to Gerry for this very interesting webinar! Keep it up with the great work!!
Thank you Gerry
Pedro Castro, Mexico:
It is a honor be part of this webinar. Thank you very much & Congratulations for your speech is great.My question is about If ToC is able to include complex tools as Demand Driven? Clarifying, sometime a big and principal constraint(depending of industry), the market demands some aggressive mix of production order, and the market day by day request for small and diversity orders. There are a tools called DDP Demand Drive Planning. I saw Lean techniques are required to support. To attain one of the foundations of Dr. Goldratt recommend pursuit to have lowest possible of inventory to increase business profits.
One of the pillars of TOC is “Inherent Simplicity”. In Eli’s words, “The more complex the problem, the simpler the solution must be or it will not work”. In my experiences, TOC has always made good use of tools and concepts, with excellent results, as long as the solution made life easier and simpler for the users and for management. I’ve implemented Viable Visions, for example, with manufacturers and distributors with a mix of standard production orders and custom product orders and non-standard orders (e.g., where quantities ordered exceeded more than 50% of stock). TOC with tools like “Demand Driven” have figured out ways to help average humans to do a great job in these complex environments. In fact, in my 25 years doing TOC, I’ve never had a client who fit easily into standard TOC paradigms. The challenge was always to find ways to simplify the solution.
About inventory, how do we ever know that we have the “lowest possible inventory”? We really can’t, because we are in a dynamic environment where demand, replenishment times and reliability of supply all change over time. So what TOC provides in this dynamic environment is a solution that automatically adjusts inventory targets according to the changes in these parameters. The software that I’ve worked with since 2004, from IDEALLC, called Elucidate, brings inherent simplicity into reality. It also manages and integrates all levels in the supply chain, allowing for a true, demand driven approach to managing inventory. I know there are other great tools in the market also using these TOC concepts and adding to them.
So the short answer to your question is, “Yes”!
Have you used the viable vision to help startups? Do you think it fits startups in early stages?
No. And No. Every Viable Vision has a marketing component, that starts with analyzing sales to existing markets. It relies on identifying a factor from actual sales and operations experience that allows the company to identify a way to gain a decisive competitive edge.
What Eli said about startups, and I agree wholeheartedly, is that they need to first find out if the markets they are planning to sell into have significant UDEs that their new products or services help overcome, better than the competition. The TOC Thinking Processes and analytics are excellent for this type of analysis.
How do you get to the right person at your target? The CEO and team? How do you get proper metrics in place early enough .. just before start of implementation?
When we started the Viable Vision marketing process, we ran seminars that Eli presented. Most attendees (at least at my seminar) were already well acquainted with TOC. My first 4 Viable Visions resulted from that. Since then, it’s been by word of mouth from clients, and from working with another ex-CEO of a public company who retired and went into consulting and brought me into his clients.
Regarding metrics, since I launch Viable Visions using a Strategy and Tactics tree with the top management team, I get the first metrics agreed to during the launch of the project. For manufacturing, it typically starts with Due Date Performance and Throughput. Every company already has standard P&L and Balance Sheet reporting. What I do is work with their financial people to get some basic Throughput Accounting statements in place. I also work with management to identify some leading indicators (I don’t call them metrics – just indicators) and get those going to help determine early if we’re on the right path. E.g., % of orders in red, green, black.
For projects, I’ve found that most companies I’ve worked with don’t have any formal reporting or statistics in place. Good software will tell you how many of your projects are red, green and give early warnings on projects in danger of being late. They will also show resource overloads and projected resource loads for projects that are planned but not yet active.
For distribution, total inventory and shortages are key metrics. Don’t be surprised if inventory initially goes up with new targets, since we are short of inventory in some locations for some SKUs. And it often takes longer to reduce excess inventory (because those items are often slow moving) than it does to order inventory to increase to target.
Do you have a process to evaluate the sales staff to understand if they are capable of doing solution selling?
I use roles plays during Sales Training and then go out in the field and debrief after every call. If I go out on 5-10 calls with the salespeople, I can easily tell which ones are capable. The best ones are the ones that already have a curiosity about how customers are using the products they sell in the customer’s environment and ask lots of questions. The worst ones read Powerpoint slides, ask few or no questions, and are spouting product features in the first 2 minutes of every call and don’t change their behaviors.
Does Viable vision concept apply if you are going to run a DEVOPS project?
I want to sress that Viable Vision is not about a single DEVOPs project. It is a strategy to achieve a major improvement in the bottom line through gaining a Decisive Competitive Edge in the market, typically by combining major improvements in operations / logistics / project management with a “Mafia Offer”. Every client I’ve worked with also develops and offers new products to the market. To the extent that they integrate the TOC CCPM approach to developing new products with the TOC approach to market research and overcoming UDEs with engineering approaches that make new products practical to produce, they are following (as I understand it) the principles of DEVOPS. In other words, I think that DEVOPS should not just be about development and operations, but also about marketing and sales. But I have no experience with DEVOPs so this is just from my very limited understanding. I have clients who use AGILE in projects and have gained great benefits by integrating the thinking with Critical Chain.
What’s the largest company or division you’ve executed this with? Do you think there is a practical limit to the size (and therefore limit to a division)?
The largest company I’ve worked with in Viable Vision is about half a billion (US $). No, I don’t see a practical limit. I prefer to work with companies in the $10-$100 million range but only as a personal preference.
For those who are listening, please know that Gerry is peddling a process that works. It does not work without real effort. It does not work without the correct sales team.
I had the pleasure of working with Jim Walker in one of the first Viable Vision efforts. I agree with Jim that you must have a solution sales team or the effort will not yield the desired results. I actually don’t “peddle” – except when I’m riding bicycles. I use the same TOC process to gain buy-in to Viable Vision (overcoming the Layers of Resistance to Change) that we have sales teams use in Viable Vision projects.
Gerry, Thanks, very enlightening presentation. In your experience, what are those few factors that “constrain” management teams to buying in to the VV Bumpy road in terms of their current understanding and way of analyzing any solutions? Once on board, what are those “must never forget” issues to assure or at least, that will significantly smooth the way. What do you think it will take that TOC Knowledge, but more important, the way to face problems, will stay in the Company, after the consultant is gone?
I started working in 1968. In almost 50 years of work, I’ve never seen a smooth road to improvement, with or without TOC or Viable Vision. Management teams have to be excited enough to want to overcome long standing conflicts – the ones that make it painful for them. This means they must believe that the aggressive financial goals alid out in a Viable Vision are feasible – not a dream. What gets them excited are two things:
- The insights into their company brought by the cause-effect analysis of the Viable Vision consultant.
- The road map that shows that even though the project may be 2-4 years long, they will see tangible results within the first 3-6 months. This is vital.
After that, what helps them buy in is gaining a deeper understanding into the solution components through some basic training to begin with. Every management team I’ve worked with has loved the simulators and exercises that I discussed in the webinar.
I have one other thought to share – don’t assume that any initial buy-in is enough to sustain the effort. Skepticism creeps in throughout the project and must be openly invited (for managers to share) and the consultant must be willing to discuss all concerns. This doesn’t prevent the bumps but it makes them easier to overcome.