The Theory of Constraints

Fundamental Exam Review

Overview the TOCICO Exams

James R. Holt, Ph.D., PE

Professor jholt@wsu.edu
Engineering Management http://www.engrmgt.wsu.edu/
Washington State University-2010 1
 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 2
 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 3

TOCICO Segmented Fundamentals Exam

Fundamentals Certificate

Multiple Choice Case Study

(Identify, Exploit, Subordinate, Elevate, Go to Step 1)

Fundamentals Fundament Fundamentals Fundamentals

Certificate of als Certificate of Certificate of
TOC Certificate TOC TOC Finance
Philosophy of Applications & Measures
TOC
Thinking
Inherent Processes
Conflict T, I, OE
Potential Cloud DBR
Inherent PQ Type
Simplicity Negative Project Problem
Inherent Win- Branch Management
Win
Five Focusing Ambitious Replenishme
Steps Target nt
Three 4
Washington State University-2010
 TOCICO Certification Exams

Certification Steps
1. 2, 3.
Fundamental Exams Applications Exams Implementation Cases
TOC Philosophy
F
U Supply Chain Logistics Supply Chain Logistics
Thinking Process N
D Project Management Project Management
TOC Measures A
M
E Finance and Measures Finance and Measures
Applications (one of): N
T
A Thinking Process Thinking Process
Drum-Buffer-Rope L
Business Strategy
Project Management E
X
A
Distribution M

Fast Track Certification Process Validated Application Case

for TOC Experts

Exams Available
Worldwide On Demand (FE Soon On-Line) 5
Washington State University-2010
 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 6

 TOC Improvement Approach

1. Improve the Flow in Operations (and Service

Areas):
2. Build a Decisive Competitive Edge
3. Capitalize on the Competitive Edge
4. Elevate Capacity only when needed
5. Institutionalize the Process
When Formal Organization becomes the
Informal
Remove Engines of Disharmony

Washington State University-2010 7

 Flow Focus for Applications
Exams

Application
Exam
Plan Execu Improv
te e
Establi Establi Single Active Applied POOGI
sh sh Priority Buffer Buffer Processes
Releas Buffer( System Mgmt Analysi
e s) s
Control
Step 1 Step 2 Step 3

Washington State University-2010 8

 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
Washington State University-2010 9
 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

Washington State University-2010 11

 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

Washington State University-2010 12

 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 14

 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
Washington State University-2010 15
 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)
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