This document outlines a methodology for using Theory of Constraints (TOC) to help government agencies achieve better, faster, and cheaper services. It begins with identifying the system goal of improving service quality and coverage while reducing avoidable costs and investment. Next, it discusses using TOC's five focusing steps to identify the system constraint, decide how to better exploit it, subordinate other parts of the system, and elevate or break the constraint if needed. Three case studies are presented showing how TOC has helped achieve better quality and coverage of solid waste services, faster delivery of affordable housing, and cheaper emergency relief services. Metrics are discussed for measuring improvements. The document argues that applying TOC to critical areas like infrastructure, agriculture, and

1. How to Identify and Unlock inherent potential within
Government Agencies to achieve
BETTER, FASTER & CHEAPER SERVICES
VISION
Better, Faster
Cheaper Services
SOCIETY WIN
TAX PAYER WIN
IMPROVE SERVICE
Quality & Coverage
REDUCE AVOIDABLE
Cost & Investment
Step 1.1
Step 1.2
Step 1.3
Step 2.1
Step 2.2
Step 2.3
Better
Faster
Cheaper
Better
Faster
Cheaper
Presented by
Dr. Alan Barnard
CEO, Goldratt Research Labs
24th October 2013

2. Research Question
What problem should be #1 on government’s priority list?
Real Gross Domestic Product
Year-over-Year Percent Change
10
World
8
Industrialized Economies
6
Emerging and Developing Economies
Expansion
4
2
Recession
*The IMF Defines Global Recession as
0 World GDP Growth of Less Than 3%...
Contraction
-2
-4
1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Sources: International Monetary Fund and Payden & Rygel Estimates
Should the risk of a double dip recession be #1 priority?
What about the risk of “faster than expected recovery”?
© Goldratt Research Labs, 2013
Slide 2

3. Outline of Presentation
1. A Looming Resource Shortage Crisis
–
–
Early warning signs of supply vs. demand gap in government agencies
Identifying avoidable causes
2. How Theory of Constraints can help to:
–
–
Identify inherent potential to achieve more in with less in less time
Providing Focusing and collaborative analysis process to identify the
system constraint and resolve conflicts blocking further improvements
3. Case Studies to do it Better, Faster, Cheaper…
–
–
–
DOING IT BETTER : Solid Waste Crisis in Africa (Surplus)
DOING IT FASTER : World ―Affordable Housing‖ Crisis (Shortage)
DOING IT CHEAPER : Funding Crisis for Emergency Relief (Shortage)
4. How to measure if we’re getting Better, Faster& Cheaper?
5. How YOU can help apply TOC in your organization?
© Goldratt Research Labs, 2013
Slide 3

4. Dr. Eli Goldratt’s real Legacy
Standing on the shoulders of Giants
“Finally, and most importantly, I wanted to show that we can all be
outstanding scientists. The secret of being a good scientist, I
believe, lies not in our brain power. We have enough. We simply need
to look at reality and think logically and precisely about what we see.”
Dr. Eliyahu M. Goldratt
1948 - 2011
Dr. Goldratt, the creator of Theory of Constraints, said the two key abilities to
“being an outstanding scientist” are simply:
(STEP1) Have the courage to face inconsistencies between what we (expect to)
see and the way things are… and then
(STEP 2) Have the wisdom to challenge basic assumption(s) to resolve these
inconsistencies.
Let‘s start with an important inconsistency that affect us all…
…And then we can explore the basic assumptions that need to be
challenged and the ―How to‖ for making a significant breakthrough…
© Goldratt Research Labs, 2013
Slide 4

5. Why Change?
Is there a gap between our vision for humanity and reality…
“A better life for all…”
“For we must, together and without delay, begin to build
a better life for all…
This means creating jobs, building houses, providing education
and bringing peace & security for all”
Nelson Mandela, 1994.
Reality check 2013
How are we doing with realizing this vision..?
…in your country? ….in the world?
© Goldratt Research Labs, 2013
Slide 5

6. Why Change?
More and more reports of resource scarcity crises…
NEWS AROUND THE WORLD
Water scarcity 'now
bigger threat than
financial crisis’
Looming energy crisis
after faster recovery
from recession
Airport Capacity Crisis:
A Critical bottleneck to
Sunday, 15 March 2009
Tuesday, Nov. 10, 2009
Wednesday, Dec 16, 2009
Looming US Debt
ceiling crisis
China’s Population
Destiny: The Looming
Crisis for China and the
world
U.N. Warns of
Looming Food
Crisis by 2015
Monday, April 11,2011
Thursday, April 28,2011
further growth
Wednesday, Sept 1, 2010
What are the generic early warning signs and common cause(s) to these
resource scarcity crises from around the world?
© Goldratt Research Labs, 2013
Slide 6

7. Why Change?
Early warnings of scarcity crises…Long queues, unreliable supply & high prices
High Unemployment/Poverty
Delays in Justice System
Health System Backlogs
Education & Skills Shortages
NOT GOOD
Examples
Demand > Supply
Port, Road, Rail Congestion
Growing Solid Waste Dumps
Housing Shortage
Emergency Relief Shortages
Food & Water shortages
Time
?????
In many important areas, demand is growing faster than supply…
Why have governments and private sector allowed this to happen and
can we find a way to create the SURPLUS capacity (and funding)
we need to catch up and to keep the gap closed?
© Goldratt Research Labs, 2013
Slide 7

