Oded Cohen_CCPM_10 TOCPA_Feb 2014_India

10th International Conference of the TOC Practitioners Alliance - TOCPA

Feb 21-22, 2014 Noida, India

10th International Conference of the

TOC Practitioners Alliance - TOCPAwww.tocpractice.com

Advanced Issues of CCPM

Oded Cohen TOC Strategic Solutions, Israel22, February 2014


Oded Cohen

Oded has over 35 years of experience in developing,teaching and implementing TOC methodology,solutions and implementation processes workingdirectly with Dr. Goldratt all over the world. Among thecountries to which Oded brings his expertise are theUSA, Canada, Japan, India, China, the UK, Poland,Russia, Ukraine, Colombia, Chile, Peru, Turkey andmany others.

Oded has authored multiple TOC articles andcontributed to numerous TOC books.

Oded in the is the author of Ever Improve A Guide toManaging Production the TOC Way, published in June2010. Oded co-authored the book Deming & Goldratt:The Theory of Constraints and the System ofProfound Knowledge The Decalogue.

Together with Jelena Fedurko Oded has co-authoredthe book Theory of Constraints Fundamentals.

Oded is International Director of TOC StrategicSolutions Ltd and Founder and Co-President ofTOCPA.

[email protected]


Introduction the U Shape and CCPM

Direction of the solution - Managing Flow the TOC Way

Time Buffers

The General Structure for the CCPM Solution

Advanced topics in Planning

Advanced topics in Execution

3

Contents


Introduction

Practitioners raise practical issues along the lines of:

How to deal with specific situations?

Issues that deal with technicalities as well as managerial and human

interaction

Where do we find the answers?

The beauty of the TOC methodology is that every issue associated with

the solution has its own logical place :

either in the What the knowledge that is captured by the

U-Shape

or in the How - which is captured in the procedures and the

implementation plans.

Advances issues of CCPM


TODAYTHE PAST THE FUTURE

TIME

P

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E

CURRENT LEVEL

TARGET LEVEL

The Managerial ChallengeImprove the performance of the system

There is a strong belief that the system can perform better up to the Target Level

TARGET LEVEL

The GAP


Improvement Solution

Low Performance

Measurements

Low Performance

Measurements

What to Change?

Which parts of the

system have to

go!

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High Performance

Measurements

High Performance

Measurements

What to Change

to?Which new parts must

be introduced

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Current SystemStopped/Replaced

Current System

Stay

ProposedSolution

New

Improved performance

Understanding the problem Developing the solutionPIVOT


Understanding the ProblemCurrent Reality

Core Problem

A conflict diagram - Core Cloud

Core Problem

A conflict diagram - Core Cloud

DD

DDCC

BB

AA

D

Take

corrective actions

that compromise

project budget

commitments A

Run projects

successfully

B

Ensure the project

is on-time

and in full

(according to specs)

C

Protect budget

commitments

D

Do not take

corrective actions

that compromise

project budget

commitments


The Direction of the Solution:Use the TOC Pivot to Better

Manage the Flow

Focus-Flow

PIVOT

TOC


The TOC Pivot

Managing the TOC Way:

The Basic Assumptions The Flows within the system The Constraint Types of Constraints Managing through the Constraint The Five steps of Focusing

PIVOT

TOC


The Flows of a

Commercial Business

Process flow $Goal units

Management / Workforce

The Goal: To make money now and in the future

InformationFlow

DecisionsFlow

Blocking factor

PIVOT

TOC



CONSTRAINTS factors or elements that determine

how much the system can accomplish

The GAP

Block

Lift

What prevents us from

achieving the goal?

PIVOT

TOC


The TOC Pivot Managing Constraints

PIVOT

TOC


The

GAP

Block

Lift

What is the constraint of the project management?When does the system create value for the goal of making more money?

The shorter is the time to complete the project the better!At the completion of the project Throughput is generated and money invested is starting to be returned!Conclusion: Projects have the TIME constraint.


