Theory of Constraints Handbook - James Cox Iii [70]
With Critical Chain, improving performance should not be, and does not have to be, a onetime event. Analyzing buffer consumption highlights the problems to solve to keep getting incremental improvements in overall performance. For example, a leading provider of food packaging increased its Throughput from 72 sales projects per year to 116, and then from 116 to 171. Originally completed in 2003, this implementation is still going strong.
Identifying improvement opportunities by analyzing buffer history ensures that local improvements will not only have a global impact, but also not violate the Rules. Actually, making those improvements will only increase the value of the Rules.
Turning “Execution” into a Business Asset
Improving performance is not just about catching up with the backlog and due-dates. It is also about building a business advantage. Once project speed, efficiency, and predictability become a business asset (high margins, low investment in operating infrastructure/equipment, or a competitive edge), the pressure to sustain results, as well as the Rules that enable them, will not subside.
For example, when the U.S. Air Force got used to having fewer aircraft in maintenance and more aircraft available to fly missions, its logistics centers had to sustain the fast turnaround times—the frequent changes in their military leadership notwithstanding.
Similarly, after a large provider of IT applications to the telecommunications industry got used to 14 percent higher revenue per person and 20 percent shorter project durations, the part of the organization delivering those improved results was not only expected but required to continue performing at those levels. Even more impressively, as increasing globalization and the 2009 downturn in the economy put more pressure on prices, this group rose to the challenge once again and was instrumental in maintaining corporate profitability.
Step-By-Step Process for Implementing Critical Chain
This section describes seven practical steps developed in the field over the last 12 years for getting results quickly (in weeks, not months or years).
The operative word here is “quickly,” not only because results can be achieved quickly but because the actual results (or lack thereof) also provide useful feedback to the implementation teams. In those implementations where results were being achieved quickly, it increased confidence and strengthened buy-in; and in cases where anticipated results were not being achieved, course corrections could be made early.
It does not matter whether an organization is large or small; results can be realized within weeks—in fact, as soon as the first rule of low WIP is put into practice.
The seven-step process is as follows:
Step 1: Achieve management buy-in
Step 2: Reduce WIP and implement “full kitting”
Step 3: Build buffered project plans
Step 4: Establish task management
Step 5: Implement surrounding processes
Step 6: Identify opportunities for continuous improvement (POOGI10)
Step 7: (When applicable) Use superior delivery as a competitive advantage to win more business.
Each step is discussed in more detail in the following sections.
Step 1: Achieve Management Buy-In
Experience confirms that the TOC buy-in process11 works quite well, especially when facilitated by skilled and knowledgeable implementers—people who know the details of the adopter’s business and operations as well as Critical Chain. For our purposes, this process translates into getting the following five agreements from management:
1. We need to improve project execution.
2. The solution lies in synchronizing resources by implementing the Three Rules.
3. The Three Rules can be translated into practical procedures.
4. We can take care of all the possible negative side-effects (e.g., loss of accountability when task level measurements are discarded; project managers gaming the priorities by manipulating buffers in their projects; delaying discovery of risks by not starting projects as soon as possible; etc.).
5. All the