8. What to Change?
Mistakes In deciding WHEN to change (thinking we still have lots of time….)
“The greatest shortcoming of the human race is our inability to
understand the exponential function”
Prof. Albert A. Bartlett
Professor of Physics at the University of Colorado
Quantity (e.g. Population)
Exponential Growth… then Sigmoidal
Limiting Factor: e.g. Finite Resource Capacity
“We have
(more than)
enough and
enough time –
no need to worry
(now)!
“Help!
We don’t have
enough and
don’t have
enough time…”
1st Turning
the Corner –
Speed up
Point
2nd Turning
the Corner –
Slow Down
Point
Time
© Goldratt Research Labs, 2013
Slide 8

9. What to Change?
Example to show full impact of Exponential Growth in Finite Environment
SIMPLE EXAMPLE OF EXPONENTIAL GROWTH
• You are a (lonely) bacteria in a bottle (finite resource)
• Your strain of bacteria doubles every minute
(through cell division)
• At this growth rate, starting at 11am, it will take just
60mins to fill the bottle with bacteria (resulting in you
and 259 or 576 quadrillion tightly squashed
neighbors)
FEW SIMPLE QUESTIONS
1. At what time do we still have 75% of the available
space (finite resource) in the bottle left?
2. At what time will the alarm likely be raised that we
are running out of space?
3. How much more time will the discovery of 3 new
bottles give us?
4. What time is it for humanity in the consumption of
our scarce and finite resources?
© Goldratt Research Labs, 2013
1–1
2–2
3–4
4–8
5 – 16
6 – 32
7 – 64
8 – 132
…
60 - 259
Slide 9

10. What to Change?
Exponential growth in Population – What will be the impact?
13
12
11
10
Alan @ 100
What time is it (for
humanity)?
Current Population Growth Rate = 1.2%
Doubling Time ≈ 60 years
Emerging Market GDP Growth = 6.5%
Doubling Time ≈ 11 years
9
UN
Projection
8
Human Population Billions
7
Alan @ 42
2011
6
2000
5
1987
4
Alan Born
1975
3
1960
2
1930
1
Black Death — The Plague
1800
UN
Populat
ion
Projecti
on after
2011
1+ million 7000 6000 5000 4000 3000 2000 1000 A.D. A.D. A.D. A.D. A.D. A.D.
years
B.C. B.C. B.C. B.C. B.C. B.C. B.C. 1 1000 2000 3000 4000 5000
…the looming resource crisis should not be a surprise (highly predictable)…for
how long has there been WARNINGS about this?
Source: Population Reference Bureau; and United Nations, World Population Projections to 2100.
© Goldratt Research Labs, 2013
Slide 10

11. What to Change?
Reaching the Limits to (Population) Growth - Club of Rome/MIT Study 197)
Estimated
population without
collapse
World Oil
Production
Natural
Resources
Estimated
population
with collapse
Life
Expectancy
Population
Food
Pollution
1900
Copyright © 2006, Pearson Prentice Hall, Inc.
2000
Year
2013
2100
…so what can GOVERNMENTS do to prevent a resource scarcity crisis and
its devastating impact on our vision of ―a better life for all‖?
© Goldratt Research Labs, 2013
Slide 11

12. What to Change to?
CALL for ACTION – What we can and should do to help prevent scarcity crises
There are only really three (complimentary) ways to prevent any looming
resource scarcity crises:
1. Slow down population and urbanization growth rate
(demand) to ensure resources will last longer and more people can
improve their quality of life and life expectancy
2. Find ways to ―do more with less in less time‖ to get more out of
our scarcest and most finite resources (i.e. better exploit what we
have…and not waste it)
3. Accelerate the development of the necessary infrastructure to
meet demand…and secure financial & human capital for funding
these…
Here is how TOC can help do (2) and (3)…

13. Part 2
Introduction to
Theory of Constraints
How to use TOC to achieve BETTER,
FASTER and CHEAPER Service?
© Goldratt Research Labs, 2008-2013
13

14. What to Change to?
5 Focusing Steps of Theory of Constraints to know WHAT to change/what NOT
“A chain is only as strong as its weakest link”
Step 0: Agree on the System GOAL
Step 1: IDENTIFY the System Constraint (WEAKEST LINK)
Step 2: Decide how to better EXPLOIT (not Waste) the System Constraint
Step 3: SUBORDINATE* everything to the above decision
Subordinate = CHANGE only RULES in conflict with decision on how to better exploit/not waste constraint
Step 4: ELEVATE the Constraint (get more of it)
Step 5: WARNING!!!! If in a previous step the constraint has moved, GO BACK to Step 1, - do not let
inertia become the constraint. (However, try not to reach Step 5 else you have to change rules)
Supply
Step 1
IDENTIFY the
Constraint
15/hr
12/hr
12/hr
10/hr
Step 3
Step 2
SUBORDINATE
Decide How to
EXPLOIT the constraint everything to this decision
GOAL 
EXPLOIT potential
for more Goal Units
PROTECT current
level of Constraint
Exploitation
↓ Overproduction / Multiitasking
↓ Rework
↓ Starvation/Blockage
↓ Setups/Downtime
Current level of
Constraint
Exploitation
+ VE
+ VE
Change
- VE
GOAL 
New Constraint
Exploitation Rules
Demand
Step 4
Elevate the Constraint
GOAL 
+ VE
Elevate
NOT
- VE
13/hr
Protective Capacity
New level of
Constraint
Exploitation
+ VE
Change
NOT
- VE
- VE
GOAL 
New Constraint
Elevation Rules
Step 5
If a constraint has been broken, Go back to Step 1
© Goldratt Research Labs, 2013
Slide 14

