toc

[makeup]

Has anyone here tried to implement TOC to running multiple projects. If you have do you have any advice on where/how to start. I work for an organisation that really needs to get its act together and I really like the concepts of TOC.

 

[pennpiper]

"TOC?"
What are you talking about? This might refer to:
TOC - Top Of Concrete
TOC - Table of Contents
TOC - Total Organic Carbon
TOC - Theory of Constraints
TOC - Tools of Change (for Publishing Conference)
TOC - Tournament Of Champions
TOC - Traffic Operations Center
TOC - Tactical Operations Center
TOC - The Objectivist Center

etc., etc., etc.

Please consider that different people might use different terms for the same thing.

 

[makeup]

My apologies, theory of constraints

 

[pennpiper]

Back when I went to school (Industrial Management), Constraints were "Men/Material/Money".

All of the following is from Wikipedia, the free encyclopedia

Theory of Constraints (TOC) is an overall management philosophy introduced by Dr. Eliyahu M. Goldratt in his 1984 book titled The Goal, that is geared to help organizations continually achieve their goal.[1] The title comes from the contention that any manageable system is limited in achieving more of its goal by a very small number of constraints, and that there is always at least one constraint. The TOC process seeks to identify the constraint and restructure the rest of the organization around it, through the use of the Five Focusing Steps.

Constraints

A constraint is anything that prevents the system from achieving more of its goal. There are many ways that constraints can show up, but a core principle within TOC is that there are not tens or hundreds of constraints. There is at least one and at most a few in any given system. Constraints can be internal or external to the system. An internal constraint is in evidence when the market demands more from the system than it can deliver. If this is the case, then the focus of the organization should be on discovering that constraint and following the five focusing steps to open it up (and potentially remove it). An external constraint exists when the system can produce more than the market will bear. If this is the case, then the organization should focus on mechanisms to create more demand for its products or services.

Types of (internal) constraints

* Equipment: The way equipment is currently used limits the ability of the system to produce more salable goods / services.
* People: Lack of skilled people limits the system.
* Policy: A written or unwritten policy prevents the system from making more.

The concept of the constraint in Theory of Constraints differs from the constraint that shows up in mathematical optimization. In TOC, the constraint is used as a focusing mechanism for management of the system. In optimization, the constraint is written into the mathematical expressions to limit the scope of the solution (X can be no greater than 5).

 

[pennpiper]

I went out and played some tennis and thought about it some more.

There were actually five "Constraints"

"Manpower/Material/Money/Methods/Motivation"

 

[mauricestoker]

I've run multiple TOC's since the 1990's, including the first one used by the Corps of Engineers. The original was a FFP PI (firm fixed price plus incentive), which the customers and contractors both liked very much. At the time, title of TOC was selected to eliminate having any case law history, to preclude constraints placed by FARS such as non-prepriced items, and to streamline the process. Not having worked in contracting for over 10 years, not sure how other agencies do the work now. The incentive clause was removed after I left the business.

JOC's had a long contract history, JOC books took time and money to prepare, and required frequent modifications for items that might be in Means, but not the unit price book.
RS Means served as a cost and price basis and the AIA or UFGS served as basis for quality.

I'm working with the contracting and engineering office where I am now to see if TOC would be best fit, and whether incentive would be allowed. Haven't checked on contract history for appeals/claims so I have another step yet.

A problem, and a benefit, of the TOC is that you must have trustworthy people in the field, or have a dependable verification of scope and price separate from the construction manager. I used to do up to $10,000,000/month in TOC.

For limited scope and repeat business, you may want to look at Requirements contract and BPA's as well as TOC.

The best way to start is by having a good contract acquisition plan. Knowing what projects you would like to do, when and where is a good negotitation item when you can start by saying "We would like to do X amount of business of this specific nature. Would you be interested in bidding a unit price cofactor (and incentive fee) for this amount of work we foresee coming?"