march 20, 2008 2008 dixie crow symposium, warner robins, ga slide 1 critical chain management -...

March 20, 2008 2008 Dixie Crow Symposium, Warner Robins, GA Slide 1

Critical Chain Management - Reducing Depot Maintenance

Flow Days

Scott R. Schultz

Mercer University / Mercer Engineering Research Center


About the Author

Dr. Scott Schultz – assistant professor Mercer University, and consultant at Mercer Engineering Research Center.Industry Experience:• 13 years automotive experience – Ford Motor Company.• 2 years furniture experience – Furniture Manufacturing Management center.• Consulting – manufacturing and militaryTeaching Experience:• 6 years as Industrial Engineer prof. at Mercer • Simulation• Production, scheduling, inventory control• Operations Research• others…


Abstract

In this short course we describe and discuss the concept of critical chain management. Critical chain management was originated by Eliyahu M. Goldratt as an outgrowth of his Theory of Constraints with respect to project management. Critical chain management explores why projects tend to be late, and develops an interesting approach to mitigating this problem. Now what does project management have to do with depot maintenance? Depot maintenance is not so much manufacturing, but is really more like project management. We then link the concepts of critical chain management to depot maintenance and how critical chain management can influence one of the depot’s primary measurables, “flow days”.…


Why This Talk?

Critical Chain Management:

• Applies to anyone involved in project management.

• Applies to Depot Maintenance.


Project Management - PERT/CPM

Classical methods of analyzing projects – PERT/CPM

CPM – Critical Path Method: addresses the tradeoff of the increased cost to reduce the time to complete a task, versus the cost reduction of completing the project as a whole.

PERT – Program Evaluation and Review Technique: deals with project uncertainty by using the mean and standard deviation of individual task times to determine the probability of completing the overall project within certain time ranges.


Project Management - PERT/CPM

PERT/CPM – both methods require knowledge of the critical path.

2A,5

1 3 4 5 6 9 10

7

8

11B,8 C,15

D,12

F,8

E,10G,11

H,5

I,4

J,2K,8

L,14

M,5

N,5

0

0

Critical Path – the longest path through the precedence network diagram.

Precedence Diagram – graphically describes which tasks must complete before others begin, and which tasks can be performed in parallel.


Critical Chain Management

Developed by Eliyaha M. Goldratt – 1997

An application of his Theory of Constraints as applied to project management.

First major work on project management since PERT/CPM.

Goldratt References: • The Goal, a process of ongoing improvement, 1984• Theory of Constraints, 1990• Critical Chain, 1997


Theory of Constraints (TOC)

Overall Idea – The goal of a company is to make money. The theory of constraints is a methodology to help identify what might be hindering a company from obtaining its goal, and how to achieve the goal.

The Goal is a fictional account of a manufacturing plant which significantly improves its production capacity (and other measures) through the application of TOC.


Theory of Constraints (TOC)

Identify the system’s constraint/bottleneckExploit the constraint (squeeze the maximum

capacity out of it without altering capacity capability)

Subordinate everything else, don’t put improvement efforts into non-constraints, focus on bottleneck

Elevate if still needing more throughput (add more capacity to constraint)

Go back to Identify, (continuous improvement)


Back to Critical Chain

Production World – production throughput is like a chain. Production flows from one operation to the next.

Op 10 Op 20 Op 30 Op 40

• A chain is only as strong as its weakest link• The weakest link is the bottleneck operation• No value in improving other links of the chain

(e.g. Subordinate everything else)


Chain Physics

- If chained machines all working at full capacity, and capacity is equivalent on each machine, and if there exists any variance in production, the chain will never produce at capacity.

- The greater the variance, the less the production.- The longer the chain, the less production.

Op 10 Op 20 Op 30 Op 40

- Manufacturing managers/engineers attempt to mitigate the chaining effects


Critical Chain and Project Management

Current State of Project Management World – 1. Only way to protect the whole (project) is through

protecting the completion date of each step.2. Therefore, we pad each step with safety time.3. We then suffer from three mechanisms, when combined,

waste most of the safety time.a. Student syndrome (start as late as possible)b. Multi-tasking (switching between tasks without

completing)c. Delays accumulate, advances do not

4. Thus, projects tend to complete late.



Why Current State of Project Management?

Cause and Effect:• Wrong measurement, each task’s (or manager’s)

performance is measured to their specific task.• No incentive to finish early since re-budget of

time/dollars based on “last time” will result.• A delay in one step is passed to the next, while an

advance in one step is usually wasted before the next.



Project Management World – so what is the bottleneck operation in project management?

Ans. – the critical path.

