The goal is to change the rules that are affecting your ability to make MORE.  In my last post, I wrote about challenging the assumptions.  The supply chain or supplier strategy is a great place to start.

What about the material specification itself?  Most material specifications are established by a default rule of thumb established to minimize risk of failure.  The result is a conservative specification that will cover a wide swath of situations.  I seldom see material specifications done to maximize throughput.

What’s available to challenge?  Everything.  Dimensions, tolerances, material specifications, storage requirements, quality checks, etc.  Another place to look is deeper into the supply chain.  What about your suppliers’ suppliers?  What you challenge will be determined by what gives you the most productivity.

When we worked with a boom manufacturer, we found that the output of a particular type of boom was constrained (at all suppliers) by a worldwide scarcity of a key component.  This scarcity was about three links earlier in the supply chain.  We looked for a substitution.  Working with the engineering and supply chain teams at the supplier and the customer, we found another material, which was significantly cheaper, allowing them to purchase three times the amount of the new material for the same price as the old material.  With all the materials in full supply, the boom manufacturer was able to boost output tenfold!

Not only are the technical specifications open to challenge.  Your supplier management rules are open to question, too. Just like the engineers create conservative rules to minimize technical risk, it is common practice to make policies to minimize commercial risk.

Some common things we look at are: batching policies, supplier qualification, supplier selection (sole source is my favorite), price breaks on quantities, delivery frequencies, and more.  Often supplier selection is based on mostly on price, without consideration to supply risk.

When we worked with one supplier, we questioned a long established rule of restricting their purchases from any one supplier to no more than half the supplier’s total output.  This limitation was restricting their output as they were lacking the supplies to produce more.  This easy fix untapped the potential to quickly and dramatically increase supplies, and in turn the factory’s output.

Finding extra capacity is not rocket science, but it does require an eye on the process and a willingness to challenge what you’ve done in the past – sometimes an uncomfortable activity.  I enjoy it, though.  Eli Goldratt, my friend and mentor, said famously, “Sacred cows make excellent steaks”.  I agree.

Read how we sacrificed those sacred cows in the materials and supply chain and in turn, achieved great results in lesson 5 in our eBook, Achieving Top Performance Under the Worst Conditions: 7 Lessons Learned from a Disaster. 

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When our consultants find something blocking the process, we use a simple technique to find the hidden assumption(s).  We’re not challenging every assumption, just the ones that create situations that block us from where we’re going.  It does involve asking the question, “Why?”.  Sometimes we ask it 5 times.  But asking “why?” just tells us the “reasons”, not always the assumptions.

A couple of words about assumptions – we’re all familiar with the word game played when someone says “assume” (for those that aren’t aware of that, when you make an assumption, it makes an ass|u|me), but that’s not what I’m talking about here (although I do agree with that statement).  I think of assumptions as a person’s basic understandings of how things work.  This is useful for thinking in terms of cause and effect.  For example, the cause, “I kick you in the shins” will likely result in an effect like, “you will be angry”.  Not very hard, but the assumptions I make in this situation could be, “you don’t like being kicked in the shins” or “your feelings will be hurt by an attack on your person” (actually, this latter statement has another assumption, “when people’s feelings are hurt, they react with anger”.  Each of our processes has causes to create effects.  Sometimes, we don’t like the effects, so, if we want to change them, we should dig into the assumptions around these cause and effect relationships.

In a process, assumptions take the form of management rules (Why are we doing that?  We’ve always done it that way!), understanding of technical process (we have to put a 15 degree radius to allow for a subsequent step), quality requirements (inspection steps), or product specification requirements (dimensions or features).  These are baseline parameters of how the process functions and its boundary conditions.  Most of these are important and needed.  However, over time, these rules and requirements can become like barnacles on our process, no longer needed and slowing down the process.

Our goal is to find the assumptions that are erroneous.  An erroneous assumption is the rule, requirement, or boundary condition that is no longer required. (Why are we doing that?  I don’t know! We’ve always done it that way!).  The only way to find those assumptions is to zero in on the blockages and ask why certain requirements (the ones that are slowing you down) are necessary.

The process we use to find and challenge assumptions is to simply ask why and identify the assumptions that are no longer valid or could be made invalid.  Meaning, not every assumption is a fixed thing.  We can change things around.  Some are not valid in every situation – do we need to take this step for every product or just for specific customers?  Do those policies still apply in this situation?  Can I get the policy changed?  Can I find a different way to satisfy the requirement other than the one in place?

Take, for example, Pinnacle Strategies’ work during the Gulf Oil spill.  When we were working with boom manufacturers, our consultants went to several boom manufacturers to find more capacity.  The companies usually had rigorous specifications from their customers, as the quality requirements were support usage for many years.  However, we wanted as much boom as possible, in as short of time as possible, for a short burst of intensive work.  The companies were building heavy duty products designed to meet a wide variety of situations.  The boom that was needed was for a specific environment, with specific requirements, for a short period of time.  Some features could be left out, thus reducing the time to manufacture and thus releasing extra capacity to make more.

