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/
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 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).

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 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

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TOCICO Segmented Fundamentals Exam

Fundamentals Certificate

Multiple Choice Case Study

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

Fundamentals Fundamentals Fundamentals Fundamentals

Certificate of Certificate of Certificate of Certificate of
TOC Philosophy TOC Thinking TOC Applications TOC Finance &
Processes Measures

•Inherent Potential •Conflict •T, I, OE

•Inherent Cloud •DBR
Simplicity •PQ Type
•Inherent Win-Win •Negative •Project Problem
•Five Focusing Branch Management
Steps
•Three Questions •Ambitious •Replenishment
Target
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 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 Thinking Process
A
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)

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 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

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 Flow Focus for Applications
Exams

Application Exam

Plan Execute Improve

Establish Establish Single Active Applied POOGI

Release Buffer(s) Priority Buffer Buffer Processes
Control System Mgmt Analysis

Step 1 Step 2 Step 3

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 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
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 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

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 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

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 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

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 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
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 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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