15. What to Change to?
How to achieve MORE with LESS in LESS TIME using TOC…
―In GOD we all trust…the rest must bring DATA!‖
Necessary Cost
or Investment
Dr. Edwards Deming
Unnecessary /Wasted
Cost or Investment
100%
CCR
Total Lead Time
∆LT GAP
―Touch‖ time
60%
∆T GAP
Lost
Throughput
(CCR Time)
Current System
Throughput
Delays / Unproductive time
1. Potential to ↑ Throughput (with same resources): 20 to 100%
Current Reality: System Throughput vs. Avail Constraint Capacity is typically <60%
Unlock Inherent Potential: Get Throughput = Capacity Constraint Potential + Capacity Buffer
2. Potential to ↓ Lead Time & ↑ DDP/Availability: 20 to 80%
Current Reality: “Touch Time vs. Total Lead Time” ratio is <20% and Typical DDP/Avail < 80%
Unlock Inherent Potential: Get Total Lead Time to be equal to Touch Time + Time Buffer
3. Potential to ↓ “Unnecessary” Costs/Investment”: 10 to 25%
Current Reality: Typical “Unnecessary Cost & Invent” / Total Costs & Invent is 10 to 30%
Unlock Inherent Potential: By doing (1) & (2) reduce Unnecessary Cost & Investment
Doing
MORE
BETTER
in
LESS TIME
FASTER
with
LESS
RESOURCE
CHEAPER
If we increase Flow Rate and reduce Flow Time we also see reductions in “expediting
related” costs and capex to ACHIEVE MORE with LESS in LESS TIME

16. How to cause the Change?
The inherent potential that can be unlocked by FOCUSING on Constraints…
A Review by independent academia of 80 global Theory of Constraint
Implementation Case Studies showed the following results:
Combined
Financial
Revenue/
Throughput,
On-Time-in-Full
Service Delivery
↑63%
↑44%
↓65%
↓ 70%
↓49%
Inventory
Levels
Cycle Times
Lead
Times
↑73%
Just imagine the impact on a country like
Lithuania if TOC can be applied on critical
projects like
infrastructure, agriculture, R&D etc.
All material © CMG &/or CMS, 2004
Source: The World of Theory of Constraints, Vicky Mabin & Steven Balderstone, St. Lucie Press, 1999

17. How to cause the Change?
Where should we focus on scarcest resource – management time/attention?.
Where do you think improvement is needed most?
• For-Profit Organizations (to ensure economic growth)
• Education System (to reduce critical Skills Shortages)
• Health System (to improve health and quality of life)
• Agriculture (to ensure Food Security)
• Mining (to ensure availability of natural resources)
• Energy (to fuel economic growth)
• Airports / Seaports / Road (to reduce congestion, delays)
• Accelerating time-to-market of new technologies/drugs
• ???

18. Part 3
Using TOC’s 5FS to achieve Better,
Faster, Cheaper Government
Case Studies showing how to do it Better, Faster, Cheaper…
1. Solid Waste Crisis in Africa  Achieving Better Quality & Coverage
2. World “Affordable Housing” Crisis  Achieving Faster Services
3. Funding Crisis for Emergency Relief  Achieving Cheaper Services
© Goldratt Research Labs, 2013
Slide 18

19. Developing an inclusive Engagement Model
Design Criteria
1. Applicability
• Robust & Scalable enough to help all types of organizations & individuals
identify & unlock inherent potential.
2. Adoption and Sustainability
• Must be based on a Systems Approach ( i.e. using latest insights and
developments in Theory of Constraints and Systems Thinking)
• Be inclusive of ALL key stakeholders, not just in involvement but in active
contribution.
• Transferability potential through ―Train-the-Trainer‖
3. Process Effectiveness & Efficiency
• Simpler & Faster: Understood by all & Take days, not weeks or months
• Better: Provides ―Actionable Information” on where to FOCUS scarce
resources in a way that consistently delivers significant & sustainable
results to reverse vicious cycle
© Goldratt Research Labs, 2013
Slide 19

20. TOC 5-Day Constraint & Conflict Analysis Roadmap
Finding and challenging limiting assumptions in inclusive way
Performance
Metric 1
Performance
Metric 2
Performance
Metric 3
STEP 1 (Day 1)
WHY CHANGE?
System Goal, Constraint, Gap & UDEs
DEMAND
UDE 5 (2%)
UDE 4 (3%)
UDE 3 (10%)
UDE 2 (15%)
UDE 1 (20%)
∆Impact on Goal Units?
STEP 4 (Day 4)
HOW TO CAUSE THE
CHANGE?
CURRENT
SUPPLY
STEP 2 (Day 2)
WHAT TO CHANGE?
Conflicts & Current Reality Tree
GAP?
STEP 5 (Day 5)
HOW TO MEASURE &
CREATE POOGI?
UDE 3
Conflicts
Need
Action
Need
Action
Action
Need
UDE 3
Goal
Need
Goal
Action
Need
UDE 5
Action
Action
Implementation Roadmap
Need
New Win/win Solution
in Place
Need
(and new START & STOP rules)
Yes, but…
OBS 5
IO 5
Yes, but…
OBS 3
Yes, but…
Yes, but…
IO 1
DE 3
Where we are now?
Need
Goal
Action
UDE 4
Need
Action
Action
Need
Stop
Need
Goal
DE 5
STOP
START
Core Conflict
DE 2
Yes, but…
IO 2
UDE 1
Conflicts
Action
Action
UDE 1
Future Reality Tree
IO 4
OBS 2
OBS 1
STEP 3 (Day 3)
TO WHAT TO CHANGE?
OBS 4
IO 3
Action
DE 4
DE 1
PUDE
New Win/win
Need
Yes, but…
START
Goal
Need
STOP
START
Need
UDE 2
Need
Goal
Need
Action
Action
Goal
Goal
UDE 2
Conflicts

