10 - Davide Galletti - 32 TOCPA - Italy - 23 March 2017

32nd International Conference of the
TOC Practitioners Alliance - TOCPA

www.tocpractice.com 23 March, 2017 Milan, Italy
Theory Of Constraints
for Systemic Innovation
Davide Galletti, www.formeepercorsi.it, Italy

Forme e
23rd March, 2017 Percorsi
Forme
Your logoe
Percorsi
Davide Galletti
Davide Galletti - Systemic Innovator

Since 2002 he has begun to study and to apply
TOC and TRIZ together with R&D.
Over time he has developed his own innovation
methodology by aggregating his studies to
theories and tools from other systemic
disciplines: General Theory of Innovation,
System Dynamics, Prospect Theory, Coopetition
Strategy.
In 2015 he published the synthesis of his
method in his book Systemic Innovation.
Today he is active in helping companies and
organizations which need to solve complex
problems, invent and innovate new products, d.galletti@formeepercorsi.it
processes and services, as well as specific
educational programs.
www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

Forme
Your logoe
Abstract of presentation Percorsi
Innovation is a process subjected to a high failure rate. This is due to several

factors, both of systemic and methodological order.
It is possible to act on these factors through a form of Systemic Innovation,
which means an intentional strategy to generate a desired change and at
least a distributed form of sustainable systemic value.
This presentation introduces the basis of Systemic Innovation and a
dedicated modus operandi, the OPIn Cycle, which highlights how to achieve
huge benefits by using systemic disciplines, the Theory Of Constraints in
particular .
It underlines how winning synergies can be activated when the TOC is
combined with other disciplines and tools belonging, for example, to TRIZ,
Coopetition Strategy, System Dynamics and Prospect Theory.
The work presented is open to future and further implementation of TOC in

innovation processes.

Constraint as Forme
Your logoe
Percorsi
leverage point
Systems, processes, services, can be seen as water pipes

whose flows are regulated by physical and mental taps.

Constraint as Forme
Your logoe
Percorsi
leverage point
What I would like What I can

INPUT OUTPUT
explain to you
to explain to you

Constraints of the Forme
Your logoe
Percorsi
innovation process
Lack of Trouble in Weak tools Bad use of Cognitive
systemic mapping to treat leverage bias and
vision and solving complexity points assumptions
innovation
pipe
What I should like
INNOVATION What Im able
SUCCESSFUL
to explain you
INNOVATIONS
toEFFORTS
explain you
What does it mean, practically ???

Innovation: complexity Forme
Your logoe
Percorsi
and a lot of obstacles
INNOVATION
UDEs DEs
"It is not enough to succeed.

Others must fail."
(Gore Vidal)

Average results of innovation Forme
Your logoe
Percorsi
efforts (many UDEs)
From 3000 raw ideas:
300 shaped and explored
125 projects
9 advanced projects
4 developed UDE lots of work for a
1,7 launched single successful innovation
1 success
Burley and Stevens 3000 Raw Ideas = 1 Commercial Success Research Technology Management May/June 1997 p.16-27
About 3000 raw ideas are generated for a single commercial success
of the project are rejected
Less than1% of patent applications are successful UDE low patents
9 out of 10 products fail in the first four years successful rate
8 out of 10 innovations are required by the ending market
Only 1 company out of 10 develops a successful product and only every 10 years
Miller and Morris 4th generation R&D John Wiley & Sons Inc. 1999
In a year 76% of new consumer goods launched on the main European markets fail (fewer than
10.000 produced parts). UDE high rate of product
Raffaella Bogliardi Nielsen http://www.nielsen.com/it/it/insights/news/ withdrawn from the market
2014/svelato-il-dna-dellinnovazione-di-successo.html

Forme
Your logoe
Coin, dice and lottery Percorsi
In a system composed by 5 levels of the same complexity, what is

the best choice (method) to innovate successfully? Is it
tossing 5 times a coin ?
1 possibility out of 25 = 1 out of 32
rolling 5 times a dice ?

