1) The document summarizes the sequel to "The Goal" where Alex Rogo must use TOC techniques to save 3 companies under threat of being sold by the parent company UniCo. 2) It provides an overview of each company, their challenges, and Alex's initial improvements. The current challenges are increasing sales/profits substantially for each. 3) Through using TOC tools like conflict clouds, current/future reality trees, and breakthroughs, Alex finds solutions that increase the sale prices of two companies and keeps the strongest performing company. 4) As a result, Alex exceeds the original sale goals for UniCo and is promoted to CEO, successfully saving the companies through TOC.

1. It’s Not LUCK by EliyahuGoldratt Presented by: VinnyMonteiro

2. It’s Not LUCK. What it’s about: Sequel to “The Goal” Alex Rogo is now Executive VP of the diversified group (3 companies) under the UniCo umbrella. UniCo is doing bad and Alex’s group is on the line: it was decided to sell his companies! Alex must use Jonah’s TOC techniques and Thinking Processes to save his companies.

3. Overview of the companies Printing Company President: Pete Purchase Price: $51.4 million. Current sell price: $20 million Before Alex: Huge warehouse with finished products, horrible on-time delivery, 4-week lead time, losing money After Alex: Almost no finished goods, high-nineties on-time delivery, 1-week lead time, barely profitable. Current Challenge: How to increase profits for the year substantially

4. Overview of the companies Pressure-Steam President: Stacey Kauffmn Purchase Price: $80 million. Current sell price: $30 million Before Alex: Internal constraint, high competition forces low margins After Alex: A lot of excess capacity, barely profitable. Current Challenge: How to increase sales/profits for the year substantially. Responsiveness to clients to 100%. Need a marketing breakthrough.

5. Overview of the companies I Cosmetics President: Bob Donovan Purchase Price: $124 million. Current sell price: $30 million Before Alex: logistics and distribution were chaotic and costing a lot of money, production was a major set-back, losing money After Alex: doubled production output, streamlined distribution, still slightly in the red. Current Challenge: How to increase sales/profits for the year substantially. New products not launching fast enough.

6. 2. The Conflict cloud 1. Precisely verbalize the conflict and write the cloud. First question: What do I want? (top right) Second: What does the other person want? (bottom right) Third: To satisfy what need, do I insist on what I want? Fourth: To satisfy what need, does the other person insist? Fifth: what is our common objecive? Why do we care to negotiate? What do I want? To Satisfy what need? Sharon home before 10pm Ensure Sharon’s Safety Close the wrapper department Increase profit What is our Common Objective? Have a good family life Sell Pete’s company for a good price What does he/she want? To Satisfy what need? Sharon home around midnight Sharon is popular Keep the wrapper department operational Protect the asset base

7. 2. The Negative branch Start with an UDE (Un-Desirable Effect) Make “Injections” to the diagram using If…Then statements until a solution comes out of it.

8. 2. The Current Reality Tree Diagramming the cause and effect relationships that connect all problems(UDEs) prevailing in a situation. Goal: to recognize the one or two core causes that is causing all the problems Start by making a list of 5-10 UDEs and start connecting them with logical statements

9. 2. The Future Reality Tree Start with the end in mind, the objectives. Goal: to create a tree that shows how to achieve the desired outcome by using if/then statements Add more injections until objectives are reached. Transition Trees – a “how to” tree. How to transfer from the present in the desired future.

10. 3. Breakthroughs The Wrapper Department in the Printing Company. The ability to do quick set-ups can help compete on large quantities. Customers’ conflict: better prices vs. less inventory Breaking the cloud: give customers better prices AND help them have less inventory.

11. 3. Breakthroughs 1. I Cosmetics new distribution system Increased inventory in the plants from less than a day to twenty days. For quick response to the shops, delay shipments until almost the last possible minute Shops struggle with having credit and having to buy a lot of inventory at once for their stores and still have shortages. Helping shops by determining discounts based on the amount the shop orders per year, not per order Shops are replenished on a daily basis Give the merchandise on consignment terms, only pay upon selling, but require shelf space to do so.

12. 3. Breakthroughs 1. Pressure-Steam new marketing idea Currently the companies buy the machine and spare parts. Machines are now being sold at cost to get their foot in the door A lot of pressure to cut costs on the spare parts. The new idea is to work like Xerox: Pressure steam owns the equipment, the spare parts and the maintenance. What they will sell is pressure steam, what the customer really wants. They will charge a flat monthly fee plus usage per month. Offer to pay penalties for every breakdown that lasts longer than 24hrs.

13. 4. The outcome Original Plan: sell all 3 companies in order to gain less than $150 million in order to increase UniCo’s rating. I Cosmetics sold for $270 million Printing Company sold for $168 million Keep Pressure-Steam: the best company in the UniCo division and the Best in its industry. UniCo needs a company to set the pace.

14. 4. The Outcome Alex Rogo becomes the new CEO of UniCo!