21. Case Study 1 – Background
Solid Waste Crisis in African City Councils
• In January 2007, after a TOC Spearhead Conference in Bonn, a partnership
was formed between Goldratt Research Labs and InWEnt (Capacity Building
International, Germany)
• The Objective of the partnership was to test (through a series of selected
pilots) whether a simplified TOC approach can be used to help Cities
―Do more with Less in Less Time―
• The Pilots selected formed part of InWEnt‗s ―Global Cooperation for
Sustainable Urban Development― Program, 2005-09 done in cooperation with
UN-Habitat ―Sustainable Cities Programme― and UNEP ―Localizing Agenda 21―
• The Pilots Sites include cities from Zambia, Kenya, Nigeria and Tanzania and
involved the ―Solid Waste Management― and ―Water Supply Management―
Systems within these cities.
• The pilots were selected as current problems within Waste Management &
Water Supply had major negative consequences for millions of citizens and the
environment since the GAP between DEMAND and SUPPLY in city
infrastructure are not only very large but growing...

22. Case Study 1 – Background
Solid Waste Crisis in African City Councils
• In most countries, Governments are responsible for ensuring
that garbage is collected, transported and disposed of in a
safe and environmentally friendly manner.
• Common practice is for Private Contractors to collect waste
from private businesses and households in formal areas and
Community Based Enterprises to collect waste from informal
areas.
• But often in developing countries these services are not
extended to the very poor because they live in areas that are
difficult to access or they cannot pay for the service.

23. Case Study 1 – Background
Solid Waste Crisis in African City Councils
• As a result huge piles of rubbish can be found throughout
poor settlements, making poverty, persistent ill-health and low
environmental quality part of everyday life.
WARNING GIVEN TO TOC FACILITATORS
• There will be 50-60 participants, high distrust between
them, some will be there only to receive daily allowance and
traditionally there is high drop-out rate throughout workshop

24. Step 1 – Why Change?
Large & Growing GAP between Supply & Demand
Growth in
Waste Created (Demand) vs. Waste Collected (Supply)
2015
Population = 4,000,000
GAP2015
= 1800 t/day
2005
Population = 2,000,000
Independence
Population = 200,000
GAPtoday
= 700- 800
t/day
Waste
Collected
(Very) Ambitious Target = Close the GAP and keep in closed

25. Day 1 Review
Key Insights of Theory of Constraints
1. Organizations need to improve at the same
rate as what the demand for their product /
service is growing (the red curve)
2. Organizations must find ways to achieve this
improvement (Growth) without jeopardizing
Stability (i.e. every Change = System Improvement)
3. In order to achieve this, organizations should:
a.
b.
c.
FOCUS their limited resources on the System
Constraint or Weakest Link (using 5FS).
FOCUS on finding out to better EXPLOIT OR
ELEVATE the System Constraint (using TOC
Thinking Processes)
All stakeholders contribute to resolve conflicts
blocking them to contribute to better EXPLOIT and/or
ELEVATE system constraint, and identify and
overcome possible negatives of these changes
and/or implementation obstacles

26. Step 1 – Why Change?
The constraint and UDE’s that makes closing the GAP difficult
Citizens
Business
Inspectors
WASTE CREATION
CBE
Contractors
WASTE COLLECTION
Constraint?
The Problem(s)
UDE 8: Govt Depts lack of budget
UDE 7: Resident don’t (want to) pay
UDE 6: Service too expensive
GAP
UDE 5: People dump/burn illegally
700- Waste Bins/Skips avail
UDE 4: No800 ton/day of
“Root Causes”
Lack of awareness
Poor / No Enforcement
Waste not collected
UDE 3: Frequent Eq break down
No Equipment / too old
UDE 2: Cannot access all areas
UDE 1: No service in some areas
Low/No Subscription Rate
Actual Collection
= 200-300t/day
Inspectors
City Councils
WASTE DISPOSAL
Traditional
Solution(s)
Awareness Campaigns
Stricter enforcement of
By-Laws
Get external Funding to
buy/build necessary
infrastructure
More Awareness
Campaigns
i.e. THEY JUST NEED MORE MONEY and
MORE EDUCATION… 

27. Day 1 Summary of “Why Change?”
Your Undesirable Effects that make closing GAP difficult…
Complaint
Why it is Bad?
UDE making improvement Difficult
Stakeholder
Impact on rest of System
Some Franchise contractors don’t
meet demand even if residents pay
City looks dirty, becomes unattractive to visitors
and we don‘t get investments we need
Inadequate storage facilities in some
areas
Bins are overloaded / residents start disposing
waste with pits or fires causing pollution
Authorized contractors / CBE‘s do not get enough
income to make their business viable
No service provider in our area or (if
provided) Service provided is
unreliable
Civil
Society
Some people don‘t care – just
continue with indiscriminate dumping
Some residents use unauthorized
contractors / don‘t know authorized
City
Council
Residents get negative attitude, waste piles
up and all good starting efforts go to waste
Forced to use illegal alternatives to dispose
(pits/fires) or to dump
Service too expensive (we must
pay school fees. food etc)
Forced to use illegal alternatives to dispose
(pits/fires) or to dump
We pay but others don‘t
CBE can‘t afford to provide service and waste
piles up causing sick children etc
Even if we don‘t pay, nobody cares
No enforcement, encourages non payment