1 possibility out of 65 = 1 out of 7.776
Dice method is 7.776 / 32 = 243 times worst than heads or tails method.
low RATE OF SUCCESS high

no method INNOVATION good method

Forme
Your logoe
Coin, dice and lottery Percorsi
Low Success High Success

Innovation Innovation
Rate Rate
UDE DE
UDE UDE UDE DE DE DE
UDE UDE
And then ? DE DE
My injection we need a specific strategy to
fulfill innovation in a systemic way.
We need a Systemic Innovation.
low RATE OF SUCCESS high

no method INNOVATION good method

Sistemic Innovation: Forme
Your logoe
Percorsi
background and evolution
My definition (as innovation agent) ... systemic innovation is an intentional strategy
2014
for the generation of desired change and at least a distributed form of sustainable
systemic value.
Geoff Mulgan defined systemic innovation as an interconnected set of
2013
innovations, where each influences the other, with innovation both in the parts
of the system and in the ways in which they interconnect.
https://www.nesta.org.uk/sites/default/files/systems_innovation_discussion_paper.pdf
2012 Organisation for Economic Co-operation and Development (OECD) defined

systemic innovation as any kind of dynamic systemwide change that is intended
to add value.
OECD http://www.oecd.org/edu/ceri/ceri-systemicinnovationineducation.htm
2009 Robert Prieto said that systemic innovation is that form of innovation that requires
multiple specialist firms to change their process in a coordinated fashion .
https://gpc.stanford.edu/sites/default/files/wp050_0.pdf
2005 Markku Maula defined systemic innovation innovations that require significant
adjustments in other parts of the business system they are embedded in.
http://www.openinnovation.net/Book/NewParadigm/Chapters/12.pdf
90 Henry Chesbrough and David Teece, defined systemic innovation as those whose
benefits can be realized only in conjunction with related, complementary innovations.
80 https://hbr.org/2002/08/when-is-virtual-virtuous

Systemic Innovation: Forme
Your logoe
Percorsi
my evolution
Spreading application of Systemic Innovation Further improvement of the method
in social, health, software, through super systemic integrations
2017 TOCPA Conference (sharing concepts)
thousands of problems solved 2016 Release of OPIn Cycle Introduction book

hundreds of inventions, 2015 Release of Systemic Innovation book
dozens of patents and
innovations generated 2014
Prospect Theory behavioral economics
Games Theory Coopetition Strategy
Systemic Innovation
System Dynamics Systems Thinking
development and 2011
OPIn Cycle creation
2006 General Theory of Innovation
2002 TOC + TRIZ
Skills in mechanics, plastics and R&D

OPIn Cycle for Forme
Your logoe
Percorsi
Systemic Innovation
Systemic Innovation is a strategy that works better with a dedicated tactic,
the OPIn Cycle.
The flow clearly states the
combination of System Dynamics
and TOC.
Each phase is a cycle itself, as

systems have continuous
feedbacks and loops.
Each phase is connected to the
previous and next one, through
close and specific inputs and
outputs.
The process, depicted as a chain,
is as strong as its weakest ring.

Forme
Your logoe
OPIn Cycle Flowchart Percorsi
OPIn 1 OBSERVE OPIn 2 PINPOINT OPIn 3 INVENT OPIn 4 ORGANIZE OPIn 5 PRODUCE OPIn 6 INNOVATE
INTERNAL SYSTEM CONCEPT

ORGANIZATION PRODUCTION INNOVATION
ANALYSIS SELECTION ABSTRACTION
ARENA UDE INVENTIVE

SELECTION SELECTION SOLVING
VALUE CONCEPT
PROPOSITION COLLECTING AND
SELECTION
Are YES
concepts
NO robust
Is arena still enough?
interesting ?
EXTERNAL NO OPIn CYCLE

ANALYSIS YES IMPROVEMENT
PROBLEM
SELECTION
NEW SCENARIO

Examples of TOC integration Forme
Your logoe
Percorsi
in Systemic Innovation (SI)
UnDesirable Effects (UDEs) and Desirable Effects (DEs) are key concepts of TOC.
In Systemic Innovation the identification of Core UDE and DE (and relative Functions) is
critical to identify the problem correctly and to orient the solving path.
PROBLEM
UDE DE
Existing Situation Desired Situation

(perceived) (perceivable)
A problem is the space between the existing situation and an ideal situation that is
more desirable.

