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. 

The post Reconsider Your Rules on Materials and Suppliers appeared first on Projects in Less Time - Mark Woeppel.

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.

The post Challenge Your Assumptions about the Process appeared first on Projects in Less Time - Mark Woeppel.

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.

The post Manage and Align Performance by Applying Uniform Standards appeared first on Projects in Less Time - Mark Woeppel.

Being on time begins with setting the expectation with the customer, promising delivery when it can actually be completed. Order delivery promising must reflect available capacity. Just as you manage cash, you must carefully manage the capacity of your business. There should be a process to commit the capacity, just as there is a process to write checks. Incoming orders are demands on your capacity account. Who is accountable for ensuring that the account doesn’t become overdrawn?

Sometimes, there will be demands that exceed your capacity. A rush order. An important deadline. An escalation and reconciliation process makes certain that both the customer and the business are satisfied. The order promising process is a negotiation to find the real needs of the customer and determine how to meet them profitably.

Quick Response

A necessary part of the promising process is the requirement for a quick response process. This process ensures that emergency orders are handled properly, and if possible accommodated. Customers have emergencies. They sometimes want a product faster than you normally produce it. How do you handle this/ You want to find as many ways as possible to say “yes,” but not every emergency is one to which you should necessarily respond. Is the rush order for someone who has never ordered from you before? Will this order be the beginning of a relationship or is it merely a one time request? Or, is the order needed by a regular customer who buys a significant amount? Should there be a difference in how you respond? does the customer service representative decide or is it up to the account manager? What if overtime is required? Who can authorize the expenditure? The scheduler? The plant manager? The responsibilities for answering these questions and the process for making the decisions must be spelled out and agreed on before you get the call. Otherwise, you may have one person making promises, but another is accountable for the results.

An escalation process keeps everyone honest; preventing you from saying “no” when you should say “yes.” Sometimes, the customer wants to have the product but plant capacity is already booked. What then? How is the customer’s voice going to be heard? The reconciliation process escalates the request to the next level of management.
 
Buffer Diagnostics Reveal Your Opportunities for Improvement

Buffer diagnosis is the process of reviewing your “almost late” order events and finding the resources that are causing these events.

Regularly gather snapshots of the state of your plant; your buffer status. Which parts are almost late? What resource is causing it? Compile these snapshots into your database. They become a documentary of your plant’s performance.

At least once a month, formally look at your film. Which resources are causing the most disruption? These are the ones that will become your next bottleneck – the one that affects your customer.

These resources are the ones eligible for improvement efforts. Without a targeting mechanism like buffer diagnostics, you are shooting in the dark.

My next blog post will finish up discussing the last key parts in building a reliable delivery system. Check out the full white paper titled “How to Build a Reliable Delivery Process” here.

The post How to Build a Reliable Delivery Process: Promise to be on Time  appeared first on Projects in Less Time - Mark Woeppel.

The entire team must participate to make delivery reliable. It isn’t just the operations or production departments. Perfect execution is a commitment for the whole organization.

Involving people begins with measuring the right things; setting the right expectations for performance. Management decides what the measurements are; what get measured gets done.

There seems to be so many different things that are measured, that it’s hard to pick one single measure that expresses progress towards the mission of the organization. This is analogous to a sports team that is unaware of the goal of the game. We agree that the main objective is to score more points that the other team. If we do, we win. The offense scores, the defense prevent scoring. Each subgroup has its own measurements, but the objective of the game is always foremost in player’s minds.

Reliable delivery – not efficiency – is the goal of production. The purpose of production is to make products for sale, not to spend as little money as possible. But, looking at the way some managers behave, you would think that the opposite is true! Think about a restaurant. Why should we have a kitchen in the restaurant? It makes the food customers eat. It’s the same in manufacturing. Why does a factory exist? It makes things to sell! The number one goal for the system is customer satisfaction.
  
Management must establish on time delivery (to commitment) as THE key performance indicator. Research demonstrates that this component of your service is the most important gauge of customer satisfaction. If you’re doing well here, you can be confident your customer satisfaction score will be high. It’s also an indicator of the stability of your order fulfillment system. Good on time delivery performance indicates a stable system, one that is under control. If you can’t keep promises, your system is out of control; it’s unstable.

The point of the measurement is to create a unity of purpose. What you measure tells the organization what is important. Without a common purpose, you team can never be unified.