28. Day 1 Summary of “Why Change?”
Your Undesirable Effects that make closing GAP difficult…
Impact on rest of System
Takes long time to recover debt, Many
residence don’t subscribe and even those
that did stops then waste builds up
Low subscription by residents (cant
afford it , don‘t care or expect it for free)
Compromised economies of scale
Waste dumped in drains or next to roads
must be collected
Nobody pays for this – the more it happens the
more difficult to recover costs / waste piles up
No ―tax holidays‖ / no cheap finance
Cannot maintain or upgrade old equipment
Trucks cant access all the areas
Cant provide service (cant honor contract) &
waste piles up or illegal disposal / dumping
Some people just don‘t pay (think it
should be free or don‘t care)
Community
Based
Enterprise
Why it is Bad?
Lack of effective enforcement of the
law (cant collect debt)
Franchise
Contractor
Complaint
UDE making improvement Difficult
Stakeholder
Waste piles up, resulting in health &
environment risks and CBE not sustainable
Some people want to pay but cant
afford to
Can’t provide service which mean waste
piles up or illegal disposal / dumping at
night
Some people don‘t know they should pay
or don‘t know consequences
Cant provide service which mean waste piles
up or illegal disposal / dumping
Trucks cant access all the areas
Cant provide service which means waste piles
up or illegal disposal / dumping

29. Step 2 – What to Change?
Insights on finding the Core Conflict(s) that explain most UDEs
“Define a problem precisely and you are half way to a solution”
Alan’s Hypothesis: We have not “defined a problem precisely” unless we’ve defined the
pair of unresolved (systemic and symptomatic) conflicts related to the problem…
Example: The Problem: Very high finished Goods Inventory…
Check: Impact on Company as a whole?
Increase Working
Capital / Reduce
Cash Flow
Supply Chain
Manager
Be a Good
SCM
Maintain
Lowest
Cost/unit
Pressure to
Pressure to
Make to
Reduce
Forecast
Systemic Conflict
Reduce
Invent /
Working
Capital
Increase
Warehouse &
Distrib. Costs
Pressure to
Make only
to Order
Very High
Finished
Goods
Inventory
(WH Full)
Prices
Reduce
Inventory /
Working Capital
Symptomatic Conflict
Pressure to
NOT Reduce
Prices
Maintain fair
Margins
Sales
Manager
Be a Good
Sales
Manager

30. Step 2 – What to Change?
The Unresolved Conflicts associated with UDEs
Systemic Conflicts
UDE(s)
City Council
Not Enforce
By-Laws / Not
Educate more
Ensure
Resident pay /
Viable SWM
System
Be a Good
City Council
Not cause
Civil Unrest /
Not exceed
Budget
UDE 7:
Resident don’t
(want to) pay
Community
Based Enterprise
Be a Good
Citizen &
Parent
Dispose of
waste using
illegal means
(Food, Educ etc)
Be a Good
Citizen (help
make CBE
viable)
Only dispose
of waste with
legal means
UDE 5:
People dump
/burn illegally
Stop
providing
Service to
non-payers
Ensure
Viability of
WMU /
Contractors
Continue to
provide
service
Enforce Bylaws /
Educate more
Use Money
on only
Priorities
Symptomatic Conflicts
Ensure Health
for all
Increase Price
/ Stop
providing
service
Make CBE
Viable
Business
Not increase
Price /
Continue
service
Ensure
residents pay
Be a Good
City Council
Be a Good
Community
Based
Enterprise

31. Step 2 – What to Change?
The Unresolved Conflicts associated with UDEs
Systemic Conflicts
UDE(s)
Symptomatic Conflicts
Contractors
Not invest in
new/more
Trucks
Satisfy
Service
Agreement
with CC
Be a
Good
Contractor
Maintain
positive
cash-flow
Satisfy
Service
agreement
with CC
Not invest in
new / more
trucks
Invest in
new/more
trucks
UDE 3:
Frequent Truck
break downs
Invest in
new /more
Trucks
Maintain
positive
cash-flow
Use illegal
methods to
dispose of waste
Not allow
waste Buildup
Be a
Good
Contractor
Residents
Stay within
Budget
Be a good
City
Council
Provide
service to all
areas
Not add
more Infrastructure
Add
sufficient
infrastructure
UDE 1:
No service in
some/ most
areas
Use only
legal ways
Resident
don’t (want
to) pay
Be a Good
Citizen and
Parent

32. Day 3 Summary of “What to Change to?”
Breaking the Core Conflicts in Solid Waste Management System
Enforcement Conflict
Service Provider Conflict
Manage City Council
SWMU well
Manage Service
Provider /CBE well
now and in the future
now and in the future
Must not
Waste money or
Resources
Must have
Ensure
Compliance
Pressure to
Must
Must
Reduce Cost /
Risk
Meet Service
Demand/SLA
Pressure to
Pressure to
Pressure to
Don‘t Enforce
We have FAIR and (Self)
Enforce (Don‘t
(Tolerate/give more
tolerate nonENFORCEABLE By-Laws
time/educ)
compliance)
Not invest We know when & where to
/ spend
Invest / Spend more
moreinvest and when not to…
Pricing Conflict
Payment Conflict
Manage Pricing Authority
well
Be a Good Citizen
now and in the future
now and in the future
Must
Recover full cost
+ margin
Must
Increase income &
compliance
Must
Must
Not Waste money
Comply & get full
Service Benefit
Pressure to
on Pressure to
Price onWe Price basedPrice on Customer
Customer Perception of
Provider PoV
PoV
Value
Pressure to
Those
Pressure to
Citizen that can
Not to Pay (use and those that can’t, Pay
To
pay, pay
alternatives)
pay in kind.
(use legal method)

