Theory of Constraints Handbook - James Cox Iii [639]
Flows in Complex Organizations
Now let us consider a simple organizational structure and the flows that cross the boundaries of different organizational units or departments. The most common type of flow is that related to day-to-day processing or production to meet commitments for current Throughput to customers; for example, the flow of finished goods from Production to Distribution. However, there are many more interactions and complex flows related to projects. Figure 33-7 illustrates that many people from all parts of the company contribute ideas to the development of a new product. For many such projects, there is a significant amount of interdepartmental discussion and flow of ideas before the project is formally approved. Once the project is approved, there is more interdepartmental flow associated with the activities that are part of the approved project. In Fig. 33-7, a block labeled “Ideas” can refer to either an exchange between departments in the pre-approval stage or a department’s agreed upon obligation to do something to help deliver the final product of “Ideas.” For example, the Design department might have a preliminary design and has solicited “Ideas” on manufacturability from the Production department, essentially asking, “Can you manufacture this with existing resources?” Production, in turn, confirms that it can or provides necessary information to Design to allow the preliminary new product design to be modified. The two-headed arrow between Design and Production represents this interaction. The Sales department contributes comments from their marketing studies. The Service department contributes improvements learned from past products. Distribution suggests ideas for better packing and delivery. Design wants to incorporate the newest and best into the new product. Development includes its own ideas on how to deliver the best ideas they can to benefit the whole organization.
FIGURE 33-6 Resource activity profiles.
TABLE 33-3 Levels of impact on Throughput.
FIGURE 33-7 Flow of ideas.
Figure 33-7 illustrates just a few of the flows across departmental boundaries necessary to develop an idea that may end up as a new product. When we add the flows for all other projects, both in the developmental stage and scheduled, and day-to-day production flows, the result definitely looks chaotic, as shown in Fig. 33-8.
Looking at the complex flows in an organization in this way makes it clear why the management of such organizations is so difficult.
Flow Control with Critical Chain
In the earlier chapters of this handbook, there are solutions for different types of flow patterns: project flows, production flows, distribution, and sales. Using TOC Tools, we can tame this wild set of processes individually, yet they still need to be knitted together for an effective complex organization.
FIGURE 33-8 Flow of all products.
FIGURE 33-9 Buffered project for ideas.
The first of the four Supply Chain Flow Concepts (Goldratt, 2009) is improving the flow. If we take the flow of Ideas as shown in Fig. 33-7, we can reconstruct the flow using the CCPM approach. Changing the length of each task to represent the expected task duration with an aggressive schedule shows the critical chain and the non-critical feeding activities.
A project buffer is included and feeder buffers are inserted. Figure 33-9 shows such a plan.7
Adding similar solutions for Sales, Production, and Distribution using other TOC recommended processes (aggressive schedules with strategically placed buffers of each type) seems to offer an orderly set of templates for managing the organization. These different templates are shown in Fig. 33-10.
Having an aggressive yet carefully buffered flow pattern for each process and project is not sufficient. If the system is allowed to