Flow is characterized as dependent activities (tasks) coupled with statistical fluctuations

The TOC Way for managing Flow is by using Buffers for Planning and Buffer Management for controlling and monitoring the Execution of the plans.

A TOC Buffer A mechanism to absorb statistical fluctuations as well as to provide management with early signals that the process is in danger of going out of control (and hence are under threat of not achieving the goal/purpose of the system).

Please note contingency is not a TOC Buffer!13

Managing Production Flow

the TOC Way


Buffer Management a mechanism that informs management about the true status of the flow though the continued update of the buffer situation as compared with the plan.Buffers are used during the execution are used for:1. Setting up the priorities for assigning resources to perform

jobs 2. Prompting recovery actions to ensure enough buffers for the

rest of the flow3. Proper sizing of the buffers through Dynamic Buffer

Management or managing PLT Production Lead Time4. Identifying reoccurring problems in the flow and eliminate

themBuffer management is always oriented to the future.

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Buffer Management


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TOC Direction of Solution

CCPM Critical Chain Project Management:

The TIME constraint of the project is

presented through the Critical

Chain the longest chain of

dependent activities. Managing

the project through the CC is

geared to finish the project in a

safe and quick way

CCPM Critical Chain Project Management:

The TIME constraint of the project is

presented through the Critical

Chain the longest chain of

dependent activities. Managing

the project through the CC is

geared to finish the project in a

safe and quick way

TOC direction of solution



Process flow Goal units

Management / Workforce

InformationFlow

DecisionsFlow

1

% Chain Complete Production/Operation Buffer

FGBuffers

InformationFlow

Project Buffer

Managing the FLOW


A Buffer that it measuring units of timeThe time buffer is added at the end of a chain of tasks.Project Buffer at the end of the Critical ChainFeeding Buffer at the end of a chain that integrated into the critical chain

Time Buffer For CCPM

Feeding Buffer - FBProject Buffer - PB

W16

B10 M16 C20G10

M16

Over 100%

Buffer Consumption

Full Buffer Full Buffer

Buffer Consumption

Project Buffer FB


The general structure of a TOC Solutions for Managing Projects


The General Structure of

TOC CCPM Solution

Project Planning

Injections 2-4

Mindset:Customer orders

are the Prime Driver the Drum

Injection 1

Tactics: Project Organization is on CCPM

Project Execution Control

Injections 5-9

Strategy:

The Project is On Time, In Full & Within Budget

PlanningSetting up the System Execution Control


DE

Inj

Injection Flower

IPImplementation

Plan

The Solution Design

What

HowProcedures &

Implementation Plan

Inj -Injection (essence)

UDE Undesirable Effect

DE Desired EffectNBR

Negative Branch

Reservation


TOC InjectionsTOC Injections

Low PerformanceLow Performance

UDE

CCPMCCPMPIVOTTOC

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Existing Feature

UDE

Existing Procedure

Understanding the Injection


Overview of the TOC Solution for Project Management

CCPM


Tactics:The Project organization implements Critical Chain project management

Mindset:

Customer orders

are the

Prime Driver

the Drum

Planning

Injections 2-4Execution Control

Injections 5-9

TOC Solution for

Single Project Management

CCPM-Injection 1 Achievement of the delivery commitments is

established as a Prime Measurement for

managing project environment

PlanningSetting Up Execution Control

Commitment & Measurements


Tactics:The Project organization implements Critical Chain project management

Planning

Injections 2-4Execution

Control

Injections 5-9

CCPM -Injection 4

Buffers are inserted

in strategic points

CCPM- Injection 2

Project Planning Diagrams are in place

with tasks resourced and estimated for

duration (while estimates of durations

are challenging but achievable)

CCPM-Injection 3

Critical Chain is

determined through

resolving resource

contention

Mindset:

Customer orders

are the

Prime Driver

the Drum

Injection 1

TOC Solution for

Single Project Management

Project Plan BuffersCritical Chain


Managing the Project Planning

The TOC way

What does it mean?