33. Day 4 - How to Cause the Change?
Overcoming Implementation “Yes, buts…”
YES BUT 2 - OBSTACLES? WIN:WIN SOLUTION
OBS1.1
New Fair &
Enforceable
By-laws not yet
drawn up
IO1.1
City Council
SWMU prepare
draft by-laws by
Enforcement Agency
INJ 1
We have FAIR and (Self)
ENFORCEABLE By-Laws
Jan08
YES BUT 1 - NEGATIVES?
INJ 1.1
Community
Leaders
appointed to
SWMU
committee
PUDE 1.1
Community
unrest due to
enforcement
Service Providers
OBS 2.1
OBS 2.2
IO 2.1
INJ 2
We know when & where to
invest and when not to…
IO 2.2
Pricing Authority
OBS 3.1
OBS 4.1
OBS 4.2
INJ 2.1
IO 3.1
IO 4.1
IO 4.2
INJ 3
We Price based on
Customer Perception of
Value
Good Citizens
INJ 4
Those Citizen that can
pay, pay and those that
can’t, pay in kind.
INJ 3.1
PUDE 2.1
PUDE 3.1
INJ 3.2
PUDE 3.2
INJ 4.1
PUDE 4.1
INJ 4.2
PUDE 4.2

34. Testing within the Public Sector
How do we apply the process in the Public Sector?
Participants representing all
stakeholders at the beginning…
The (nervously excited) facilitator
…
Active (and fun) participation in
the African Sun…
System Process Map, Conflicts & solutions developed by proud participants…

35. Testing within the Public Sector
What has been the Stakeholder feedback?
1. I’m Very grateful on my being able to fully participate. We have seen that with TOC, Goals are
possible (even if they look impossible) and that the key is to find win-win solutions and focus
on weakest link – City Councilor
2. I did not expect much but now have seen it is possible to work with all the stakeholders as our
real goal (to improve the lives of everyone in our community) is the same – Private Contractor
3. Discovered that we had a very big gap in our system. Previously thought we can only close it
by getting more / new equipment. Now Leant that I get more with the same equipment using
TOC approach - Private Contractor
4. I learned about that “cost of doing nothing” can be very high. In the health sector the “cost of
doing nothing” is a matter of life and death. TOC showed that optimizing our capacity can be
achieved even with less resources by improving the efficiency of available resources – Doctor
5. I learned the need for planning and that the impossible can be possible - Chairman of a
community settlement
6. TOC can even help to address the political issues – Councilor
7. My expectation was low at start of workshop, but have learned the need and benefit for
everybody’s (all stakeholders) participation using this TOC process- Council officer
8. learned that TOC is a window that gives a chance to look at the challenges we face in a
different perspective - University lecturer

36. Testing within the Public Sector
What has been the Stakeholder feedback?
9. Learned I should avoid multitasking and do one thing at a time - Hospital manager
10. Learned the importance of defining the problem precisely before dealing with it - Deputy mayor
11. Learned that the best solution comes by asking the right question – Councilor
12. Learned that the solution to our constraints is within ourselves – Contractor
13. Learned I should not wait for more/new resources but (using TOC) can start with what we have
to do more with the same resources – Habitat for Humanity officer
14. Revisited the pricing conflict and realized that there is a way of agreeing on the right price with
customers – Contractor
15. A long time since I have been to school – but learned to accept my limitations and focus on
exploiting what we have first before asking for more - Small contractor
16. The bottleneck is always on the top – so I could be the weakest link – Owner
17. I will go and find out the weakest link in the process I lead - Operations manager
18. I learned that if you can or you can‘t, you are right. – The coin has two sides and each is
necessary- Lecturer
19. I‘m now inspired to take a new direction in our company and (using TOC) think I can now find
out why we are not able to provide the service to the satisfaction of the client - Small operator

37. Independent Auditors Report on the results
achieved within the Pilot Projects

38. Lessons Learned & Next Steps
Moving from Analysis & Planning to Execution…
1. It is possible to “Do MORE with LESS in LESS TIME” using TOC’s 5FS
within Public Sector with all stakeholders…
by finding ways to close SUPPLY-DEMAND GAP from both sides quickly…
GAP
800 ton /day
Collected
200 ton/day
TODAY
GAP
400 ton /day
Waste
Collected
400 ton/day
AFTER “EXPLOIT”
100 ton /day
Waste
Collected
700 ton/day
AFTER “ELEVATE”
2. Three Important steps in analysis (which should not be skipped):
a)
b)
c)
Make sure ALL stakeholders are present/represented in workshops
Recognizing past achievements (but show current & future GAP)
Getting agreement which current/planned Projects can be stopped to release the capacity
/ budget needed to fully resource constraint focused projects
3. “Vision without Execution is a Hallucination”
Capacity Building (without follow-up and follow-through) will not deliver any significant
and sustainable results (to close GAP and keep it closed)

39. CASE STUDY 2
Using TOC to achieve
FASTER
Government services
© Goldratt Research Labs, 2008-2013
39

40. World Housing Shortage Crisis
Facts from Habitat for Humanity
The world is experiencing a global housing crisis
• Worldwide, some 827.6 million people live in urban slums.1
• By 2020, it is estimated the world slum population will reach almost 1 billion.2
• About 50 percent of the world's population now live in urban areas.1
• Lack of clean water and sanitation claim the lives of more than 1.8 million young children every year.3
Decent, stable housing provides more than just a roof over someone’s head
• Stability for families and children.
• Sense of dignity and pride.
• Health, physical safety and security.
• Increase of educational and job prospects.
Housing must become a priority
• In many countries, the minimum wage is LESS than the rental cost of affordable housing
• As a result, the percentage of people without access to decent, stable housing is rising.
• Increasing the housing supply across the globe is essential.
• Adequate housing is vitally important to the health of the world‘s economies, communities and populations.
• If we are to succeed in the fight against poverty, we must support the expansion of housing both as policy and
as practice.
© Goldratt Research Labs, 2008-2013
40

