Theory of Constraints Handbook - James Cox Iii [367]
The correct strategy to roll out a rapid response program with positive customer perception is to test it in advance, qualify customer needs in terms of the potential quantifiable benefits of rapid response, and notify customers in advance of their potential needs. The customer must feel as if they have a choice and are not being blackmailed into paying more than necessary when they get into a bind. If a long-term customer of a manufacturer calls at the last minute and says, “Our forecast was wrong and I need another 100 parts in a hurry,” and the manufacturer, without pre-notification, says, “I’ll be happy to provide those parts in a quarter of the lead time for four times the price,” they should expect a violently negative customer response.
If the customer is given the choice at the time original prices are quoted, customers are typically receptive to paying a premium if they have an emergency and they need the product. I would not believe this myself unless I had personally witnessed its success with a variety of companies. We have now taken several pages to discuss partially just a few of the slides in the S&T. This should convey a perspective of the depth of thinking contained within the tree. For further details, download the free S&T viewer and review the slides in detail, level by level, at least 10 times. From experience, each time you review, you will recognize new statements that you will swear were not in the S&T tree the last time!8
Projects
Once again, the S&T viewer described previously provides a full view of the entire project S&T and the TOC project paradigm called Critical Chain Project Management (CCPM). This S&T tree is intended for project companies (companies that earn the bulk of their revenues from executing projects for customers). In addition, every organization can use the majority of S&T outlined in 3.1.1 (view with S&T viewer) and below to improve their ability to execute change through projects more quickly.
The underlying TOC strategic thinking about projects is that almost all projects are conceived to bring some benefit to an organization.9 Every organization must execute multiple projects every year to survive and, we hope, improve. In most cases, the faster the projects are completed, the sooner the organization realizes the benefits. The faster the execution (flow of a project), the sooner the resources can be released and therefore the greater the number of projects an organization can complete with the same resources.
As we begin a journey to improve strategically how we execute projects, we first do Step 1 of the 5FS—Identify the System’s Constraint. As hinted at previously, the biggest leverage point must be related to increasing project flow—the velocity at which projects are completed. The physical representation of a project is in the tasks needed to complete it. However, not all tasks equally determine the duration of a project. In defining which tasks are most likely to determine duration, TOC defines the tasks that are dependent on each other to complete. TOC recognizes two types of dependencies—logical dependencies (e.g., the carpet installer will not install the carpets until the drywall is up and the rooms are painted) and resource dependencies (the carpet installer will not install the downstairs carpets until they’re finished installing the upstairs carpet—the same resource is doing both tasks).
To summarize, the longest chain of dependent events in a project, considering both task and resource dependencies, is the Critical Chain. There is a huge problem with this definition of the physical constraint of a project. Some of the resources that are needed by a project in order for the project to progress are not modeled in project plans. In fact, projects always seem to progress at a rate that is much slower than the “touch time” or addition of the estimated task times