My next blog post will focus on the order promising and buffer diagnostics parts of the system. Do you want to read ahead? Check out the full white paper titled “How to Build a Reliable Delivery Process” here.

The post How to Build a Reliable Delivery Process: Teamwork appeared first on Projects in Less Time - Mark Woeppel.

The Production Manager Owns Execution

Often, the responsibility for execution is split up among functions or it’s not clear who is responsible for the entire process. There can be no question of who is responsible for execution. Having a single person accountable for the ensure order fulfillment process provides leadership for the entire execution team. The production manager is responsible for executing the plan. In effect, he is the “Race Boss” of the order fulfillment process. The scheduler creates a plan that can be done; the production manager gets it done.

Focus During Execution

Since the planning is centered on the constraint resource (the drum), the main focus of production is ensuring this resource actually accomplishes the plan. Flawless execution of the schedule at the constraint resource (the drum) sets up the flow for the rest of the team, creating a synchronous current of work. If that resource executes its schedule properly, the other resources can achieve their schedule with little management intervention.

Even with a carefully thought out plan, people don’t always follow directions precisely – you have to watch for compliance. A critical part of controlling execution and early identification of problems is accomplished by monitoring schedule conformance.

Act Early

We know that even the best plans don’t always survive reality. When things don’t work, you have to do something! It’s amazing how many people watch the numbers, notice that performance is not satisfactory, but never act to correct it! Measurement is not enough. You have to respond to the measurement.

We talked earlier about inserting buffers into your schedules. Managing these buffers assures that exceptions do not become emergencies. By tracking the buffer remaining, you can get a fix on the remaining time in the system to compensate for variation, giving you an opportunity to create early action. The buffer management process show you the almost-late orders, providing you with an early warning so you can act early.

Release on Time, Deliver on Time

Many people think that early release means early finish. The the contrary, early release means late finish! Work released into the system too early creates confusion and chaos by causing people to do work that is not needed now, delaying what is really needed. While your resources are happily “getting ahead” on some work, the capacity that’s needed for more urgent work is consumed forever, creating overloads on downstream resources and the scramble to finish on time – not to mention the confusion of trying to figure out which order out of 30 is supposed to be worked on now, deciding wrong, and then finding that vital order when it’s inevitably too late.

Orders released too late are – well, late!

My next blog post will focus on teamwork, the third part of the six parts of the system. Do you want to read ahead? Check out the full white paper titled “How to Build a Reliable Delivery Process” here.

The post How to Build a Reliable  Delivery Process: Synchronized Execution appeared first on Projects in Less Time - Mark Woeppel.

Install a Master Scheduler
A single, master plan drives the Maximum Flow System and the planning process is the responsibility of the master scheduler; he/she owns the process. While that may seem like an obvious statement, to many, it’s not. Those organizations do not employ a master scheduler or even have a formal planning and scheduling process – at least a process in the sense of a rigorous series of steps with checks and balances. A master scheduler manages and controls your organization’s capacity in the same way your controller manages your bank account. He or she writes “checks” against the capacity “balance” and ensures the customer needs can be met without overdrawing the account. Your capacity is as valuable to the business as your cash. Someone must be responsible for monitoring and managing this resource.

Make the Schedules Real
The master scheduler must create a realistic schedule, one that can be accomplished, not a wish list or a club to beat up the plant. While that also seems obvious, in many companies and organizations the schedule is used as a club to point out the shortcomings of production, saying in effect, “If production would follow the schedule, everything would be fine!” Equally ineffective is the schedule presented as a wish list, “Here is everything we have promised, try to get everything out.” Having a clear plan that has credibility is critical to driving execution behavior.

The schedule is a statement of the strategy; a “best” basis from which to execute; the strategy to win.

Drum-Buffer-Rope (DBR) gives you an edge in maximizing flow and productivity. Furthermore, DBR schedules are very reliable. The reliability of DBR schedules are what make them useful for creating a realistic model of execution and a reliable tool for decision making.

The key to the reliability of the schedule built using DBR is its focus on the main bottleneck resource of the system and its built-in protection against common-cause variation (buffer). It doesn’t try to plan every resource interaction in the system, so the plans it produces are much more reliable.

The planning process itself is also simplified. Since the bottleneck determines overall system capacity, planning is centered on that resource only, providing a simple plan that models the entire process.