41. HABITAT FOR HUMANITY WORLD SPEED RECORD
How TOC’s CCPM can help increase speed of house construction
• In 1999, a group using TOC‘s Critical Chain method, set a new ―Habitat for
Humanity World Speed Record‖ for completing a 4 Bedroom House
• Warren Jack who lead the team said "The technique of Goldratt's Critical Chain
technique was one of the two Key Success factors that enabled the Speedbuild
team to set a new Habitat World Record.
• The second was the wall construction method developed in New Zealand by
Laser Systems Ltd under the trademark "Laserbilt".
• The team used Goldratt‘s CCPM method and software to help identify the Critical
Chain in the Project and then to focus on identifying and eliminating planned
delays due to process/resource dependencies and execution delays due to multitasking and unsychronized priorities.
• The new world record was 3 Hours, 44 Minutes & 59 Seconds
• A documentary detailing the building of this Habitat For Humanity house was aired
in New Zealand on Easter Monday, April 5, 1999 at 8:30pm on TV1.
© Goldratt Research Labs, 2008-2013
41

42. Australian Housing Shortage Crisis
Facts from National Housing Supply Council
• The Australian National Housing Supply Council released its third State
of Supply report, estimating a housing supply shortage of 214,700 dwellings. It
predicted that this shortage will reach 328,800 dwellings by 2015 and 640,200
dwellings by 2030.
• The quarterly number of ―completions‖ and the number of ―under-constructions‖
shown below illustrate the difference between how the industry reacts to the demand
and what the actual change in output of housing supply.
• As we can see, the actual output of the industry has not changed significantly during
last 25 years, while the number of dwellings under construction has had a significant
increase
© Goldratt Research Labs, 2008-2013
42

43. Australian Housing Shortage Crisis
Facts from National Housing Supply Council
• The inconsistency between the trend of number of dwellings under construction and
number of completions shows that the house building industry has responded to the
higher demands by signing more contracts and accepting more work. However, it
could not produce higher number of houses and its output remained constant.
• This phenomenon indicates a situation in which limitation of production capacity does
not allow a system to produce more. The past ten years show that the industry has
reached its capacity and with its current structure, it cannot produce more dwellings than
this.
• Knowing that there is already a shortage in supply and demand will probably increase due
to population growth, the need for an increase in housing supply will be inevitable. This
cannot be achieved with the current production capacity and limited resources. Thus, the
only remaining way to improve the capacity would be through innovation and
finding better ways of using the same level of resources for producing more
dwellings
© Goldratt Research Labs, 2008-2013
43

44. CRITICAL CHAIN PROJECT MANAGEMENT
Challenging assumptions on how to do construction projects
Project A
A1.1 A1.2 A1.3 A1.1 A1.2 A1.3 A1.4 A1.5 A1.1 A1.2
Project B
B1.1 B1.2 B1.3 B1.1 B1.2 B1.3 B1.4 B1.5 B1.1 B1.2
Project C
C1.1 C1.2 C1.3 C1.1 C1.2 C1.3 C1.4 C1.5 C1.1 C1.2
0
2
4
6
8
10
12
14
16
Each of these Projects represent the 3-phased construction project to build
a house with 10 main ―tasks‖ each taking 2 weeks = 20 weeks total duration
18 20
22
24
26
28
30
32
34
36
38
40
42
44
46
48
50
52
54
56
58
60
Scenario 1: Multi-Tasking
Blue
A1.1 B1.1 C1.1 A1.2 B1.2 C1.2 A1.3 B1.3 C1.3
Red
A1.1 B1.1 C1.1 A1.2 B1.2 C1.2 A1.3 B1.3 C1.3 A1.4 B1.4 C1.4 A1.5 B1.5 C1.5
Green
A1.1 B1.1 C1.1 A1.2 B1.2 C1.2
0
2
4
6
8
10
12
14
16
18 20
22
24
26
28
30
32
34
36
38
40
42
44
46
48
50
52
54
56
58
60
Project A Complete
Project A
A1.1
A1.2
A1.3 A1.1
A1.2
A1.3
A1.4
A1.5 A1.1
A1.2
Project B Complete
Project B
B1.1
B1.2
B1.3 B1.1
B1.2
B1.3
B1.4
B1.5 B1.1
B1.2
Project C Complete
Project C
C1.1
C1.2
C1.3 C1.1
C1.2
C1.3
C1.4
C1.5 C1.1
C1.2
Scenario 2: No Multi-Tasking
Blue
A1.1 A1.2 A1.3
Red
B1.1 B1.2 B1.3
A1.1 A1.2 A1.3
C1.1 C1.2 C1.3
B1.1 B1.2 B1.3
C1.1 C1.2 C1.3
A1.1 A1.2 A1.3 A1.4 A1.5 B1.1 B1.2 B1.3 B1.4 B1.5 C1.1 C1.2 C1.3 C1.4 C1.5 A1.1 A1.2 A1.3 A1.4 A1.5 B1.1 B1.2 B1.3 B1.4 B1.5 C1.1 C1.2 C1.3 C1.4 C1.5
Green
A1.1 A1.2
0
2
4
6
8
10
12
14
16
B1.1 B1.2
18 20
22
24
26
28
C1.1 C1.2
30
32
34
36
38
A1.1 A1.2
40
42
44
46
Project A Complete
Project A
A1.1 A1.2 A1.3 A1.1 A1.2 A1.3 A1.4 A1.5 A1.1 A1.2
SAVING IN TIME and TIME-SENSITIVE COST $$$
Project B Complete
Project B
B1.1 B1.2 B1.3 B1.1 B1.2 B1.3 B1.4 B1.5 B1.1 B1.2
Project C Complete
Project C
C1.1 C1.2 C1.3 C1.1 C1.2 C1.3 C1.4 C1.5 C1.1 C1.2
48
B1.1 B1.2
50
52
54
56
58
C1.1 C1.2
60

