MS-Word: Creating table of contents

I was quite surprised when my colleague -a programmer- walked up to me and asked me “how do I create ‘this’ kind of a TOC? I told him you have to make headings (H1, H2, H3 etc). “and?” He shot back. It was like deja vu for me. I keep explaining this to people once in a while. No, I am not saying it is a major problem. What I am trying to say is that ‘creating table of contents is not as easy to perform as say, formatting a paragraph?’
Sequence of Tasks (when I create a TOC):

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