Theory of Constraints Handbook - James Cox Iii [71]
As the TOC buy-in process of gaining unequivocal acceptance is widely known and documented, this chapter will not dwell on it further.
The major learning to emphasize is that instead of pursuing Critical Chain as a “best practice,” successful adopters used business needs to drive the implementation. Critical Chain was viewed as a means to this end. They analyzed how project performance was linked to making more money or achieving more of the goal of their enterprise, quantified the gap between desired project performance and actual project performance, and set improvement goals accordingly. See Table 4-2.
To demonstrate that managers are committed, the improvement goals they set should be ambitious. It has been consistently observed that organizations are more easily galvanized toward ambitious goals than around incremental improvements. Moreover, only when ambitious goals are set are substantial improvements realized. Modest targets are rewarded with moderate results, and lack of targets is accompanied by absence of results.
Improvement goals are usually set for higher Throughput (i.e., how many more projects, features, experiments, studies, etc., a year compared to current performance) and for faster cycle time.
TABLE 4-2 Links between Project and Business Performance for the Basic Types of Projects
In just one real life example from among many, leadership of a large military organization set a target of increasing the number of testing projects by 40 percent—even though project people were overloaded and projects were running behind. Within three months, the organization was delivering 25 percent more projects, with 30 percent reduction in cycle times. In addition, the goal of 40 percent increase in Throughput was realized in eight months.
Step 2: Reduce WIP and Implement “Full Kitting”
Since the traditional mode of operation leads to too many projects in execution, there are two aspects to pipelining: one is transitioning from high WIP to low WIP, and the second is maintaining low WIP by releasing projects in a metered fashion. This step is about transitioning from high WIP to low WIP.12
The typical process for transitioning from high WIP to low WIP is as follows:
1. Create a list of projects in the various phases of execution. These phases in different types of projects, for example, can be:
IT projects—Scoping, design, coding, and unit testing; system testing; and user testing
New product development—High-level design, low-level design, virtual testing, prototyping, physical testing, and production ramp up
Engineer-to-order—System design, detailed design, procurement, manufacturing, and assembly and testing
MRO—Inspection and disassembly; repair, assembly, and inspection; and trials
2. Specify one of the phases as the drum.13 Drum is the phase that can accommodate the least number of projects at a time. Put 25 to 50 percent of the workload temporarily on hold in the overall pipeline as well as the drum. There is no need to worry about selecting a wrong drum at this time (it can be corrected later), or to be exact in calculating workload from each project. The objective is simply to free up enough resources so that remaining projects will be done substantially faster.
3. For the time being, organize remaining projects using a simple priority process like project due dates. The project that is due first gets the first shot at resources; remaining resources are given to the project due next; and so on. This will accelerate the rate of completing projects. A sophisticated process for synchronizing resources (i.e., based on the rate of buffer consumption) is implemented later (see Step 4).
4. Deploy any unassigned resources to “full kitting” the projects on hold. Full kitting is the process of clarifying requirements, getting sign offs, staging of materials, etc. It is important to distinguish between full kitting and actually doing the tasks: activities that allow project