This is our experience over and over.  There is ALWAYS more capacity than you think.  You just have to do a little digging and challenge your assumptions.

Read more about how we achieved great results by challenging the assumptions in lesson 4 in my eBook, Achieving Top Performance Under the Worst Conditions: 7 Lessons Learned from a Disaster.

As always if, you have questions or comments please feel free to contact me by emailing me.

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In a more practical sense, if I’m a leader of an organization, how do I know my team is doing the right things?  If I’m a team member, how do I know what actions to take?

Every organization is formed for a purpose.  In order to achieve its purpose and goals, organizations develop around sub-organizations (functions) and processes that accomplish them.  These sub-organizations then have their own purpose and goals, for example; accounts payable’s goal is to ensure the bills get paid.  Presumably, each of these sub-organizations is in alignment with overall goals and objectives of the global organization.

As the organization becomes more complex, it becomes more challenging to maintain this alignment, so the organization establishes performance management systems to maintain alignment of purpose and activity among the constituent (local) organizations.  These systems are often referred to colloquially as “the measurement system” or “the metrics”.  Managers seek the relevant measurements to make decisions and drive appropriate behavior in the enterprise; whether to correct a course of action, direct a new course, or even stop.

The performance management system is the formal and informal process of measuring and responding to the organizational process to achieve its goal(s).   It creates and applies uniform standards, quantifying and managing process performance.

Here are a few things to think about.

Establish the standards.  Create a common benchmark of performance.  This can take the form of a database of work to be done, a common set of objectives, or even an agreed upon set of goals. If you don’t know what the objective is, anything will be acceptable.  So be purposeful and deliberate about determining your direction.  Essentially, the standard are the “why” of what is to be performed.

Know the process.  The process is the “what” of your process – the details that determine your progress towards success.  If you have never mapped the process or supply chain, now is the time to do it!   It’s essential to know the behaviors required and the results of those behaviors – you can’t measure what you can’t quantify.

Create decision gates. Now that you have the process mapped and can clearly articulate the steps towards the goal, you can identify where decisions need to be made.  Quantify the decision process – who can make what decisions and when escalation is required.

Identify the constraint. Now that the process is mapped and all steps are clear, you can see where the bottlenecks are and what is holding up the process or supply chain from moving faster – you can focus on the areas that are most critical.

During the oil spill in the Gulf of Mexico, BP built the largest civilian maritime fleet ever seen (over 14,000 vessels). In the haste of containing the spill, keeping detailed records were not a priority.  Equipment was rented and used with no documentation and boats were commissioned to clean oil with no record of their model or serial number.  This lack of communication and documentation became a big problem when it was time to decontaminate the cleanup vessels.  We employed these lessons to drive the process and completed a task in less than six months that was originally estimated to take years. These lessons worked in the worst conditions, imagine how they could help you now.

Read how we achieved great results by applying uniformed standards in lesson 6 in our eBook, Achieving Top Performance Under the Worst Conditions: 7 Lessons Learned from a Disaster.

Also, have a look at some of our thought leadership on performance management here.

As always if, you have questions or comments please feel free to contact me by emailing me.

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The problem with the “start early, finish early” approach is that when you’re dealing with several projects, everything starts early and the system becomes clogged.  The project management system looks like the freeways during rush hour (2 analogies in 2 paragraphs!).  The system becomes bogged down, slows down, and projects take longer and longer.

From a resource view, there’s a stack of work to be done.  How to choose the right task?  The one I enjoy most?  The one that we discussed in the project meeting today?  The small task I can wrap up before the weekend?  So many choices, each resource choosing the correct sequence.

Undoubtedly, the “wrong” work will be done.  Tasks will be started with incomplete information, resulting in starting and stopping, waiting, and rework.  The project team spends its time sorting through the piles of work for the resources, and then resorting as new information arrives.  Then the resources are forced to stop and start again, because the teams never quite get it exactly right.

The result?  A loss of productivity.  Increasing project lengths.  Expensive expediting efforts.  More management attention required.  Unhappy customers.  Unhappy people.

What can you do?   Certainly the synchronization task is complex when you have many projects, but you can clear the road a bit so you can see the way.  Manage and limit the amount of work in the pipeline.   Simple, yet difficult.  Still, it must be done.

Managing the WIP:

Reduces the multitasking.  With less work in the system, there is less sorting and resorting, less stopping and starting due to priority errors

Reduces management attention.  Less work, faster progress, no more managing the piles.

Reduces rework.  With less work in the system, attention can be turned to emphasizing clean starts

Reduces average project lead times.  Fewer queues, less wait time, more time spent on the project.