Protect Deliveries with Buffers
Time buffers protect the delivery date; they are shock absorbers that protect the plan from process variation. Just as shocks on the heels of running shoes absorb the variations in the running service, time buffers absorb the normal variation that exists in every process.

Some people don’t like the idea of adding time buffers to the plan –  they perceive it as waste. However, time buffers are a necessary safeguard against late deliveries. Don’t skimp on them by trying to be “Lean”; the goal of your order fulfillment process is to make the customer happy not efficient. Demonstrate that your order fulfillment process is under control by maintaining high delivery performance, then work on improving the process.

Time buffers aren’t just added randomly to any resource or area; they must be added to strategic locations in the process. First, buffers protect the drum resource and this, the output of the entire process. Second, a buffer protects the due dates of the orders. This assures that all orders are protected from variation.

My next blog post will focus on synchronized execution, the second part of the six parts of the system. Do you want to read ahead? Check out the full white paper titled “How to Build a Reliable Delivery Process” here.

The post How to Build a Reliable  Delivery Process: Planning appeared first on Projects in Less Time - Mark Woeppel.

Install a Master Scheduler
A single, master plan drives the Maximum Flow System and the planning process is the responsibility of the master scheduler; he/she owns the process. While that may seem like an obvious statement, to many, it’s not. Those organizations do not employ a master scheduler or even have a formal planning and scheduling process – at least a process in the sense of a rigorous series of steps with checks and balances. A master scheduler manages and controls your organization’s capacity in the same way your controller manages your bank account. He or she writes “checks” against the capacity “balance” and ensures the customer needs can be met without overdrawing the account. Your capacity is as valuable to the business as your cash. Someone must be responsible for monitoring and managing this resource.

Make the Schedules Real
The master scheduler must create a realistic schedule, one that can be accomplished, not a wish list or a club to beat up the plant. While that also seems obvious, in many companies and organizations the schedule is used as a club to point out the shortcomings of production, saying in effect, “If production would follow the schedule, everything would be fine!” Equally ineffective is the schedule presented as a wish list, “Here is everything we have promised, try to get everything out.” Having a clear plan that has credibility is critical to driving execution behavior.

The schedule is a statement of the strategy; a “best” basis from which to execute; the strategy to win.

Drum-Buffer-Rope (DBR) gives you an edge in maximizing flow and productivity. Furthermore, DBR schedules are very reliable. The reliability of DBR schedules are what make them useful for creating a realistic model of execution and a reliable tool for decision making.

The key to the reliability of the schedule built using DBR is its focus on the main bottleneck resource of the system and its built-in protection against common-cause variation (buffer). It doesn’t try to plan every resource interaction in the system, so the plans it produces are much more reliable.

The planning process itself is also simplified. Since the bottleneck determines overall system capacity, planning is centered on that resource only, providing a simple plan that models the entire process.

Protect Deliveries with Buffers
Time buffers protect the delivery date; they are shock absorbers that protect the plan from process variation. Just as shocks on the heels of running shoes absorb the variations in the running service, time buffers absorb the normal variation that exists in every process.

Some people don’t like the idea of adding time buffers to the plan –  they perceive it as waste. However, time buffers are a necessary safeguard against late deliveries. Don’t skimp on them by trying to be “Lean”; the goal of your order fulfillment process is to make the customer happy not efficient. Demonstrate that your order fulfillment process is under control by maintaining high delivery performance, then work on improving the process.

Time buffers aren’t just added randomly to any resource or area; they must be added to strategic locations in the process. First, buffers protect the drum resource and this, the output of the entire process. Second, a buffer protects the due dates of the orders. This assures that all orders are protected from variation.

My next blog post will focus on synchronized execution, the second part of the six parts of the system. Do you want to read ahead? Check out the full white paper titled “How to Build a Reliable Delivery Process” here.

The post How to Build a Reliable  Delivery Process: Planning appeared first on Projects in Less Time - Mark Woeppel.

Despite the advances in information technology and systems, most plants manage the process of prioritizing and managing the production of customer orders as if it were an art, approaching the task as a craftsman would, rather than treating order fulfillment systemically, using a robust process to manage and control production.

Rarely is the order fulfillment process treated as a process unto itself, with sequential steps and appropriate controls. Instead, order fulfillment is treated as an independent group of production steps, delegated to the resource owners (the plant) who do the work. Typically, they have little incentive to deliver on time, but rather, their incentive is to be “efficient”. As a result, the important task of improving on time delivery is an afterthought in process improvement efforts. In the end, orders are thrown over the “wall” from sales function to the production function, like hand grenades that might explode into a product that satisfies the customer. The result is chaotic efforts, late deliveries and unhappy customers.

