TOCICO Webinar March 28, 2012 › Ferguson_TOCICO SOTSOG webinar Mar 2012... · 2014-05-24 · on...

Lisa A. Ferguson, Ph.D. Founder and CEO, IlluminutopiaSM

TOCICO Webinar March 28, 2012

http://www.tocico.org/�

Copyright (c) 2012 by Illuminutopia, LLC

We need an exceptionally good

reference book!


Lisa, each paper will be focused on utilizing one case study to present an important generic concept with applications far

beyond the case.

http://www.amazon.com/Writing-White-Papers-Capture-Readers/dp/0977716937/ref=sr_1_1?s=books&ie=UTF8&qid=1332768592&sr=1-1�

Important generic concept: translating a concept into an application

Discussion with Eli: summary of key points from the book, Writing White Papers, and review of my first draft of the white paper

According to Eli, one criterion was missing – the most important one:

“There needs to be one theme (an important generic concept) throughout any style of

writing, from start to end.”


THEME: Concept versus Application

The idea of concept versus application

The fundamental concepts of JIT

Examples of application versus concept

Hitachi as an example of the results achieved by applying the fundamental concepts

The tendency to grasp the application as the essence


“Standing on the Shoulders of Giants: Production concepts

versus production applications”

Available at www.tocico.org

under Learn and Share TOC (articles)


Dwarfs standing on the shoulders of giants (Latin: nani gigantum humeris insidentes) is a Western metaphor meaning "One who develops future intellectual pursuits by understanding the research and works created by notable thinkers of the past," a contemporary interpretation.

Source: www.wikipedia.org


http://en.wikipedia.org/wiki/Latin�http://en.wikipedia.org/wiki/Metaphor�


Henry Ford Taiichi Ohno

http://en.wikipedia.org/wiki/File:Henry_ford_1919.jpg�

1. Identify a “giant,” not a chupchik. Intuition will guide you – important enough subject for you. 2. Identify the enormity of the area not addressed by the giant. Reality gives the signals that so much more can be done. You are aiming for a broader not a more confined area than what was

addressed by the giant.

3. Get on the giant’s shoulders. Gain the historical perspective – understand the giant’s solution better

than he did.

4. Identify the conceptual difference between the reality that was improved so dramatically by the giant and the area untouched.

5. Identify the wrong assumption. 6. Conduct the full analysis to determine the core problem,

solution, etc.

Copyright (c) 2011 by Eliyahu M. Goldratt

“If I have seen further, it is by standing on the

shoulders of giants.” -- Isaac Newton

http://en.wikipedia.org/wiki/File:GodfreyKneller-IsaacNewton-1689.jpg�

1. Identify a “giant,” not a chupchik.

2. Identify the enormity of the area not addressed by the giant.


Dr. Eliyahu M. Goldratt, 1947 - 2011

A recent paper, by Dr. Eli Goldratt (the founder of TOC), presents the development of Lean at Toyota by explaining the cause-and-effect logic underlying Lean. Dr. Goldratt also discusses how TOC is a way to effectively apply the four fundamental concepts of Lean in different environments. The first fundamental concept is that the primary objective is to increase flow (reduce lead time). Lean is not focused on cost cutting. By focusing on improving flow, costs are reduced as well.

In recent years, Lean has been applied in healthcare. We will briefly discuss in this column how to translate one of the paper’s concepts for healthcare. By viewing patients as the product being produced, some of the concepts in the paper are relevant.


The paper presents the concept of time buffers for improving the flow. The time buffer mechanism explained in the paper utilizes a due date. However, in many situations in healthcare, there is not a due date. In the UK, a “due date” (time from arrival to completed treatment) of four hours was utilized in the ER (since this was the time the government measured for rating hospitals). Thus, the concepts of buffer management, as described in the paper, could be effectively utilized to ensure that patients are prioritized depending on their zone color to improve flow. In addition, tracking where patients are when they enter the yellow and red zones will highlight blockages to flow to know where to effectively focus local improvement efforts. Copyright (c) 2012 by Illuminutopia, LLC

A hospital in which Lean has already been successfully implemented is an ideal environment in which TOC can be added to ensure that the effective methods of Lean are focused to: improve patient outcomes, safety, flow and satisfaction, provide a rewarding environment for healthcare providers and

staff, and management, and improve the financial performance of the hospital.

As a matter of fact, when TOC is implemented in organizations, Lean methods are the ways in which improvement efforts are achieved through the powerful focus of TOC. The purpose of this column is to briefly address how TOC and Lean can be used in collaboration to significantly improve a system, which can be a full organization or part of an organization, such as a department.


My last column in this newsletter pointed out that the focus of Lean is to improve flow (reduce lead times). Costs are reduced as well, but that is not the primary focus of Lean. In hospitals, the focus needs to be on the effective flow of patients since any unnecessary time spent utilizes more of the resources (i.e. beds, staff, supplies, etc.) and increases the chance of infection. Three key types of flow need to be addressed: the emergency room (ER), operating rooms (OR) and the length of stay (LOS) of the patient. In my last column, a brief description of the use of time buffers and buffer management to improve the ER was described.