A couple things to keep in mind as you set your WIP level:

You can make gradual reductions; reduce by 25% if you’re worried about something bad happening.  I’d start a with 50% reduction.

Watch your resource engagement; sometimes there is work in the system you’re not even aware of, like customers calling your engineers or developers directly.

Make sure it’s clear who sets the priorities for work.  Controlling the release of new work into the system is both a capacity and priority management task.

To read more about the unlimited “progress” and other invisible threats to managers, read our new eBook Blindsided! Five Invisible Project Threats Successful Managers Must See.

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If bad planning is responsible for failure, it stands to reason that “good planning” should be the savior. And by “good planning,” conventional wisdom means “more planning”: more pages of tasks, more lines of specifications, and many, many more details.

But after 27 of years as an operations analyst and process consultant on some of the most complex production systems in the world (think automobiles, airplanes and off-shore drilling, for example), I know that good planning – at least as it’s commonly understood – is not the answer: it’s the problem.

The devil really is in the details

What goes wrong? Most planning is based on an earned value systems model of work breakdown structures that make it relatively easy to assess cumulative costs. But the granular level of detail that’s good for accounting is not so good for project managers. By nature, work breakdown structures are linear, hierarchical – they do not reveal (or account for) the dependencies or “hand-offs” among plan elements, the things that must be done before subsequent steps can be fulfilled. While “good” planning does define the work, it doesn’t define the relationships or – just as perniciously – it attempts to define all of them.

But relationships are precisely what a project manager manages. Excessive detail creates a needle-in-the-haystack situation that inhibits corrective action by obscuring the truly relevant. The more details in the plan, the more difficult it is for people on the ground – project managers and their teams – to make the on-the-fly adjustments that are absolutely necessary for successful implementations.

Just as no one would advise commencing a project without planning, I am not advocating planning without details. But I do believe in setting the right level of detail: only as much as an organization can manage. Much of the project detail should be defined in simple checklists and work instructions – and not much more. When the level of plan detail is appropriate, project teams can anticipate the consequences of any change in a given line item; when projects are over-planned, consequences are impossible to forecast and managers become incapable of responding effectively. They become (to borrow a metaphor) lost in the forest, incapable of finding the right trees. As problems arise, the project becomes susceptible to delays. The project team can’t see the right course of action. Deadlines are missed, and to compensate, project meetings become long, tedious affairs in which managers defend past actions to deflect blame. The planning everyone once praised as “thorough” is now exposed as “unmanageable.”

Forget “plans” and focus on “plays”

In reality, project problems are not a possibility, but an inevitability. Things go wrong, and the more “things” there are in a plan, the greater the likelihood that small failures will lead to larger ones. That’s why more planning, in itself, can never lead to timely and efficient project completion. Burdened with details, large plans become boa constrictors that squeeze the air out of any given process, suffocating hopes for success.

The path to success, therefore, is not more planning, but a focus on effective execution that anticipates problems and has the flexibility necessary for addressing them. Consider football: no amount of planning can dictate success on the field; in fact, excessive adherence to a plan would constrain a coach, not help him. What the coach needs is the ability to implement plays – intelligent execution – appropriate to the immediate situation on the ground in front of him.

In order to execute intelligently, the coach needs:

A clear view of the situation: What is core to the status of the project? Good coaches/managers make the work and the obstacles to progress visible. When the project flow is clear to the team, they are able to direct resource time and effort to that smaller subset of activities that make a meaningful contribution to the project goal.

Common goals: There is no room for players trying to pad their “stats” when you’re trying to win the game. Success means perfect alignment among all team members. In a project, there is no such thing as a “balanced” scorecard. Replacing tactical metrics (productivity by discrete tasks) with one metric concentrated on the overall output aligns everyone’s work with the ultimate project objective.

Collaboration: The team must agree on the general strategy of action and their role in it. Instead of pursuing individual agendas, the team cooperates toward the common goals through transparent communication of the project’s status, and the necessary next steps for moving the project forward.

Planning for dynamic action

Planning will not, and should not, go away. But good planning doesn’t mean more planning. More planning defeats its purpose by burying the project team in detail it cannot manage. If we are to replace frustration with success, then smart project plans must fit the size of the team that drives the execution of the plan and manages the uncertainties of execution. Planning is not an objective in its own right, the plan’s sole purpose is to enable and guide execution. Better planning anticipates problems and gives project managers the tools they need to take corrective actions as they are needed. By substituting dynamic execution for static adherence to overly detailed plans, project managers acquire the power to make workflows work.

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I’ve been exploring a new concept in project management. This approach blends lean concepts, visual management, and the theory of constraints. It’s a visual project management process that displays all the projects in the portfolio. I’m calling it ViewPoint.

