I’m a Theory of Constraints (TOC) enthusiast.
I use the concepts of project and feeder buffers to different degrees in my own projects. These are from Critical Chain, which is TOC applied to project management. The techniques really help you get a grip on Parkinson’s and Student syndrome and have early warning signals when things might not be going quite right.
So what exactly is TOC? Here’s a short, short summary.
In short, it’s a method of identifying and strengthening the weakest link (constraint) in any process, in an iterative approach to ongoing improvement. There are also tools that go along with it to help identify assumptions and constraints, etc. TOC was developed by Eli Goldratt. The Avraham Y. Goldratt Institute is the organization that maintains the TOC body of knowledge.
Part of TOC are the 5 focusing steps, which speak to using TOC for continuous improvement:
1. Identify the constraint
Figure out where the bottleneck is, from a total system perspective, not a local part of the system.
2. Exploit the constraint
Get the most you can out of the bottleneck, it will directly increase the throughput of the whole system
3. Subordinate everything to the above decision
Change habits and policies if need be to make sure you are getting the most out of the constraint. No more “this is the way we’ve always done it.” Also, don’t put more work into the system than what the constraint can handle, it just builds up work in progress (WIP) in front of the constraint. This means running a machine in a manufacturing process (for example) so you’re getting 100% utilization is the wrong thing to do if it’s just building up WIP in front of the constraint. Change your thinking….we want global optimization, not local optimization. Nothing is sacred except the goal of global improvement.
4. Elevate the constraint
If you need more throughput from the constraint still, consider adding to it’s capacity by offloading some work, adding extra resources, etc. Speed up the bottleneck!
5. Go back to step 1 once the constraint is broken
“Breaking a constraint” means that you’ve improved the bottleneck to the point that now, the bottleneck has moved to somewhere else in the system. Now, don’t let the new processes and policies become roadblocks to future improvement! Go back to step 1 and start over!
Here’s a TOC concept cartoon from TOCCA
Do you have experience with TOC or it’s project management application, Critical Chain?
Hello,
Being a general problem-solving methodology, TOC may be applied in some other distinct or related directions of project management area, respectively on general system improvement, as its main focus is the weakest link in a chain of processes by successively searching the constraint given by the slowest process. Related to Six Sigma project management methodologies, TOC actually pertains to the Improve phase of DMAIC’s 5 phase project management methodology (inspired by the Deming-Shewart PDCA cycle) used for projects aimed to improve an existing business process. Different common apliances of TOC follows.
1).- Program and project management planning and scheduling. As Josh mentioned, the first one usage is that of using the TOC concept in project planning and scheduling by applying the critical chain method (CCM) through the five succesive steps of the iterative loop for system improvement.
What I would like to add is that for step 2-Exploit (the constraint), usually for improving the rate of the constraining process, it is commonly used the Kaizen method from Six Sigma (or other methods). Kaizen is used for continuous improvement in manufacturing and business standards and practices. It includes five main elements: quality circles, personal discipline, teamwork, improved morale, and improvement suggestions. Practically, it is better to look for Six Sigma projects to see how they maximized the throughput of the constraint. In this way, it should be reminded that the TOC appliance to a system performance, as proposed by Goldratt, provides a serious impact on three key business system operating measures, i.e. the throughput, the inventory, and the operating expense. If the focus is to increase the throughput, the other two will decrease this being a normal behaviour due to the removal of constraints.
Concluding, the strong point of TOC is that it uses a system approach for revealing that individual process improvements are not contributing to the improvement rate of the whole system if they do not improve the constraining process performance.
Also, related to the mentioned link for the funny videoclip from TOCCA, the interested reader might find the TOC concept of Drum-Buffer-Rope for based-operations management method at: http://www.tocca.com.au/Services/whatis_DBR.asp . It is useful for understanding the concept of computing the size of a buffer type ans the lead time concepts used in TOC.
