Theory of Constraints Handbook - James Cox Iii [337]
Unbolting the Existing Systems and Measures
Since the Cost World mentality is driven by traditional assumptions and operating paradigms, companies implementing TOC should not underestimate the effort required to identify the measures, information systems, policies, and business rules that are in conflict with the requirements for establishing a Throughput-driven company.
Luckily, in the case of First Solar, there was very little to undo since Solar Cells Inc. was eager for a way to shake off its hand-to-mouth existence. Still, it took a number of years before the culture truly changed. The rallying cry that sustained the implementation effort was “Throughput.” That single word is the fulcrum around which the organization’s culture was built.
It also provided the measure against which all existing systems are evaluated and changed. If systems, policies, and rules are Cost World oriented, they are treated with due care to ensure that they don’t become constraints in and of themselves. For example, the CFO once wished to introduce a new set of accounting rules. The CEO flatly refused to implement the recommendation, insisting that it would introduce a policy constraint, which would affect the Throughput of the organization. This has become a norm for many on the management team.
Building on Early Success
The old adage that “nothing succeeds like success” is exquisitely truer in an environment where large system change is undertaken. Although early success in the use of Drum-Buffer-Rope (DBR) principles immediately improved the Throughput of the manufacturing process, the real watershed event was the construction of the first plant expansion. Early on, Mike Ahearn discerned that the existing manufacturing facility would not be able to scale to support the required growth, and decided that a new facility must be constructed. It would not just be an extension of the existing facility, but a new, state-of-the-art plant. The key manufacturing technology was all that carried over. Everything else was new—new equipment, new vendors, new plant design, and new IT systems. To complicate matters, the expectation was that it would be accomplished in record time.
The first project plan developed by the project team showed substantial completion in mid-2005. After introducing Critical Chain Project Management (CCPM), the anticipated completion was October 2004—a 30 percent reduction in the timeline.
Despite the project team being understandably apprehensive that this was not doable, they did complete the plant in that time frame.
The impact on team psychology was immense.
In contrast to the previous culture of hand-to-mouth existence, there was a palpable sense of significant achievement, which in turn created a belief that significant change was indeed possible. That watershed achievement formed the basis for First Solar’s “Copy Smart” philosophy, which enabled the company to rapidly and predictably replicate plants much faster than the industry norm.
The factors that enabled that seminal event were:
Intense support from top management
Project leadership from Alan Henderson, Director of Corporate Engineering
Implementing CCPM with software, extensive training, and active support
The use of a dedicated Critical Chain project manager
Progress reporting to board-level using Buffer Management (BM) as the reporting mechanism
The use of a consistent language and a consistent process across the entire organization
The use of the CCPM performance and improvement measures to gain even greater effectiveness
A team-level response to buffer incursions
Understanding the different cultures in each CCPM application area—IT is quite different from R&D or construction.
Understanding the business drivers for behavior in each group—what drives the current behavior and how does this need to change?
Supporting the decisions