As usual, I'm exhausted after four days of listening and thinking and talking about the Theory of Constraints. Today was loaded with shorter sessions and more interesting conversations.
The day started with two TOCICO International Achievement Awards, presented to Omron Healthcare (Japan) and Godrej Security Solutions (India). Both companies have implemented TOC in multiple areas of the company, and they both have brought their success to the bottom line - enabling growth and surviving downturns with innovative solutions to the challenges in their industries. I particularly liked an insight from the Omron speaker,
It is not Gemba to be changed, it is management to be changed; if management changes, Gemba will also change.
"Gemba" is the place where the action happens in a business - where the value is created. If management changes the way they operate, the way value is created will change as well.
John Koehler talked about a new strategy for business development that he is developing, called Nu-Business. He used a TOC framing to talk about some of the challenges that new businesses find themselves running into, and he has developed some injections to resolves several of these. For example, he has found that many new businesses fail because it takes too long to get to positive cash flow. And that takes too long because they invest too heavily at the outset: they create far too much capacity before they know that the business will be viable. I heard a lot of similarity to the "lean startup" concept of starting small and testing ideas. Koehler has created a phased approach with Nu-Business that acknowledges the changing constraints a business owner has to face as the business grows. I'm curious to learn more as he develops the concept. Koehler is applying the concepts of Nu-Business to his own craft distillery.
Retail operations aren't my forte, but it was interesting to hear Guilherme Almeida and Mathias Fischer of Goldratt Consulting talk about Deep and Narrow Seasonality Strategy work at a large retailer. During peak sales times retailers struggle keep up with sales, so they often push massive amounts of stock to the stores, in hopes that it will sell. Unfortunately, they often end up with excess stock and then massive discounts after the peaks. They did analysis of SKU sales and discovered that the strategy of pushing everything doesn't work - it is only the top sellers that people want to buy, no matter if it is the peak selling period or the off-peak times.
Patrick Wilson presented some thinking about some of the underlying ideas within the TOC Thinking Processes. In the Evaporating Cloud, for example, we talk about the Goal, shared Needs, and conflicting Actions that result. But one can think about this from a different perspective as well. Any action has behind it some measure, which is established by a rule or heuristic, which is created by a belief, which is based on a need, which ties back to the goal. The actions are tangible manifestations of intangibles. Actions are physical (tangible) manifestations of a need or goal. Wilson is hoping that this might be the start of some additional developments of the Thinking Processes.
James Holt and Skip Reedy introduced a CCPM Maturity Model and a mechanism for evaluating CCPM implementations. The maturity model is based on the CMU maturity model, going from (0) Chaos to (1) Initial Steps to (2) Repeatable to (3) Defined to (4) Managed to (5) Optimizing. And they suggest five key areas that a full portfolio management with CCPM implementation will cover: Initiation, Planning, Execution, Recovery, and Evaluation. An important note here is that CCPM primarily covered the Execution and Recovery aspects, though I would argue that one should acknowledge the impact of CCPM on project planning and pipeline planning. The end result of this is a mechanism for evaluating an organization on these five dimensions with a spider chart - over time one should see maturity growing in these dimensions, and it might be a sign of problems if maturity stagnates or reverses.
Dimitar Bakardzhiev talked about another take on the issues of CCPM in software development, where the primary project consists of a number of small tasks (develop a feature) which don't have explicit interdependence. He suggests Project Planning using Little's Law. The thing that was new for me was the "z-curve" (or s-curve) of completed tasks on the cumulative flow diagram (CFD) has a defined initiation, productive, and close-out phases. The overall project should be sized based on the rate of completion in the productive phase, while the buffer should be sized to account for the higher variability initiation and closeout phases. This applies for specific types of projects, though I bet it could be incorporated into larger projects that include this type of work. He's got a slideshare and video posted that follow a similar discussion.
David Ojeda, Matias Birrell, and Salvador Peña presented a case study from Más Capital. In particular, they embedded the use of the TOC Thinking Processes to enable better problem solving. I love how they talked about breaking the familiar challenge in large businesses where people see issues, but don't have a standard mechanism for resolution - usually resulting in slow decision-making. Embedding the TOC thinking processes in their organization helped them speed up the process.
Steve Holt followed on his talk from yesterday with a discussion of Breaking the Management Constraint: Using Mission Command and TOC to Create a Culture of Action. I missed the bulk of his talk, but my ears pricked up when he talked about the fascination we have with "management" (ensuring the right resources at the right time) vs "leadership" (skilled and motivated people). His wide reading of military strategy points out another key element of "command," which is the capability that creates the right strategy. It is this lack of command which creates an environment where people often have no idea why they are there - imagine if that were the case in the military.
Silvério de Souza and Guilherme Almeida spoke about a familiar element of TOC implementations - choke the release. Choking the release is often one of the first steps taken in both manufacturing and project management implementations. They focused on manufacturing and the hidden assumptions under which choking the release creates positive effects. I'll leave the details behind, but the goal of choking the release is to unstick the flow of work on the manufacturing floor, which should reduce lead time and improve due date performance. However, if there are already a high percentage of late orders or if there are work centers full of WIP, the basic guideline won't be sufficient to get the desired effect. Knowing that there are some special cases, they have proposed a couple additional elements of the guideline.