Tallen Wald

1. Hanging Fire/Critical Chain Portfolio ManagementWe cant just work, we need to work the right stuff! Tallen Wald

2. Projects • What is Project Management? • The practice of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria at the specified time • Plan – Schedule – Control • Outcomes come from actions • What is a project and what makes it complex? • A network of dependent tasks, each representing a discrete amount of work to be completed through the use of shared resources with specific completion criteria and deliverables that when accomplished results in the desired outcome for the organization • Projects are complex not so much because of the number of tasks, but more so because the number and types of dependencies, task uncertainty/variability, and iteration uncertainty/variability

3. Projects • Common issues we see on projects • Budget overrun • Time overrun • Compromise content • Ever changing priorities • Parts shortage • Common excuses for issues • Customers change their minds • Materials are not always available • Resources aren’t always available • Equipment breaks down • Quality isn’t consistent • Supporting data not always readily available or accurate

4. Critical Path Vs. Critical Chain

5. Understanding variation • Everything has variation, we need to account for variation and manage it • Driving home example: • This is why projects cannot be run on tact time • How are estimates given and documented historically? • Each estimate adds safety factor so it is easier to achieve • This regularly turns into self fulfilling prophecies • 5+5=13 • The more organizational levels involved with estimates the more buffer that is added • We currently hear regularly that “We are 1 week in and currently 90% done” • We then see a second week go by that was required to wrap up the remaining 10%

6. Management • In project management you need to understand the constraint capacity, WIP currently in the system, and current buffer status in order to accurately gate work into the system at the correct time • Focus of management is to improve and control flow through the organization • Flow is governed by the constraint • Performance on the constraint sets the performance of the system • The constraint is used to synchronize the operation • Can you choose where the constraint is?

7. Weakest Links • The focus of management to achieve the flow needs to be on the weakest link • Capacity constraint and Synchronizers • Local optimization increases cost and does not increase throughput • What happens if we strengthen the strong links? • As we grow we collectively need to combat bureaucracy that causes policy based constraints (we see this happen to larger organizations)

8. Variation: Balanced Operation • A balanced operation is impossible and unwanted • Productive Capacity • Protective Capacity • Excess Capacity

9. Constraint Managment • Find/choose the Strategic Constraint • A constraint is needed to manage the operation • Exploit the Constraint • Synchronize/Protect via buffer • 100% utilization targeted at constraint • Subordinate to prior decisions • Synchronize work up stream • Gate work to support • Elevate the Constraint • Continue steps 1-4 • The constraint/synchronizer dictates the flow of the entire operation • Protective capacity is flexed out of non constraints when labor is unneeded

10. Workflow • How/when we gate materials into the operation dictates the level of WIP • WIP is directly related to lead-time and $/hour • Should be done based on priority and capacity • If gated in properly the common practice will be a FIFO work flow system • Priority can only be changed by management • A ban on multitasking needs to be in place • Resource contention needs to be managed, not survived • Clear priority laid out and followed • To solve resource contentions, start dates are moved up, not out • Ferry example: • Every defined step or group must be finished through completion prior to moving on • Utilization of DBR gating maintains WIP and buffer levels • Does not allow early or late starts • The shorter the lead-time, the higher the throughput • Increase in the rate at which the business makes money

11. Hit the ground running • We need to combat the hit the ground running mentality • Work is to be strategically gated in • We need to work on the right stuff at the right time • Concentration on everything equates to concentrating on nothing • Starting everything right away increases the lead-times for all projects as well as increases the WIP • Lead time is directly related to $/hour and WIP

12. Project Network • Block and flow diagram that specifies main steps in the project • Included dependencies and definition of work • Definition of work is most critical in engineering

13. Project Buffer • ABP vs. HP • ABP: aggressive but possible • “if everything is laid in front of you and no hiccups occur, what could you do this in?” • HP: highly probable • “what is the worst case scenario for time to complete this?” • 90% + assurance of achieving this time • 100% is almost impossible in project because of unforeseen circumstances • The difference gives starting point for project buffer • Review needs to be done to assure it is right sized • Iteration variability is accounted for here (engineering) • Driving home example continued:

14. Critical Chain • Project network HP/ABP and buffer time combined to create critical chain schedule • We protect the constraint/synchronizer work centers, tributary chains and overall project with buffers and nowhere else • Critical chain utilized aggregated time buffers placed at strategic locations • People naturally consume the entire timeline given even if it wasn’t all needed • Displaying the ABP time eliminates this issue • The difference between the ABP and HP is moved into the project buffer bucket at the end of the project • How often does every phase/operation of a project go perfect??? Never! • This is why we maintain the project buffer at the end as you don’t know which phase will run into Murphy

15. Buffer Management • Different types of buffers that are tracked • Project, Feeder, Inventory, Resource • Buffers should be managed weekly at a minimum

16. Buffer • Buffers are protection against Murphy • 3 things that burn buffer when not strategic • Student syndrome • Multitasking • Dependencies • All non-constraint work centers must have more capacity than the constraint to assure the constraint never runs dry (protective capacity) • Allows you to replenish constraint buffers when issues arise • Trends from buffer levels will pinpoint areas in need of continuous improvement • Need to drive to root cause, not symptoms

17. Inventory • Physical inventory: Measurement of time • Example: 5 booms on hand=1 week of inventory • WIP: Measurement of time • Purchased inventory • Driven via DBR on volume production and supplies • Defined time buffer tied to project schedule on specials

18. Portfolio of Projects • Definition: concurrent projects utilizing like resources • Synchronization is the name of the game when multiple projects are running with shared resources • Critical chain only accounts for the resource contentions within an individual project • We move to critical chain portfolio management to account for all projects/product lines and how they interact and their dependencies • As we see in independent critical chain schedules, you also will see dependencies between portfolios • https://www.youtube.com/watch?v=7wm-pZp_mi0

19. Resource Contention • Resource contentions drive schedule changes and if mismanaged it leads to a perpetual fire drill • Contention management vs. survival • Synchronizer/constraint is level loaded when managed • Anytime there are 2+ different options of what to do next, you are looking at a contention if the priority is not clearly defined • Priorities come from buffer status • Multi project environments drive more resource contentions • Birds eye view (CCPM) is needed to resolve contention • You need to have knowledge of: All projects, resources, workloads, dependencies, chain of dependencies, the entire portfolio • Contentions are resolved by moving start dates up, not sliding out

20. Critical Chain Portfolio • Network -> Schedules -> Synchronization -> Alignment of action

21. T/I/OE • T/I/OE=Throughput, Inventory, Operational Expense • Listed in order of importance • All project and business decisions should fall back on an assessment of these three topics • WIP (Work In Process) is the area that in Ritalka we need to watch to a closer level • Managing cost and throughout equally regularly leads to end of month syndrome

22. Implementation • Step 1: • Development of project network for each individual project (standardized format per BU) • Order of tasks in block flow diagram defining dependencies • All will be similar, and yet unique • Assign resources in project network • Type of personell or equipment • Assign time per step and resource • ABP (if everything aligns) and HP (90%-95% Sure) • Accounts for duration and iteration variability

23. Implementation • Step 2: • Take the project networks and apply them to a calendar • Total ABP is time length of project if all aligns • Total HP is 95% certain of completion is equal to or less than • Difference in HP and ABP is the safety time • Safety time is pulled off of each step and tagged at the end of the project in a cumulative project buffer • Schedule the start of each task as late as possible in reference to the required due date of the entire program • Resolve resource contentions by moving start dates up (sooner), increasing resources, or utilizing other resources • Feeding buffers added at tributary portions of the chain • Assures critical chain isn’t hurt by non critical chain work • What happens when a feeder buffer is exceeded?

24. Implementation • Step 3 • Synchronization • Specified work center gates in work via DBR • Assures WIP doesn’t grow or decline • Increase or decrease of WIP is management decision • Multitasking elimination • Staggering work to resolve resource contention • Constraint and synchronizer are interchangeable at a portfolio level • Portfolio schedules (Master Schedule) • Buffer Management • Task Management defined • Absolute clarity on priority

25. What to do on Monday morning? • 4 constraint management steps • Identify(choose), exploit, subordinate, elavate • Define the level of WIP (in terms of hours) • Buffer your constraint/synchronizer • Prioritize work load • Ban multitasking

26. What to do next Monday? • Define DBR to support WIP and Buffer (Gating) • Complete project networks • Synchronize buffered project networks • Resolve resource contention and re-prioritize workload • Ongoing buffer and WIP management

27. All boiled down • Everybody should know what should be worked on next and the scope of that work • WIP level should be defined and maintained/complied with • More WIP=longer lead time=lower $/hour • Never starve a synchronizer/constraint