In what way is the Decalogue different from the Theory of Constraints (TOC)?

In order to answer this, we first need to go back and look at the development of TOC.

Dr. Goldratt wrote The Goal in 1982 to exemplify how production and logistics should be addressed in light of the fact that in any manufacturing process there is a “limiting factor”; he called it constraint. Since then, The Goal has sold over 5 million copies and has been translated into more than 30 languages. The Goal is mandatory reading in virtually every undergraduate and graduate course in production management and, still today, sells about 20,000 copies per month. Tens of thousands of shop floor people and manufacturing and plant managers have been formally trained in the techniques described in the book and that Dr. Goldratt labeled as “Synchronous Manufacturing”.

The goal was followed by 11 more books, all published by North River Press, in which Dr. Goldratt addresses the issue of managing constraints in every business environment. Particularly, the sequel to The Goal entitled It’s Not Luck deals with policy and behavioral constraints, the ones that prevent Sales from being systematically increased. Seven years after The Goal, Dr. Goldratt wrote a largely unknown little booklet called What is this thing called Theory Of Constraints in which he lays the foundation for a comprehensive management theory that would evolve Synchronous Manufacturing into what he called the Theory of Constraints (TOC).

These books, although extremely informative and pleasurable to read, all together have sold less than The Goal and TOC has remained largely in the business and academic world a “manufacturing management approach”.

Evolution:

In spite of the monumental effort by The Goldratt Schools to represent and teach TOC as a comprehensive and holistic approach to the management of organizations and not just manufacturing, very few people in the world today grasp the scientific and philosophical underpinnings of TOC; on the contrary, far too many have become “constraint management consultants”. The reason is very simple: the basic algorithm to manage a production flow is fairly straightforward and can be communicated very effectively to anyone in no time. Understanding the systemic implications of managing the growth and success of an organization via a chosen physical constraint is a totally different issue.

Moreover, Goldratt’s schools have always taught TOC in “silos”; today, anyone, by attending a few weeks’ course, can become a “Certified TOC practitioner” in one (or more) of the many areas into which TOC has been “divided” by the pundits that run the business of producing diplomas.

There is a striking similarity between what TOC has deteriorated into, i.e. “constraint management”, and the myriad of statistical fantasies (often outright hallucinations) to which Deming’s Philosophy the Theory of Profound Knowledge (TPK) has been likened: Lean, Kaizen, Six Sigma, Business Process Reengineering, are all the result of a poor understanding of the implications of a very rigorous body of knowledge, Statistical Process Control, (SPC) which is the starting point to appreciate Deming’s majestic contribution to management.

Deming and Goldratt are, first and foremost, scientists. In spite of a generational gap and differences in linguistic choices to articulate their teachings, they have always had the same goal: furthering human ability to develop and thrive with knowledge. The uncontrolled and, sometimes, greed-driven sprawl of “thin-on-knowledge” consulting activities, coupled with the astonishing reluctance of corporate directors to confront truly holistic approaches to wealth creation, have lead to a complete misconception of the contribution of these two giants to the world of management.

The Decalogue ^TM

In 1999 Oded Cohen and Domenico Lepore published with North River Press the results of their intense collaborative efforts of the previous four years. They called it The Decalogue simply because their algorithm had ten steps. Oded Cohen is the single most authoritative TOC scholar in the world and enjoys a worldwide reputation as a top-notch teacher, mentor and senior advisor; he was intrigued by the efforts that Domenico was making in the early ‘90s to integrate Deming and Goldratt and decided to join forces with him. The book has been for both authors a stepping- stone for their subsequent cultural and professional developments.

From a purely epistemological standpoint, The Decalogue represents the overcoming of a very precise dichotomy that existed between Deming’s purely “systemic approach” based on well delineated interdependencies together with a control mechanism based on statistical understanding of variances (SPC) and Goldratt’s allegedly “reductionist approach” based on a focusing process (on the constraint) together with a control mechanism based on protection from co-variances (buffer management).

The ten steps of The Decalogue, which were derived semi-empirically, enable the creation and the fostering of a systemic organization where emphasis is placed on the constraint but within a framework of statistical predictability. The Decalogue captures, without any scientific compromise, the very essence of Deming’s message to management (“reduce variation”) and blends it very cohesively with the focus (and the measurement system) provided by TOC.

Uniqueness of The Decalogue

So far, any attempt to interpret Deming or Goldratt has been driven by the true or surreptitious desire to address some practical, and limited in scope, issue; as such, these attempts easily lend themselves to being used as “consulting” tools. Almost invariably, these consulting approaches are based on some form of local improvement and linked to some sort of cost reduction exercise.

On the contrary, The Decalogue was derived to further the knowledge available to decision makers to accomplish the ultimate reason for their job: the transformation of the current style of management into one of system optimization. In this sense, The Decalogue is an extremely practical body of knowledge; it points out (and elucidates upon) the steps that must be taken in order to sustain wealth creation over time. In “for profit” organizations we call that wealth Throughput, the pace at which the System generates cash (as a result of sales).

The precision with which The Decalogue guides the transformational effort of any organization can only be appreciated (and learnt) by individuals and organizations truly committed to this end. As a result, The Decalogue is certainly not for everybody, nor purports to be.

Intelligent Management

In order to increase awareness of The Decalogue in the market place as well as to create a platform for its development, Domenico Lepore and a group of like-minded individuals on both sides of the Atlantic have created Intelligent Management, IM.

IM is a framework; a combination of those elements of Method, Knowledge, Tools, Language and Behaviors that are needed in order to manage successfully in complex environments. IM through its website, social media, published materials and educational activities has the goal to become a hub in the generation and dissemination of all those ideas that can lead to the transformation of the present style of management in the western world.

IM is the platform from which Domenico and his colleagues connect and evolve seamlessly The Decalogue to a much more comprehensive, network-theory-based approach to economics and management. Some of the elements that make up this evolution can be found in Domenico’s new book: Sechel: Logic, Language and Tools to manage any organization as a network, available soon from lulu.com