Your logoe
Percorsi
in SI (with TRIZ)
The Ideality is a TRIZ concept.
It is the ratio of a system's Useful Functions to its Harmful Functions and Costs
Useful Functions (UF) DEs

Ideality = I=
Harmful Functions (HF) + Costs UDEs
Ideality =
It is a qualitative formula, based on perception.

For some people numerator and denominator can be inverted.

Your logoe
Percorsi
in SI (with TRIZ)
How much can a car be

ideal ??? I=
How much can a shell be

ideal
I= I=
if we need if we need to be
protection ??? fast ???
Your logoe
Percorsi
in SI (with TRIZ)
UDE DE
(for those who perceive UDE)
UDE 5
UDE 1
UDE 10
UDE 2 UDE 3 DE
UDE 6
UDE 7 UDE 4
UDE 8 UDE 9
(this perceived map can be developed

by TOC tool Current Reality Tree)
DEs
IDEALITY =
UDEs
Your logoe
Percorsi
in SI (with TRIZ)
DEs
UDE DE IDEALITY =
UDEs
There is a TRIZ solving tool named
Ideal Final Result (IFR).
By using it we assume that X Solution IFR
appears itself (X-Self).
IFR = DE-X
DE-X UDE = X-Solution

X-Solution is related to Value Proposition

Your logoe
Percorsi
in SI (with TRIZ)
IFR N = UDE
IFR N
IFR 1 IFR
IFR = DE-X
IFR 3 IFR 2
Your logoe
Percorsi
in SI (with TRIZ)
IFR = DE-X IFR

By typical TOC logics
and trees we can
map the solution
IFR 1a IFR 1b route backward
IFR 2a IFR 2b
Starting Situation (UDEs) = IFR N

Your logoe
Percorsi
in SI (with CS)
a typical conflict in Systemic Innovation by Evaporation Cloud
BD competing enforces me
(business is a war to take
advantage of scarce
AB competition B gain resources) D I must
is a key to excel competitive compete
edge against others
DD all others
A be a Injection - we can (competitors)
successful cooperate AND compete are enemies
company (Coopetition Strategy) (Porterians
assumptions)
C increase D I must
AC innovation innovation cooperate with
is a key to excel
performance CD innovation needs others
different resources and skills
(these may be scarce and
become limiting factors)

Your logoe
Percorsi
in SI (with TRIZ)
In TRIZ Physical Contradictions are NOT solved by modulation, mediation or
compromise. Contradictions and conflicts should be overcome by creative solutions.
in medio stat virtus
+ X VS X
PHYSICAL
CONTRADICTION
CREATIVE SOLUTIONS

Your logoe
Percorsi
in SI (with TRIZ)
In order to solve Physical Contradictions TRIZ offers a specific tool named
Separation Principles.
Suppose we need to heat a steel shaft to increase its lenght, but we also need to
cool it to limit its diameter.
o Separation in Space Heating the shaft in a specific operative

space, cooling it in another
o Separation in Time Heating the shaft in a specific operative
time, cooling it in another
o Separation in Parts and the Whole Heating the shaft in a specific operative
system, cooling it in another
o Separation under Condition Heating the shaft under a specific operative
condition, cooling it in another

Your logoe
Percorsi
in SI (with TRIZ)
About EC, my opinion is that at the root of the conflict between D and D there is
often a perception (that could be wrong) about D and D occurring in the same Space
AND Time AND System AND Condition.
D and D occur
D I must act
in the same Space
with +X action
D and D occur
in the same Time
DD general
assumption
D and D occur
in the same System
D I must act D and D occur under