The Maximum Flow System

The next few blog posts introduce the Maximum Flow System, which results in every order delivered on time, in less time, with minimal management intervention.

The Maximum Flow System is a set of tools and processes to schedule and manage your order fulfillment efforts that involve planning, management, and ongoing improvement. It results in:

• 20% increase in throughput  
• 25% shorter lead times  
• 15% more sales 
• 20% more cash flow every month 
• Improved labor productivity of 15% or more 

The Maximum Flow System causes people to synchronize their day to day efforts towards the delivery requirements of the customer, which results in on time deliver of the customer’s order, with less effort and management intervention.

The system has six parts: 
• Planning  
• Synchronized Execution  
• Teamwork 
• Order Promising 
• Buffer Diagnostics 
• Sales & Operations Planning  

Read a testimony below from Bob who used the system to transform his process.

“The beauty of the changes we have made has been that it was accomplished with a low tech common sense approach that yielded nearly immediate results of a magnitude I would not have thought possible. Two year increases in billings of 28% and 40%, with increases in our bottom line of five fold, and three fold. In short, the process has totally changed the look and feel of our business, and made it a better place to work.”
Bob Page, President, Graphics Systems

My next blog posts will focus on each of the 6 parts of the system. Do you want to read ahead? Check out the full white paper titled “How to Build a Reliable Delivery Process” here.

The post How to Build a Reliable Delivery Process appeared first on Projects in Less Time - Mark Woeppel.

Many engineering projects suffer from the same problem.  In a hurry to start, we begin the work as soon as it appears on our desk. But too often, the task takes longer because we don’t have everything to finish.  Worse, we don’t know we can’t finish (who knew we were out of drywall anchors?) either because we didn’t check or we didn’t fully unpack the task before we started.

False starts are worth addressing because of what the do to the workflow.  Multiply the starting and stopping effect by the quantity of your engineers, designers, drafters, buyers, etc., and you’ll see the delays and rework cascading across all of your projects.

It’s such an obvious thing, isn’t it?   But what’s obvious and sensible is not what we find in the workplace.  The reason – especially in knowledge work – is that it’s difficult to incorporate sensible and obvious into a coherent system of project management.

Most people don’t see it a problem, just a fact of life.  From a project systems point of view, it’s hard to see that false starts is the cause of many of your project problems:

Loss of Momentum: My previous post discussed the problem with too much work in process.  False starts exacerbate the effects – false starts inflate WIP even worse, it can’t move!

Rework:  Without the full kit of information to finish, tasks are often completed incorrectly.  Going back and redoing the work takes time and consumes additional resources, putting other work behind schedule and impacting not only that project, but also potentially the other projects that use those resources.

Extra Costs: Doing it twice or three times.  Using resources more and longer than you had planned to.  This time and those resources have to be purchased.  Working overtime to catch up.  Temporary workers.  Tiger teams. Not free.  Not planned.

False starts are much more than a nuisance; they are a systemic problem affecting your entire project management process.

What to do about it? First, make a decision.  No task starts unless it can finish.  This changes the emphasis in the organization from keeping busy to preparing to succeed.

Next, resource the preparation activity.  Someone has to be accountable for full kit and clean start, someone has to check that the work is ready to start.

Then, focus on identifying what is needed to finish a task.  That in itself will shift your team’s thinking, give some thought to establishing hand off criteria; determining when it is good enough to say “done”.

In our work with project teams, we see false starts often: in projects, in manufacturing.  For example, at one manufacturer, shortages to final assembly were high and the receiving department didn’t want to stop the line. Crews were constantly deployed out of position, working overtime, crowding stations, creating rework and scrap.

By eliminating the shortages, the clean start, the line accelerated and overtime declined substantially.   You can read more about this case here.

Although the example is of a manufacturer, the concept applies to any workflow.  The practice of a clean start with a full kit is so important to overall project performance that it has become central to our project and workflow transformation engagements.  It moves teams from merely being busy, to being effective.  It changes the way they look at their work.

It’s a simple thing you can do that will transform your portfolio performance.  Decide.

Read more about the false starts in our eBook Blindsided! Five Invisible Project Threats Successful Managers Must See.

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