Sales

The Big Case

The Theory of Constraints and Lean thinking in the BIG

We try here in this section to follow the Theory of Constraints applied in The Big and then we confront that with the Lean thinking strategy.

The Theory of Constraint is defined as “ an organizational change method that is focused on profit improvement” . The profit is generated in an environment of Constraints. In other words” The Theory of Constraint defines a set of tools that change agents can use to manage constraints, thereby increasing profits”, and also accepting that : “Most business can be viewed as a linked set of processes that transform input into saleables outputs”.

We analyze the BIG process implemented to The TOC through these five Steps defining the TOC:

1. Identify the System of Constraint

The major constraint of BIG is the drain of ideas or innovations that explain the efforts to collect and develop these innovations. We can follow the path of ways BIG developed to generate the maximum that it can to collect a functional idea could lead in the industry of toys. Not only that but BIG should be collect more ideas than any other firm to compete, lead and turn the business in its favor.

Another level of constraints is clear in the lack of refinement of the the flood of ideas. It will be waste of time if BIG generate ideas which are not turned into functional projects. We keep in mind here that TOC steps is to turn constraint into favorable elements that could help or simply generate aditional extraordinary profit.

Identify the System of Constraint here which appears the elements that constitutes the weakest link : can be either physical or a policy

The policy here is mentioned by the process, or the four-steps explained as”innovation engine”, these steps generate a disturbing ideas or a lack of refinement.

2. Decide How to Exploit the Constraint

The important in the level of Exploiting the constraint is to take over the obstacles that impeach from stepping over the constraints.

In this second steps we can say that developing a strong process to generate ideas and turning the ideas in a functional ideas that generates source of income: either increasing a sales of an item or creating a new items that could be appreciated by the consumer. The final goal is to take as much as gain from these ideas.

We can suggest here that the process of BIG could generate as much as ideas other than the competition, but could be these obtained ideas be organized, classified, served for a potential use required by the season and the environment of manufacturing and use?

Other solution of the the lack of refinement is seen in the expression:” To evaluate concepts received outside the context of the hunts, Collins drew on a number of sources”: The classification of the sources or the arrangement of the innovators, “

3. Subordinate Everything Else

The system of BIG which is founded on the four steps:

1) Generating Ideas

2) Winnowing

3) Refinement

4) Capturing Value

constitutes the general fundamental of creating the operational process of BIG, in addition to that we add the financing operation of the system and the transforming the ideas to cash. The important thing in these units is to adapt the steps to the final goal of increasing profit. To reach this level we need to adapt all the elements of the system to operate at maximum effectiveness. Capturing value the last steps which take the responsibility to commercialize the idea could not be reached if the refinement steps did not generated the best of the idea created. The deep view of the refinement lead to the creation of the value. In final, the steps provided maintain a whole process that the constraints in time and value should be minimized or even cleaned.

4. Elevate the Constraint

Elevate the Constraint is taking whatever necessary to eliminate the Constraint. We can observe that the preliminary steps of generating Ideas and Winnowing and so refinement take a large amount of time and value, and we have to work on reducing as much as we can to reach the efficiency.

5. Return to the Step One

Returning to the first step remind the testing process, This is the step of control that we realy improved the system and removed the constraints.

In the same level as these steps we provide the three essential measurements that drive the change process guided by the TOC

1- Throughput

Throughput is one of the measurements that monitor the TOC , seen as how much we are generating revenue from the process. In the BIG case, the throughput is realized in the capturing value by the amount gained from selling the ideas. This reward which makes the success of the system of BIG is stated on the advance, the royalty, and the guarantee.

2- Inventory

The inventor of BIG should be the ideas that could not be developed in real project or the ideas that is remained in other scope due to the constraints of the time, inappropriate season to be developed or unavailable merchandising environment.

3- Operating Expense

The last measurement is to reduce the cost as much as possible to increase the profit per item or to reach the efficiency of the system, Big should characterize the spending from the reward of the inventors to the final turnover from the manufacturing companies and for the sure the selling companies.

To reach a high level of profit improvement we need to Maximize Throughput while Minimizing Inventory and Operating Expense. This is could be reached in the BIG case by the capitalization of all ideas captured, improved them or modify them to be a source of value creation. The internal