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More about uncertainty in TOC

Eli Schragenheim has continued his thinking about handing uncertainty with his latest blog post The current TOC achievements in handling uncertainty.  He describes four key elements of how TOC thinks about uncertainty and why they are important.  Here is my take on these elements.

Buffers: TOC explicitly calls out time and stock buffers, rather than hiding or not acknowledging them. Explicitly creating buffers and deciding where to put them is a planning decision that lines up with the concept that there will be uncertainty in execution and that we must to plan for it more systemically, rather than assuming we can manage it locally.  When buffers are hidden, they are always wasted.

Buffer Management: Now that we have buffers, the execution process makes use of them.  Eli highlights a key aspect of buffer management: it only works if the buffers are usually partially consumed.  If they are fully consumed, there is nothing to manage.  And if they are un-consumed, there is no information from the buffers to guide operations.  

Protective capacity: The very common belief that we must have high efficiency everywhere leads us to hide the capacity in internal buffers.  Or it leads to the concept of trying to balance capacity.  When variability strikes, a balanced system is easily thrown off, whereas a system with those buffers can more easily absorb the variation.  And more specifically, the system must have capacity to absorb the variation - there must be excess capacity.  And looping back to buffer management, the statistics about buffers can point to the resources/work centers which are often the sources of significant buffer consumption, which then leads to focused improvement efforts - improve the items that are linked to the heaviest buffer consumption and the whole system will improve.

Thin and focused planning: Eli calls out this phrase - never articulated in TOC directly - as another result of the TOC Five Focusing Steps.  The mindset in TOC is to focus on the one thing that is limiting the business from achieving more of its goal.  We have the buffers to manage variability, in combination with protective capacity.  Rather than planning everything down to the minute, getting the flow right and letting people manage the details reduces the planning effort and simplifies even the idea of "replanning."

Eli's summary:

A superior level of performing well in spite of significant uncertainty will be achieved ONLY when a decision making process is established that verbalizes the uncertain potential results and lead the decision makers to contemplate decisions that would achieve high gains most of the time, but also take into account that in some cases limited damage will occur.  

Is it or isn't it - Multitasking

The problems with “Common and Expected Uncertainty” | Eli Schragenheim