45. CASE STUDY 3
Using TOC to achieve
CHEAPER
Government services
© Goldratt Research Labs, 2008-2013
45

46. What is the impact of BETTER + FASTER on
CHEAPER?
CHEAPER
The Total Cost per
Quality Service Unit
(should) go down
(even more)
Governments increase
QUALITY THROUGHPUT
with the same Resources
Governments are able to
increase the SERVICE
QUALITY & COVERAGE
with same resources
BETTER
Are there any other
ways TOC can help to
better exploit limited
Budgets?
Governments reduce
AVOIDABLE COSTS
due to reducing
rework, expediting, overti
me etc.
Governments are able to
increase SERVICE
SPEED with same
resources
FASTER

47. CASE 3: EMERGENCY RELIEF AGENCY
Reducing budget losses due to “use-it-or-lose-it” policy
Cash not used should be returned
Hungry People
Cash
Constraint
Central
Bank
Account
Region 1
Bank
Account
Suppliers
Region 1
Distr Center
Region 1
Emergency
Relief
Region 2
Bank
Account
Suppliers
Region 2
Distr Center
Region 2
Emergency
Relief
Region N
Bank
Account
Central
Cash Buffer
Suppliers
Region N
Distr Center
Region N
Emergency
Relief
Food
Donors
Cash / Food allocated based on Regional
Central
Food Buffer Forecast in $ and/or Tons of aid needed
Central
Distr
Center
Food Aid not used should be returned
IF there there is 1) a real fear of under-forecasting aid required (people could die) AND
2) an unwritten rule of ―Use-it-or-lose-it‖ THEN
How much of the excess CASH and FOOD will ever be returned to the Central buffers?
Share Success Stories
to secure more
donations / donors

48. HOW DO WE MEASURE
BETTER, FASTER, CHEAPER?
© Goldratt Research Labs, 2008-2013
48

49. Good Early Warning Measurements
What is the best way to measure if we are achieving BETTER, FASTER, CHEAPER?
Cumulative Flow Diagrams
Higher
WIP
WIP
Longer
Supply LT
Supply
Lead Time
Time
Longer
Supply LT
Time
Time
QUALITY THROUGHPUT
PRODUCTIVITY
25% Late /
Not served
20%
15%
Operational Productivity = $T/$OE or QT/OE
Productivity
75% of On-time / Coverage
Higher
WIP
15%
10%
10%
5%
0-5d
5-10d
10-15d
15-20d 20-25d
25-30d
30-35d
35-40d
> 40d
Time in Days
Productivity = Rate at which system is generating goal units (Output or Quality Throughput)
Rate at which system is spend or investing money (Input or Operating Expenses)

50. SUMMARY OF KEY INSIGHTS
DOING IT BETTER
• What is the constraint to achieving better quality and coverage ? The Capacity Constraint or
Bottleneck … find it by looking for the backlog due to demand / supply gap…
• How to better exploit this constraint? Reduce capacity losses on bottleneck due to
starvation, blockage, downtime, rework etc. (capitalize on law of the weakest link)
DOING IT FASTER
• What is the constraint to increasing speed? Time to complete tasks on longest chain of
dependent tasks (Critical Chain)…
• How to better exploit constraint?: Reduce delays on critical chain due to multi-tasking,
waiting for decisions, unsynchronized priorities etc. (capitalize on law of improving flow)
DOING IT CHEAPER
• Where is the constraint? Available Budget
• How to better exploit constraint? Stop initiatives that wont contribute to the highest priority
objectives and remove any forms of “Use it or lose it” (capitalize on law of aggregation).

51. ABOUT THE PRESENTERS
Dr. Alan Barnard (PhD)
Dr. Alan Barnard is one of the leading experts in the world in Theory
of Constraints (TOC) frequently worked with Dr. Eli Goldratt, creator
of Theory of Constraints on large and complex projects around the
world. He is the CEO of Goldratt Research Labs (USA), Chairman of
Realization Africa (RSA), African Phosphates (RSA) and The
Odyssey Institute (USA). Alan is also a board member of TOCICO
and the Dr. Eliyahu M. Goldratt Foundation.
In 2009, Alan was awarded a PhD in Management of Technology &
Innovation, from the Da Vinci Institute in 2009 with a thesis titled
“How to identify and unlock inherent potential within organizations
(private & public) and individuals?”. Alan is also the author of 2
chapters in the McGraw Hill published Theory of Constraints
Handbook.
Alan is a past-President of SAPICS (2000 to 2002) and past-President of TOCICO (2003 to
2005) and serve on the judging panels of the Logistics Achiever Awards and Technology
Top 100.
He has worked with global companies such as ABB, BHP, Cisco, SAP, Random House
Publishing, Tata in the Private sector and also with UN DP, UN WFP and InWent in the
public sector on applying for example Theory of Constraints to City Councils in
Developing Countries in the Public Sector to help them identify and unlock inherent
potential to achieve more with the same resources in less time.

52. Author Contact Details
• alan@goldrattresearchlabs.com
• www.goldrattresearchlabs.com
• www.harmonytoc.com
© Goldratt Research Labs, 2008-2013
52