the toc centre of australia
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The TOC Centre of Australia. Resource Optimisation Using Critical Chain Buffer Management in the Multi Project Environment Presented by: David V Hodes Tel: 02 9293 2844 Mobile: 0409 789 034 - PowerPoint PPT PresentationTRANSCRIPT
© 2000 The TOC Center of Australia Pty Ltd 1Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
The TOC Centre of Australia
Resource Optimisation Using Critical Chain Buffer Management in the Multi
Project Environment
Presented by: David V Hodes
Tel: 02 9293 2844
Mobile: 0409 789 034
Fax: 02 9315 5891
E-Mail: [email protected]
www.tocca.com.au
© 2000 The TOC Center of Australia Pty Ltd 2Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
The TOC Centre of Australia Product Suite
© 2000 The TOC Center of Australia Pty Ltd 3Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
Critical Chain Projects
© 2000 The TOC Center of Australia Pty Ltd 4Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
Some Critical Chain Results
• The first time out, we took 26 days out of a 71-day hypermarket re-fit, a 37% increase in capacity
Matador Refrigeration
• The industry standard to get the plant up and running to 90% capacity is about 46 months. The plant was recently completed and is up to 90% production in 13 months
Harris Semiconductor
• We succeeded in dropping our average turnaround time per aircraft visit from three months to two weeks…
Israel Aircraft Industries
• We originally scheduled to take 13 months to deliver – and the team did it in six months
Honeywell DAS
© 2000 The TOC Center of Australia Pty Ltd 5Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
The Idea Factory
The reward
The Project
The Market
The Idea Operations
© 2000 The TOC Center of Australia Pty Ltd 6Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
The Cash Flow Of An Idea
On time
$
TimeLate
Extra cost
Market follower pricing
disadvantage
Trapped resources
Early
Monopoly advantage
Market leader pricing
advantage
Cost reduction
The next new idea
Freed resources
© 2000 The TOC Center of Australia Pty Ltd 7Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
When Ideas Become Projects
• They are late
• They are over budget
• They frequently change in scope
• Standish Group (www.standishgroup.com )
• 30% of projects canceled before finished
• 75% of completed projects are late
• Average cost overruns are 189%
• Average time overruns are 222%
© 2000 The TOC Center of Australia Pty Ltd 8Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
What About The Measures?
• “Show me how you measure me, and I’ll show you how I perform. Measure me in an illogical way, and don’t be surprised if I behave illogically”
Dr Eli Goldratt
• Is the goal task conformance or project performance?
© 2000 The TOC Center of Australia Pty Ltd 9Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
Global Versus Local Optima
• What we want to do is:• Finish projects on time• Finish projects on budget• Finish projects on scope• Shorten project lead
times• Finish more projects
• What we do is:• Manage to finish tasks
on time• Measure resources on
utilisation• Micromanage task flow• Detailed risk analyses• Detailed specifications
© 2000 The TOC Center of Australia Pty Ltd 10Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
Uncertainty Is At The Heart Of The Problem
• Vendor performance is unreliable
• Required tasks are not fully known
• Time to complete any given task varies
• Delivery of needed tools, equipment, and
material is uncertain
• Resource availability cannot be guaranteed
© 2000 The TOC Center of Australia Pty Ltd 11Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
The Issue of Duration Risk
10% probability
50% probability
95% probability
BC is not necessarily 2xAB
Task Duration
© 2000 The TOC Center of Australia Pty Ltd 12Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
How Risk Relates To How We Are Measured
When we put safety into each task…
• Projects seem to be longer than necessary • Parkinson’s Law: work expands to fill the time available• Tasks seldom finish early • “Student syndrome” prevails: 2/3 of work done in last 1/3 of time
Task start Task end
Activity
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The Effect Of Multi-tasking
© 2000 The TOC Center of Australia Pty Ltd 14Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
Unlevelled Schedule
© 2000 The TOC Center of Australia Pty Ltd 15Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
Load to Capacity of C
© 2000 The TOC Center of Australia Pty Ltd 16Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
The definition of the Critical Chain is the longest set of dependent steps, taking task precedence and resource contention into
account.
Critical Chain
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Identify Critical Chain
Load levelled (finite capacity)
Critical Chain identified
© 2000 The TOC Center of Australia Pty Ltd 18Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
Managing The Critical Chain
Shrink the times to 50% probability of completion – aggregate protection in the feeding and project buffers
Σ = Buffer
© 2000 The TOC Center of Australia Pty Ltd 19Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
Types Of Buffers
Project buffer: • Placed before the customer, to protect our
commitment to the customer (the external constraint)
Feeding buffer: • Placed at each point where non-critical tasks join
the critical chain, to protect against precedence conflicts on non-critical tasks
© 2000 The TOC Center of Australia Pty Ltd 20Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
CC, Fb and Pb
Project buffer task 13
Feeding buffers tasks 3 and 8
© 2000 The TOC Center of Australia Pty Ltd 21Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
Critical Ratio
• Critical Ratio =work to completion
time to completion
(work+buffer)
© 2000 The TOC Center of Australia Pty Ltd 22Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
Scenario 1
Status date represented by red line (8am Sunday 4th November)
Purple bars represent projected start and finish times
Project buffer (Pb) penetrated
Feeding buffer (Fb) task 8 penetrated
Resource buffer (Rb) tasks 5 and10 scheduled against expected start
Task 4 most critical to work on, as a delay here causes immediate Pb penetration
© 2000 The TOC Center of Australia Pty Ltd 23Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
But How Do We Manage The Complex, Multi-Project Environment?
Project Portfolio
Portfolio Selection
The pacing resource
Individual Critical Chain
Projects
Buffer management policies
Project PipelineProject PipelineProject PipelineProject Pipeline
•Analyse•Resource•Decide
© 2000 The TOC Center of Australia Pty Ltd 24Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
The Classic Multi-Project
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Classic Multi-Project Statistics
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TOC: Critical Chain, Drum and Buffer Management
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TOC Statistics
© 2000 The TOC Center of Australia Pty Ltd 28Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
Test Results
© 2000 The TOC Center of Australia Pty Ltd 29Critical Chain Overview – AIPM 2003 MktgCCSEAV01grh 0208010 2001 The TOC Centre of Australia Pty Ltd
So What’s the Choice?
• You manage the constraint…
•Or the constraint manages you