with X action the same Condition

Your logoe
Percorsi
in SI (with TRIZ and CS)
AB competition BD competing
B gain enforces me D I must
is a key to excel competitive compete DD all others
A be a edge against others (competitors)
Coopetition
successful are enemies
Strategy
company C increase D I must (Porterians
innovation cooperate with assumptions)
AC innovation
performance CD innovation others
is a key to excel
need resources
a typical conflict in Systemic Innovation
TRIZ Separation Principles help both TOCs Evaporating Cloud and
Coopetition Strategy, by creating injections and strategies.
Examples of Separations are:
in Space cooperating in the market A and competing in the market B
in Time cooperating during a crisis and competing during times of wealth
in System cooperating in R&D (common patenting) and competing in the market
under Condition cooperating if the pie doesnt exist and competing
(not necessarily with the same coopetitor) if it exists
Your logoe
Percorsi
in SI (with TRIZ and CS)
Companies can avoid to compete for the same part of the pie.
Coopetitor A could like the centre part of the pie and coopetitor B could like the crust of
the pie. In this case we are not talking about splitting a common target but about
obtaining both one hundred percent of the target that has the pie as intermediate target.
CRUST CENTRE
Company A Company B
Company Company
be a be a
be a be a
successful successful
successful successful
business business
business business
A AND B CRUST AND

Companies CENTRE Companies
create the pie create the pie
CRUST CENTRE
A Company B Company
Company Company
coopete coopete
coopete coopete
Your logoe
Percorsi
in SI (with SD)
System Dynamics theory offers logics and tools to better understand interactions of
systems. In SD some general archetypes are mapped by the Causal Loop Diagram.
Some examples are
You act
Actual Problem B Fix to have
condition DEs
TOC teaches to focus

B
R on Core UDE and
anticipate new UDEs
Corrective
action Unintended What you
consequences often obtain is
more UDEs
Balancing process
with delay Fixes that fail
see: Peter M. Senge
The Fifth Discipline
Your logoe
Percorsi
in SI (with SD)
Limits to Growth archetype and its link with TOC approach.
Limiting
condition
Growing R Slowing
Condition B
action action
Manufacturing
Sales R Orders B Production

TOC has prompt solutions
for a lot of systemic problems.
About this example see
Make To Availabitity (MTA)
Your logoe
Percorsi
in SI (with SD)
Tragedy of the Commons archetype and counterintuitive use of limiting factors.
Individual Net gains Replenishment

R resources
As activity for A
B Resource
Gain per limit Replenishment
Limiting Total rate
individual
activity Activity activity
B R
D immediate
throughput
Individual Net gains
R
Bs activity for B D future
B
throughput
A-B long-term
A and B can limit their activity
(common) targets (as desired constraint) and
operate on replenishment rate
Examples of TOC (TA) Forme
Your logoe
Percorsi
integration in SI
One of the most interesting tools of TOC is Throughput Accounting (TA)
Throughput (T)
T = S TVC
Sales (S)
Totally Variable Cost (TVC)
Operative Expenses (OE) NP = T OE
Net Profit (NP)
One of the TOCs drivers is Throughput
T/CCR
on Capacity Constraints Resource
One driver in SI is mutuated from TA as the ratio of the Systemic Value

generated to its Limiting Factor (constraint, scarce resources, ).
Sometimes it may be qualitative, intangible and not measurable.
All these are similar drivers:
Systemic Value Ideality Target DEs
Limiting Factor Time/Space Constraint Scarce Resource
Your logoe
Percorsi
integration in SI
In a town that needs to reduce CO2 emissions, the driver could be the ratio of
CO2 reduced, or in derived form, the quantity of cycle paths, planted trees,
to every euro invested or square meter used.

Your logoe
Percorsi
integration in SI
In a hospital the driver could be the ratio of healed/nursed patients to every
euro invested, presence of anesthetist, scarce drug, available bed per day.

Your logoe
Percorsi
integration in SI
In a library or culture organization the driver could be the ratio of created
culture to number of books or events available.