2A,5

1 3 4 5 6 9 10

7

8

11B,8 C,15

D,12

F,8

E,10G,11

H,5

I,4

J,2K,8

L,14

M,5

N,5

0

0


Thus, TOC applies to project management where:• The bottleneck/weakest link of the chain is the

critical path.

Identify the critical pathExploit SubordinateElevateGo back to Identify,




critical path.

Identify the critical pathExploit the constraint – ensure the critical path is never compromisedSubordinateElevateGo back to Identify,

Critical Chain andProject Management


How do you Exploit the constraint?

One way in manufacturing:

Ensure the bottleneck operation is never idle by maintaining inventory in front of it.


X

Bottleneck Operation

Inventory


How do you Exploit the constraint?On the critical path:

Original:

With all safety moved to end of project:


Step 1 Step 2 Step 3 Step 4

Step 1 Step 2 Step 3 Step 4 Safety Buffer

Note, only 50% chance of finishing each task on time,Management must change way of thinking, i.e. OK to be late some times.



critical path.

Identify the critical pathExploit the constraint – ensure the critical path is never compromisedSubordinate – everything elseElevateGo back to Identify,



How do you Subordinate everything else?To the critical path:

Restate task times for non-critical steps, removing safety time and starting them such that safety is at the end.



Step a1 Step a2

Step b1 Step b2 Step b3

Feeding Buffer

Feeding Buffer


Impact of new way of approaching project management -



Step a1 Step a2

Step b1 Step b2 Step b3

Feeding Buffer

Feeding Buffer

Need new performance measures –• Performance of critical path (e.g. % completion of c.p.)• Measure provided by person working on current critical path

task, estimating number of days until finished• also monitor remaining days in feeder buffers (modify buffers

as actual times realized in preceding steps)• Use relative buffer consumption to synchronize priorities and

make early course corrections.



critical path.

Identify the critical pathExploit the constraint – ensure the critical path is never compromisedSubordinate everything else, Elevate reduce task times, Go back to Identify,



How do you reduce task times?

• Training• Improved methods / technology • Improved designs • Motivate employees• Provide incentives – reward early completion, penalize being late • Others?




critical path.

Identify the critical pathExploit the constraint – ensure the critical path is never compromisedSubordinate everything else, Elevate reduce task times, Go back to Identify, are there other constraints?



Is the critical path the only constraint? -


X Safety Buffer

X

X

Feeding Buffer

Feeding Buffer

Resource X in this case could cause all or some feeding buffers to become exhausted, would this cause all paths to become critical?

Hopefully not, must be a better way to manage.

XFeeding Buffer

Critical path


Call the resource constraint a critical chain? -


X Safety Buffer

X

X

Feeding Buffer

Feeding Buffer

This critical chain could be a longer path than the original critical path.

XFeeding Buffer

Critical path

Critical chain


Feeding buffers have moved before critical path -


X Safety Buffer

X

X

Feeding Buffer

Feeding Buffer

Still a problem for X, top two feeding buffers have X scheduled at the same time. What to do?

XFeeding Buffer

Critical path

Critical chain

Feeding Buffer


Feeding buffers have moved before critical path -


X Safety Buffer

X

X

Feeding Buffer

Feeding Buffer

XFeeding Buffer

Critical path

Critical chain

Feeding Buffer


Depot Maintenance

An outsiders view:• Depot Maintenance – Is it manufacturing or is it project

management? Each aircraft is viewed as a project.• Flow days – a key depot performance measure • Variability of Process Time –

• a goal of manufacturing is to eliminate variability• the nature of depot maintenance is to manage

variability• Critical Chain Management – uniquely positioned to

manage variability and help reduce flow days.


Depot Maintenance

An insiders view:• There is inherent variability in repair work making it difficult to

follow schedules.• There is competition for mechanics, support resources, facilities, and

other equipment within and across aircrafts – work waits in queue.• Unpredictable / over and above work cause schedule delays• Parts shortages cause delays. Some parts have long lead times.• Frequent priority changes forces workarounds and constant shifting

of resources (Multi-tasking)• Administrative delays (inspection reports, customer approval, etc.)• Carry over work from one area disrupts progress in subsequent

areas.• Operations checks and testing can result in rework that cause

schedule disruptions late in the project.


Conclusions

Critical Chain Management - explores why projects tend tobe late, and develops an interesting approach to mitigatingthis problem.

• Move safety to end of project and to feeding buffers• Manage feeding buffers• Remove multi-tasking

Depot Maintenance – more like project management thantraditional manufacturing.

• Manage variability, can’t eliminate.

Critical Chain Management – uniquely positioned to managevariability and help reduce flow days.

march 20, 2008 2008 dixie crow symposium, warner robins, ga slide 1 critical chain management -...

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warner robins

dixie crow symposium

project uncertainty

overall project

theory of constraints

industry experience

longest path