What’s genuinely engaging about this approach to project management is its collaborative nature, involving project managers and senior decision-makers.  It’s a strategic tool that empowers everyone to identify bottlenecks and unblock project processes.  This isn’t just another iteration of what CCPM practitioners or PMI guys have been doing. It’s a fresh perspective beyond to-do lists, messaging capabilities, shared document editing, and calendars. It brings everyone together for a more efficient and effective project management experience.

ViewPoint allows our customers to effortlessly manage a portfolio of projects, ensuring everyone is on the same page—all the time. The key here is simplicity. We’ve learned that complex solutions don’t always matter as much as we think. Most of the benefits can be easily achieved with simple tools, dramatically facilitating adoption. Explicit language, straightforward technology, and easy adoption are the pillars of ViewPoint.

Here’s a link to the video describing the ViewPoint product and Visual Portfolio Board.

Some people look at this and think, “We can put up a board with swim lanes, too!”  Of course, they can.  But we’re finding the board is the “prop” – the enabler – of good project management behaviors: collaboration and teamwork, controlling work in process, reducing multitasking, priority setting, and resource allocation.  The board doesn’t do all that, but it allows it to be done!  It becomes the dashboard of the project management process.

I’m thrilled about this new development and the transformative results our customers are experiencing. The speed at which they’re seeing these benefits is genuinely remarkable.  I can’t wait to share more exciting updates with you soon.

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The results were great.  So we made a presentation telling our story.  Here it is on slide share.
FMC Critical Chain Project Management Implementation

The Article is can be found on the website by clicking on the link below
Pit Crews cut final assembly time in half, giving FMC Technologies “The Racer’s Edge.”

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A more general application of probabilistic planning also considers the range of project costs and returns. This evaluation focused on the range of outcomes for key project dates, such as first oil. Quantifying the range and probability of outcomes can aid project planning and decision-making.

Probabilistic scheduling provides a method to quantify the risk management process. Quantifying the impact of potential risks improves decision-making affecting the control of those risks, and potentially on the overall financial viability of the project. It specifically aids the upfront recognition of critical issues and proactive management of those issues.

So how does better planning result in shorter project lead times? 

First of all, there are fewer surprises.  Having done a proper job of evaluating project risk and task durations, you’re prepared to deal with the “murphys” that always occur during project execution.  Since you’ve already prepared, you can respond much quicker, without wasting time.

Second, a good project plan moves these potential risk events off the critical path (if possible!).  By moving risk events off the path that determines project delivery, eliminating disruption to your deliveries.  That doesn’t happen without planning.

Third, the tasks themselves are stripped of the safety that most project plans have, with all task safety aggregated at the end of the critical chain.  Saftey aggregation allows you to manage the safety as a project level item, rather than letting it be dispersed to every resource in your project.  That means that you need less, and the overall project duration is shorter with greater certainty of completion on time.

Ok, I have a white paper that explains this much more.  Get it here.

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This one hour presentation (with a half hour for questions) by me, Mark Woeppel, will present the core concepts of the CCPM method as it applies to three main areas of projects: execution, planning & project portfolio management.

Free for TOCICO Members
Non-Members $40
All proceeds go to TOCICO

To enroll, click here

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Mr. Sengupta developed a simulation program for project management that demonstrates when project managers fall into the patterns of behavior that worked in past projects generally did worse than less experienced project managers.

“The more experience we have, the more overconfident we get,” Mr. Sengupta says.

All of us fall into patterns of behavior.  This is especially true when that behavior was successful in the past.  How do we internalize this lesson and prevent behavioral inertia?

This has profound implications for managing change efforts, since successful managers believe they already have the answer.  In order to be effective, they must be made aware that the strategies of the past may not apply to the present.  It takes some internal honesty to question yourself.

If you’re managing a project, the buffer burn ratio is a reliable way to determine if your management strategies are effective.  If they are, you’ll see buffer recovery.  If not, you’ll see continuing consumption of the project buffer.  The good news is you’ll see it before the project is late – in time to discover your strategies are not working as you hoped.

The buffer burn ratio is essential to understanding the risk of completing the project on time.

Progress on a project is measured by the ratio of work to be completed to the amount of buffer remaining.  The ratio tells us when a project is in danger of not being completed on time.  For example, a project that has 100% of the work remaining and 100% of the buffer remaining has a ratio of 1:1; it’s on schedule. A project that has 80% of the work remaining and 40% of the buffer remaining has a ratio of 8:4; clearly, it’s at risk of not finishing on time.  This the Buffer Burn Ratio.

When tasks are delayed, they consume the buffer , potentially threatening the project completion date.  By identifying which tasks are creating the highest buffer burn ratio, the project manager knows which task to focus on right now. His efforts can then be directed to solving that problem, thus causing the entire project to move forward.

Read the full article about learning from the past at the Wall Street Journal here.

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