Using times buffers and buffer management is one way in which TOC can be used to effectively focus Lean improvement efforts. Another way is based on using the Five Focusing Steps (5FS) of TOC – an important process that was described in the business novel, The Goal. The 5FS are a process for ensuring that the factor – the constraint – that is most limiting the achievement of goal units in a system is effectively addressed. In any type of flow, there is typically only one constraint. Some examples of constraints are demand (the market), a department and a type of resource such as nurses. Through the 5FS, we ensure that this constraint is most effectively utilized and that all non-constraints only do what is necessary to support effective utilization of the constraint. The 5FS is the underlying concept that led to the development of the TOC production and project management solutions. The production solution can be used to effectively manage flow in the OR, while the project management solution can be used to effectively manage the LOS of patients by viewing each patient as a project. In both solutions, buffer management is utilized to know where to effectively focus local improvement efforts. Copyright (c) 2012 by Illuminutopia, LLC

There are a number of success stories that combine TOC with Lean and/or Six Sigma. An Oral and Maxillofacial Surgery practice successfully combined TOC, Lean and Six Sigma. As a result, their profits increased from about $100K in 2001 to $2B in 2006. (These results were presented at the TOCICO conference in 2007.) Dr. Wadhwa explained that the next step implemented was using the TOC Strategy and Tactic tree to achieve further improvements. As a result, the collections for the first three quarters of 2007 were $750K higher than the same time period the year before. In addition, the department is so profitable now that 40% of their work is pro bono (for those who cannot afford to pay for the surgery they need).

The next success story is from a production environment. It is

important to remember that Lean was developed for production, and was later adapted for healthcare. Hospitals are not the same as production environments, but do have some key similarities – the most important of which is that both environments deal with flow.


SCI Sanmina, a global electronics contract manufacturer (including medical electronics), presented the results of their continuous improvement efforts in a paper published in the APICS magazine in 2006. In their plants, they tested using different improvement methodologies and looked at the resulting cost savings in each scenario. The average cost savings per plant for Lean was 1%, for Six Sigma was less than 1% and for TOC focusing Lean and Six Sigma was about 15%.

Clearly, using TOC to focus Lean and Six Sigma is the

method with the most significant improvement in performance. These success stories demonstrate the ability of TOC to effectively focus and improve Lean and/or Six Sigma improvement efforts.


Process: 1. Identify a giant 2. Enormity of

unaffected area 3. Getting on the giant’s

shoulders 4. Conceptual difference 5. Wrong assumption 6. Full analysis

Application: 1. TOC; Dr. Eli Goldratt 2. Healthcare 3. Focus has been mainly on

flow in hospitals, with some work in other entities in HC supply chain

4. Need a win-win solution for the entire chain

5. Cost/quality tradeoff and win-lose assumptions

6. Solution to break core conflict of cost/quality and provide a win for all stakeholders


Process: 1. Identify a giant 2. Enormity of

unaffected area 3. Getting on the giant’s

shoulders 4. Conceptual difference 5. Wrong assumption 6. Full analysis

Application: 1. TOC; Dr. Eli Goldratt;

Dr. Michel Delon 2. Health of individuals

(physical, mental, emotional and spiritual)

3. Gaining knowledge and how to understand it (map it using the TP)

4. Understand human health as a system with full logic

5. The mind-body-spirit connection

6. Write the S&T tree and book(s) explaining how to achieve excellent health


Lisa A. Ferguson, PhD, is the founder and CEO of Illuminutopia, an organization that is focused on “Illuminating the way to utopia for individuals, organizations and society” (www.illuminutopia.com). Dr. Ferguson is the author of the chapter on Strategy and Tactic trees in the Theory of Constraints Handbook. Professor Ferguson has taught several programs on how to write S&T trees. She is currently working on completing her book on writing S&T trees, which will be published in 2012. Until June 2008, Dr. Ferguson spent a year working one-on-one with Dr. Eli Goldratt, the founder of the Theory of Constraints (TOC), while learning how to write. Professor Ferguson has trained TOC Experts and Supply Chain Logistics implementers in India, Japan and the U.S. as a faculty member of Goldratt Schools. Professor Ferguson has a PhD in Business (in Operations Management) and an MBA. Dr. Ferguson taught operations management full-time at a university for 10 years. Dr. Ferguson was a TOCICO board member from 2008 to 2011 and is TOCICO certified in Supply Chain Logistics, the Thinking Processes and Critical Chain Project Management.


Understanding more about the Standing on the Shoulders of� Giants ProcessSlide Number 2Slide Number 3The first caseThe Value of our first white paperSlide Number 6Standing on the �shoulders of giantsGiantsThe Processsog ProcessTOCh Newsletter Column written by Lisa A. ferguson, Phd (July 2008) TOCh Newsletter Column (cont’d)Lean and Toc collaboration�TOCH newsletter column (Sep 2008) �by Lisa a. ferguson, phdLean and toc collaboration (cont’d)Lean and toc collaboration (cont’d)Lean and toc collaboration (cont’d)Lean and toc collaboration (cont’d)SOG applicationAnother SOG applicationAbout the presenter

TOCICO Webinar March 28, 2012 › Ferguson_TOCICO SOTSOG webinar Mar 2012... · 2014-05-24 · on...

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