Your logoe
Percorsi
in SI (with PT and CS)
TOC Premise Copetition Strategy Premise
Goldratt Local target (core or crust)
there is always a may be a part of the
win-win solution systemic target (the pie)
People are locally logic

People have the (people have local harmonious targets)
innate ability to create
harmonious solutions
Prospect Theory and behavioral
economics Premise
People have limits in the ability
TOC Premise People are to think logically (cognitive bias)
People have the naturally
innate ability harmonious
to think logically
TOC Premise
Nature is simple and always
Human beings are consonant (harmonious) to see: Lisa J. Scheinkopf
part of nature itself (Newton) TOC Handbook page 735

Examples of TOC Forme
Your logoe
Percorsi
integration in SI
DBR and BM

Examples of TOC Forme
Your logoe
Percorsi
integration in SI
TA and
Mafia Offer

Ex. of Systemic Innovation Forme
Your logoe
Percorsi
Beyond the limiting factors
Coopetition is to cooperate
to create the pie
and compete (not necessarily with the same

coopetitor) to take core AND/OR crust in the market.
Ex. of Systemic Innovation Forme
Your logoe
Percorsi
TOC to short innovation timing
3rd December 2016 G-Comm started

a new project for an innovative LED
LAMP to be exhibited in March.
First planning and schedulation of
critical activities
UDEs of usual lamps: difficult to clean,
not well oriantable, difficult to assemble
Germany, 20th March 2017, the
and maintain, energivorous
new LED LAMP was presented,
DE-X, Value proposition and core
after 15 weeks of work.
problem selection.
CPS for a new concept of lamp with a
Molds and dies manufacturing. self portable extruded frame, designed
Parts supplying to be easily assembled, cleaned,
oriented, maintained, .
Driver = Light (lumen, K, CRI, )/watt
Small scale tests and simulations.
Throughput analysis.
Without TOC approach and tools it would have been very hard to
maintain the required timing and take correct strategic decisions
Forme
Your logoe
Conclusions Percorsi
I have tried here to show you how the TOC is a fundamental theory useful to
innovate in a systemic way, and how it is possible and useful to combine it
with other systemic theories like TRIZ, System Dynamics, Coopetition
Strategy, Prospect Theory and others.
My method, Systemic Innovation, contains a lot of tools of various disciplines

together with my own tools. It is thought as an open approach suitable in
everyday life and it is improvable by users. OPIn Cycle is a helpful tactic able
to improve mind settings and performance in innovation.
Here is how I have developed it by myself.

What do you think about it ?
Thanks a lot for your attention.

I wish you good systemic innovation.
d.galletti@formeepercorsi.it

10 - Davide Galletti - 32 TOCPA - Italy - 23 March 2017

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

10 - Davide Galletti - 32 TOCPA - Italy - 23 March 2017

Hochgeladen von

Copyright:

Verfügbare Formate

32nd International Conference of the

TOC Practitioners Alliance - TOCPA

Davide Galletti, www.formeepercorsi.it, Italy

Davide Galletti - Systemic Innovator

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

Innovation is a process subjected to a high failure rate. This is due to several

The work presented is open to future and further implementation of TOC in

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

Systems, processes, services, can be seen as water pipes

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

What I would like What I can

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

What does it mean, practically ???

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

"It is not enough to succeed.

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

In a system composed by 5 levels of the same complexity, what is

rolling 5 times a dice ?

low RATE OF SUCCESS high

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

Low Success High Success

UDE UDE UDE DE DE DE

low RATE OF SUCCESS high

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

2012 Organisation for Economic Co-operation and Development (OECD) defined

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

2017 TOCPA Conference (sharing concepts)

thousands of problems solved 2016 Release of OPIn Cycle Introduction book

2006 General Theory of Innovation

2002 TOC + TRIZ

Skills in mechanics, plastics and R&D

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

Each phase is a cycle itself, as

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

INTERNAL SYSTEM CONCEPT

ARENA UDE INVENTIVE

EXTERNAL NO OPIn CYCLE

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

Existing Situation Desired Situation

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

Useful Functions (UF) DEs

It is a qualitative formula, based on perception.

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

How much can a car be

How much can a shell be

(this perceived map can be developed

DE-X UDE = X-Solution

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

IFR = DE-X IFR

Starting Situation (UDEs) = IFR N

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

in medio stat virtus

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

o Separation in Space Heating the shaft in a specific operative

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

D I must act D and D occur under

www.tocpractice.com 32nd International Conference of the TOC Practitioners Alliance - TOCPA

A AND B CRUST AND

TOC teaches to focus

Sales R Orders B Production

Individual Net gains Replenishment

One driver in SI is mutuated from TA as the ratio of the Systemic Value