Systems Thinking and Decision Making Assignment - Applying the Theory of Constraints (TOC) Tools to Management Problems

Part 1 - Introduction (1-2 pages)

Provide a brief introduction to the report, incorporating a summary of TOC, eg the fundamental principles behind TOC, some of the main tools/methods, the logic they use, and how the tools you are about to use fit into the overall methodology.

Ensure you cite your sources and reference properly (see Quality of Report in attached file).

Part 2: Application of TOC to a small business: Charlie's Restaurant & Bar

Charlie's Restaurant & Bar is located in central Wellington. Owned by business partners Charlie Fairbrother and Sam Hardacre, it has been in business for around 7 years and employs well over 70 people, 85% of whom are studying part-time or full-time at Victoria University of Wellington. The main customer base comprises students and professionals who work in the downtown area. To keep this customer base, Charlie's needs to have popular amiable staff.

Charlie's has two service areas, one upstairs and one downstairs, each with a different menu. The upstairs area has a more upmarket menu. Charlie's depends on the bar portion of the business, especially late at night, for a large proportion of its income. Charlie's is quite successful despite substantial competition in town for both the restaurant and bar business.

However they face several ongoing challenges (Undesirable Effects)

1. They have very few experienced well-trained cooks, waiters and bartenders

2. Staff tend to display only short term loyalty

3. There is high staff turnover

4. There is a high rate of theft

5. The workers want higher wages to compensate for the late hours of work

6. There are many other competitive job opportunities in town

7. The staff need substantial training to be effective

8. A lot of this training is provided in-house by the owners and more experienced staff

9. The head chef says the kitchen is 'too small' for the number of customers.

The owners have spent many hours discussing how to improve the business, with the most contentious issue being whether or not to increase pay to above the minimum wage. Charlie favours paying more than the going rate as he's tired of always having to recruit more staff, but Sam argues they should keep to the current wage because, with her accounting background, she can't see how they can afford to pay more.

Your mission is to apply the TOC philosophy and methods to devise some strategies to improve the performance at Charlie's Restaurant & Bar.

In particular, you should apply the following tools using the guidance provided in class, tutorials, and the TOC workbook:

a. TOC's Focusing Steps - the traditional or FOCCCUS version

b. Goal Tree

c. Evaporating Cloud

d. Negative Branch method

e. Prerequisite Tree

You will need to supplement information about the case using your experience and judgement. State any significant assumptions you make.

With each tool/method, explain how to read each diagram using the correct logic.

2a. Focusing Steps (up to 2 pages)

(Note: This part can be conducted where appropriate in the analysis, and included in the report where it best fits.)

Apply the TOC Focusing Steps to this situation using either Goldratt's 5 Focusing Steps or Ching's FOCCCUS version to guide/organise your work.

Remember to include the 3 preliminary steps (which should align with your goal tree).

You also should include an example of applying the Drum-Buffer-Rope concept.

2b. The Goal Tree (GT) (1 page)

What is likely to be the goal for Charlie's Restaurant & Bar? State any assumptions you make to justify this goal. What are the critical success factors and necessary conditions to achieving it? Display as a Goal Tree and explain how to read the tree. What necessary conditions or critical success factors are they finding hard to achieve? And what does this imply for where should they focus their effort?

2c. Evaporating Cloud (EC) (2 pages)

Provide a brief storyline and frame the dilemma as an Evaporating Cloud (ie draw the cloud), explain how it is constructed and how to read it. Provide a full list of assumptions, and identify at least 4 injections and suggest which one(s) you think might be most promising for addressing the situation.

2d. Negative Branch Method (NBR) (2 pages)

Restate your chosen injection as an action, and use the Negative Branch Reservation method to identify and mitigate/prevent unwanted side effects/unintended consequences, and build a stronger, more lasting solution represented in a Future Reality Branch. Explain how to read the diagrams.

2e. Prerequisite Tree (PRT) (2 pages)

Choose an injection that looks to be a challenge and follow the Prerequisite Tree (PRT) method to develop an implementation plan to realise that injection. Remember to state the target clearly, list obstacles (about 8), plan how to overcome them and arrange into a tree. Explain how to read your tree.

Part 3 - Summary, Conclusions and Reflections (0.5 page)

Finally summarise the findings and conclusions from your analysis, and reflect on lessons learnt from the process you have gone through, drawing conclusions regarding the usefulness of TOC for management problems.

Attachment:- Assignment Files.rar