2).-Program and project selection based on throughput and resource maximization. Another useful usage of TOC is that in program and project portfolio management (PPM) practice, when Six Sigma program and/or project selection and their specific pursuing process become of critical importance for the corporate business. The TOC appliance comes to be superior in selecting programs and projects than the common total quality management (TQM) methods. TOC provides the point where to focus during the process improvement. For this, it is necessary to add to TOC the CTX data (Critical to X Requirements, where X is a variable that corresponds to a critical area), which help in determining which type of program or project should be brought into the project managers attention. This means that the Six Sigma Black Belt (BBPM) and the Master Black Belt Professional (MBBPPM) project managers (also initial scarce resources as projects should be scheduled) should choose on what characteristic they should focus, respectively on: cost (C), schedule (S), or quality (Q) projects. The CTX project types are in this case: CTC-Critical to Cost, CTS-Critical to Safety/Satisfaction, CTP-Critical to Process, CTQ-Critical to Quality. Applying TOC may lead, for example in the CTQ case where the constraint time determines the throughput, to knowledge of each project throughput-based priority. Thus, it helps BBPMs and MBBPPMs in program and project selection combined with priority ranking making decision. The certified BBPMs are typically tasked with managing four Six Sigma projects ranging in budgets from $0.5 million up to $5 million. On the superior level there are the MBBPPMs who provide leadership and expertise in statistical analysis, being well trained and certified in descriptive and inferential statistics. Among their responsibilities are training the BBPMs and other professionals in Six Sigma projects, delivering consultancy and guidance as experts even to the Champions who are the corporate/organizational business leaders or senior managers well versed in Six Sigma methodologies (DMAIC and DMADV or DFSS).
3).-Multitasking and PPM. Strongly related to the TOC and CCM appliance are some other directions and concepts applied in project management for: multitasking, project scheduling, organization program and project management, project launch organization and synchronizer resource management. First, it should be noted that the critical chain project management (CCPM) does not allow the multitasking of scarce resources (BBPM, MBBPPM) as at the corporate/organization level resource multitasking is not allowed. So, the fully utilized resources (human resources, parts, materials, subassemblies, etc.) in programs or projects, called also synchronizer resources are focused only on one-at-a-time projects thus being assigned to a single-projects sequence along the specific life-cycle. From this point of view CCPM is bypassing the multitasking issue through a specific method. This changes the common practice of PPM office organizational management for programs and projects as well as the ways of managing single or individual projects, by accepting the requirements for project prioritization (see above example of CTQ case) and focusing on single-project. Usually, the stakeholders and project management team’s available time is an organizational key constraint resource so, during different time intervals a carefully selected portfolio of projects might be approved for their launching/starting. Thus, project schedule dates (launch/start, end) and key synchronizer resource assignments might be appropriately defined and related in accordance with their availability. These aspects define the project launch synchronization aligned to the synchronizer resources defined from the scarce resources. Usually, the project launch date is obtained by selecting the start of the highest prioritized project (e.g. based on throughput maximization), while the end date is the one of duration for all project activities/tasks involving synchronizer resources. Then, for the next prioritized project in order to find its start date, the CCM method based on TOC is applied by first adding a capacity project buffer (as a “safety buffer” or “safety margin”) to the end date of the first project, and this iteration might continue.
4).-Multi-project business flow management. A similar interest is that of the CCM appliance in managing the multi-project environment, respectively in improving the business multi-project flow through an organization (usually a project-oriented one with a maturity level PMO) by a high performance PMO involvement. For this purpose, usually viewed as a corporate PMO strategy, it is necessary to identify a couple of corporate key superior factors for long-term improvement, based on carefully project selection, by applying the TOC and CTX data. Detailed cost-benefit analysis (CBA) and cost-effectiveness analysis (CEA) are necessary for each project from a portfolio. Based on CBA & CEA results and alternative recommendations a program or a project successful accomplishment evaluation may be done. Additionally, applying the TOC combined with specific CTX project types will provide to look for opportunities based on the key superior factors for long-term improvement. This may provide the organization with a serious advantage versus competition with highly ranked factors going up to some hundred percent. Care is taken for many types, e.g. the CTC project type where the constraint down time or its missing determine high costs and respectively a throughput loss for the whole system.
Sincerely,
Mihail