Theory of Constraints Handbook - James Cox Iii [643]
The TDD measures assessed to units along the critical chain paths are additive. They reflect the capability of the system (an accumulation of many individual groups) to deliver as promised. While TDD encourages independent yet interrelated groups to deliver to promise (to be reliable), it also gives management a much-needed measure to determine the capability of the overall system. Over time, TDD levels and trends can be used as an indicator of which groups need improvement, assistance, or elevation.
A Closer Look at the Distribution Department
Let us look at an example of how this works for the Distribution department. Figure 33-14 shows the Distribution department’s TDD over the most recent period of time (in this example, the period is 20 days) where the two tasks for Ideas (discussed earlier) were performed. The arrow above the task shows when the Distribution department actually worked on the project to deliver Ideas. Over this period, the first task for Ideas was one day late, incurring a 10 TDD assessment. The second task for Ideas was four days early and assessed zero TDD. The sum total for the period (just for Ideas) was 10 TDD.
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There is a difference between commitment dates for separately measured units and task times for individuals. When individuals estimate their own task time, you cannot punish them for being late or reward them for being early. Either one (reward or punishment) motivates the individual to extend future estimates of task time. However, when TDD is used to measure the reliability of a unit’s commitments to deliver, both internally and to customers, we expect the unit to use strategically placed buffers to ensure that the commitments can be met (see earlier chapters of this handbook, which address DBR, CCPM, and Replenishment). TDD is not a penalty but an indication to senior management that a unit is missing its commitments. TDD indicates how effectively the unit uses DBR and CCPM to manage its internal operations. If unit management has a good understanding of the unit’s capacity and demand and effectively uses DBR to release work into the unit at the rate the constraint can process it, then TDD for the unit should be very low. TDD will be incurred, however, if management does not have a good understanding of capacity and demand and too much work is released into the system. The purpose of measuring TDD is not to punish or reward unit management but to tell upper management where attention is needed. In addition, we do not reward a unit for recovering TDD on a project managed by another unit. Doing so would encourage units to overstate the number of flow days required or to increase unit resources without real need. Units with the highest TDD should not be punished. They should be studied and helped to see if improvements can be made. Tracking and managing TDD over time at the system level gives the signals needed by top management about the management of capacity at the unit level and can guide the growth process while maintaining stability.
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Of course, the Distribution department contributes to more than just Ideas projects. Their predominant duty is for the distribution function itself, but the Distribution department also has assignments to support Sales and Production. Figure 33-15 shows several segments of the Distribution department’s workload over time. We see that the different products that they support cause some periods of heavy workload and other periods of less workload.
During the first 20-day period shown in Fig. 33-15, the Distribution department