iSixSigma

Another New Breakthrough Business Tool (TOC)?

Six Sigma – iSixSigma Forums Old Forums General Another New Breakthrough Business Tool (TOC)?

Viewing 23 posts - 1 through 23 (of 23 total)
  • Author
    Posts
  • #44969

    Orang_Utan
    Participant

    Seem the third word people are damned stupid to believe this below claim made by an American.
    ======================================
    Irbins said a study by Association for Operations Management magazine in May showed companies which practised TOC was 20 times as effective as Six Sigma and nearly 10 times more effective than Lean in cost savings.
    =======================================

    New business style makes way into Malaysia
    By NICK LEONG
    PETALING JAYA: A revolutionary way of management, claiming to produce significantly better results than conventional systems like Six Sigma, Just In Time, Total Quality Management and Lean, will be introduced to the country soon.
    Called the Theory of Constraints (TOC), it is used by multinational corporations like General Motors, Boeing, Motorola, Rockwell International, Unilever and Lucent Technologies, and has proven to yield results immediately upon implementation.

    Paul IrbinsTOC expert Paul Irbins said the method could be implemented in companies of all sizes and they did not have to wait a month or a year to see the results.
    ¡°In any company, there is always a section or department which prevents the company from maximising its full potential.
    ¡°The logic behind TOC is simple, and that is to focus on the weakest link. It is not about what we can do in the next fiscal year but what is it that is preventing us from achieving more profit today,¡± he said in a telephone interview from Latvia on Wednesday.
    Irbins said a study by Association for Operations Management magazine in May showed companies which practised TOC was 20 times as effective as Six Sigma and nearly 10 times more effective than Lean in cost savings.
    ¡°With TOC, companies can save money by reducing inventories or money stuck in the system by half.
    ¡°Companies can also cut lead time – the period between order and delivery – by half without additional investments,¡± he said.
    Although TOC was developed for profit-based companies, Irbins said it was equally relevant and applicable for non-profit and service organisations.
    Irbins will lead a TOC workshop in Kuala Lumpur on Nov 27.
    Emprower Management director Chua Yin Li said the two-day workshop would include group activities, case studies and exercises.
    She said chief executive officers, production managers, production planners, IT specialists, engineers and plant managers should attend the intense and practical workshop.

    0
    #145344

    TOC
    Member

    Orang Utah,
    I have attached the link to the article and a quick analysis of the author’s claims. See if you agree with me on the logical fallacy and how they inflated the numbers. The article is short. But I find it very amusing how these claims become inflated by a group that prides itself of solving problems via logic (rather than data :-).
    http://www.advanced-projects.com/APICS_study.htm
     The authors claim that we can assume “linearity”. That may be correct for the factor levels (TOC, Lean, Six Sigma), but this does not mean that they can multiple the added percentages by a factor of 6. As a matter of fact the way they present the data (without their raw data or at least a summary of the total costs and savings), they should have taken a weighted average, if not a geometric mean. In any case, by performing the calculation they did (6*(0.0063 + 0.015)) they greatly inflate the total savings (see calculations below).

    Percentage Saved

    Total Base

    Total Savings

     

    0.015

    100

     $        1.50

     

    0.015

    10000

     $     150.00

     

    0.015

    1000

     $      15.00

     

    0.015

    100000

     $  1,500.00

     

    0.0063

    100

     $        0.63

     

    0.0063

    1000

     $        6.30

     

    0.0063

    10000

     $      63.00

     

    0.0063

    100000

     $     630.00

     

    0.0063

    100000

     $     630.00

     

    0.0063

    10000

     $      63.00

     

    0.0063

    1000

     $        6.30

     

    0.0063

    1000

     $        6.30

     

    0.0063

    10

     $        0.06

     

    0.0063

    10

     $        0.06

     

    0.0063

    1000

     $        6.30

     

     

     

     

     

    Assuming  arithmetic mean of 15 percentages

    Total Cost

     Total Savings

    Actual Percentage savings based on added savings and dividing by total cost

    0.86%

     $335,220.00

     $  3,078.46

    0.92%

    Assuming formula by authors

     

     

    Inflaction factor of actual savings vs. claimed savings

    12.78%

     $335,220.00

     $42,841.12

    13.92
     

    0
    #145345

    TOC
    Member

    P.S. is that magazine peer-reviewed? I believe journals are, but magazines are not :-).

    0
    #145349

    Marlon Brando
    Participant

    TOC : Is  it  a   concept  or  a  tool? 

    0
    #145350

    Orang_Utan
    Participant

    http://www.scientificbusinesssolutions.com/page6.htmlThe conclusion drawn in above article written by two PhD holders is a full of fallacy.If you read and scrutinize the orginal text, the article does not say TOC is applied standalone. Lean and Six Sigma are applied subsequently after TOC analysis.The correct conclusion as per their research data shall be {TQC+Lean+Six Sigma} is twenty times more effective than Six Sigma and ten times more than lean.The chart also does not show TOC alone is contributing 20 times and 10 times than six sigma and lean respectively.That consultant is manipulating a research data to mislead third world people like me. I will write an email to the papers editor.Anyway, I am using TOC first before zooming in with lean (was IE) or six sigma (was TQC) since my first job as IE. :-)

    0
    #145352

    Orang_Utan
    Participant

    Sorry, my mistake. The authors of this research paper did not draw 20 and 10 times more effective kind of conclusion.

    0
    #145353

    Orang_Utan
    Participant

    The authors of this research paper have not gut to come down on this kind of simpleton’s conclusion.Besides the mathematic error pointed by you. Its linearity assumption still needed to be validated.The savings due to lean and six sigma in 6 plants applied TOC, Lean and Six Sigma not necessary same as standalone lean or six sigma in other plants. These factors may be compounded.

    0
    #145357

    Orang_Utan
    Participant

    For me TOC is a commonsense bottleneck concept.

    0
    #145358

    Orang_Utan,
    What do other major Japanese corporations call the Toyota Production System? In the company I worked for they call it ‘Total Quality Control.’
    Cheers,
    Andy

    0
    #145359

    Orang_Utan
    Participant

    Andy, I have no objection to any name people wanted to call their system. :-)The fact presented in a million readerships newspapers must be correct and not bias.Are you in celebration mode? We are off for the next week for two major festivals.

    0
    #145362

    Hope you have a good time!

    0
    #145365

    howe
    Participant

    Sounds great to me. Where can we get more info ?
     

    0
    #145366

    Eric Maass
    Participant

    Mike,
    Assuming you are asking “where can we get more info [on TOC]”, a good place to start might be to read Eliyahu Goldratt’s book, “The Goal”.  It’s written in the format of a story about a man returning to his hometown in charge of a manufacturing plant that is in trouble, and how he discovers (with the help of his insightful friend, Jonah) the Theory of Constraints and applies it to his manufacturing plant.
    Once you have read the book and gotten the concept, you can read other books that talk in detail about how to apply the TOC approach.

    0
    #145368

    TOC
    Member

    Orang Utah,
    The biggest kick that I get out of the article is the way they handle the percentages. If each of the lean companies saves 1.5%, then four companies do not save 4*1.5%, but according to my third grade elementary school teacher, 1.5%. The total saves for the 4 companies is for times as large than the individual savings, but as a percentage, they still save each individually and combined only 1.5%: (1.5 + 1.5 + 1.5 +1.5)/4.
    At the same token, if the TOC saves 6.3% + 1.5%, then the six combined companies still only save 7.8%
    …notwithstanding all the other fallacies that you mention. I knew you’d like looking into this convoluted mess in more detail. Have a great week-end. What surprises me the most is how two Indian names could show up on this paper. I have not known one Indian who isn’t a math wizzard … but maybe that’s what it is: magic!

    0
    #145372

    Simon W
    Member

    OMG, I prepared a historic long speech about this new topic just now but the message is lost and the system only tell me my message fail to post. Wooooo…(i am crying):
    “oooo, u know i am a slow worm,oooo”
    “oooo, u know i don’t wanna crying anymore, oooo”

    So would appreciate our manager here support all with a Higher Quality tool, say, remind writer to save or copy to save before clean my screen and give a sorry mesg.
    Any way, I know I need to be careful before send my thinking to the electronics cable.
    Hope more be noted.
    Gooood Luck,
    Simon W

    0
    #145373

    defect
    Participant

    Simon,
    The defect rate is at approximately every 20th post (lol). Until that gets fixed, why don’t you select the post, copy it, send it. When it fails you paste it into the next reply … at six sigma, we educate our customers!

    0
    #145374

    Orang_Utan
    Participant

    I assume you refer to this
    http://www.advanced-projects.com/APICS_study.htmThe authors of “Continuous Improvement Trio: ….” did not infer 20 times and 10 times kinda nonsense stuff. I can come out another simpleton’s conclusion also, TOC stand-alone is contributing nothing (0%) without both lean and six sigma tools. :-)In mathematic wise, using a percentage point contributed by each plant to add up a total savings for all plants is OK for me.But making a comparision across plants is not a simple and straight forward dollar vs dollar saving comparision. Many factor the authors have to consider such as product value added, product cycle time, maturity of plant, product volume, number of project per plant, number of manhour allocated, etc.For instance, a CI project in a plant making high-end server usually saves more money compared to another CI project in a low-end cellphone plant; a CI project for a product in early cycle time usually reaps more savings than a matured product.

    0
    #145375

    Orang_Utan
    Participant

    Many forum softwares can keep a backup copy in your PC in case there is server communication problem with your PC.Copy and paste is not a six sigma solution for we users. iSxisigma.com shall improve the software if they preach six sigma concept. :-(

    0
    #145383

    Marlon Brando
    Participant

    I  read  the  book:It  is  not  impressive .I  don’t  like  it :mixing fiction with practical work status,just  boring?Trying  to  be  different does  not  mean that you  are  creative?Just  my opinion…. 

    0
    #145384

    Eric Maass
    Participant

    Ah, a book critic!!
    Wait a second – Marlon Brando and critics…hey, Marlon, didn’t the critics vote you, “Broadway’s Most Promising” in your early career, but said that you “mumbled”, later on?  
    Anyway, the story line was not particularly great, but it helped make it a bit more fun for me to read…and, it certainly was read by a lot of people – I was surprised to hear manufacturing managers refer to their bottleneck equipment as their “Herbie”.

    0
    #145403

    Marlon Brando
    Participant

    Yes :A Book  Critic,do you  like  it?I  insist  on  my  opinion:that  book  is  boring  and  full  of  naivity.Next  time  I  will  ask  your  permission  (the  new  Guru) before posting.thanks  and  regards 

    0
    #145408

    Eric Maass
    Participant

    I hope you didn’t mind – I was just having a little fun with your nom de plume…
    I can see why you might find The Goal boring – it certainly rubbed the editors at major publishers the wrong way, which is probably why he had to self-publish.

    0
    #145426

    Marlon Brando
    Participant

    You  seem  to  be  an Expert.I  respect  your  opinion.thanks  and  regards.

    0
Viewing 23 posts - 1 through 23 (of 23 total)

The forum ‘General’ is closed to new topics and replies.