Managing Projects through CCPM means that project managers handle the planning phase of the project in a different way (to what they have done until now)

There are three parts to the planning procedure containing:

Parts that stay untouched Parts that are removed (*) New parts that are introduced

(*) Procedures -the formal and the informal ways that are used during planning

Current

SystemStopped/

Replaced

Current

System

Stay

ProposedSolution

New

Improved

performance



The TOC way

Parts that have to be removed

Project Management is about managing the flow of the project and bringing it to the successful completion (time, money and specifications)

Current

SystemStopped

/Replace

d

Current

System

Stay

ProposedSolution

New

Improved

performance

The specs are the responsibility of the task performers and their organization (under the resource manager or subcontractor)

The money aspect is subject to the internal processes and procedures of the company (SOP).

The TOC way suggest that the project manager should focus on the time aspect of the project.

Hence the project plan should be devoted only to managing the time!


Project Planning the TOC way

Parts that have to be removed/stopped

The project plan is not for: Planning resource load Budgeting Controlling the pay to subcontractorsIt is just for managing TIME!

Current

SystemStopped

/Replace

d

Current

System

Stay

ProposedSolution

New

Improved

performance

Therefore: Task duration is the estimation elapsed time from start to

completion. Task duration not less than 1 day and not more than 5% of

the project length. Project plan is not To Do List every task is for concrete

deliverable. Number of tasks in the project should be less than 300. No fractional resource, no team, no specific resource just

skills, enough capacity for the majority of resources Few CCR if at all!


Criteria for a Good Project Plan

1. Providing financial benefit by the successful completion of the project on time, within budget and according to the promised specification the project generates Throughput for the contractor of the project.

2. Realistic the plan does not contain conditions that are known to be unrealistic (such as resource loading over 100% of available capacity).

3. Immunized against disruptions (Murphy and uncertainty).

Injection 1

Injections 2-3

Injection 4


The TOC way


The quality of the Project Plan:

The quality of the project plan is critical for the implementation of the planning phase.

In reality any mistake in the planning is caught at the execution phase. However, correcting the mistake are expensive.

The plan must reflect the views of the key stakeholders of the project.

Technically the project should go through rigorous check to ensure the structure is sound and is ready for identifying Critical Chain and applying the Buffers.

Managing the Project

Planning the TOC way


CC Pulse project evaluation

Before planning phase CC Pulse evaluates the

project network.

Problems highlighted in red text must be fixed

before next step.

Problems highlighted in bold text are

recommended to be fixed.

Project Planning

Example


Injection 2 Project DiagramsNew specifications Existing project plans are subject to rigorous logical checking and ambitious time estimations.

Injection 3 Critical Chain New conceptReplacing critical path of the traditional project management with Critical Chain removing resource contention.

Injection 4 Buffers New conceptConscious and open provision for additional time to protect from uncertainty.

Planning Injections 2-4

TOC Injections

TOC Injections

Low Performance

Low Performance

UDE

TOC Direction of solution


PIVOT

TOC

Existing Feature

UDE

Existing Procedure

Planning Injections are NEW features of project management


Execution ControlInjections 5-9

Tactics: The Project organization implements Critical Chain project management

CCPM-Injection 8

Buffer penetration reasons are

reviewed periodically for POOGI

CCPM-Injection 5 Tasks are performed

according to the status of their

corresponding buffers through using Buffer

Management

CCPM-Injection 6Resource

availability is monitored in

anticipation of a new planned

task

CCPM-Injection 7

BM for recovery

actions is in place

CCPM-Injection 9Resources

are monitored

as potential Critical

Resources

TOC Solution for Single Project Management

Look ahead CCRsPOOGIRecoveryReport & priority

PlanningInjections 2-4

Mindset:Customer orders

are the Prime Driver the Drum

Injection 1


Criteria for a Good Execution Control

1. Priority the process of assigning resources should be linked to the overall importance of the project and its own progress.

2. Recovery the execution processes direct management in taking actions that bring projects to be back on course for on-time completion.

3. POOGI - the system provides statistics to enable management to continually learn and improve planning and execution control.

Injections 5-6

Injection 7

Injections 8-9

Managing the Project Execution

The TOC way


Injection 5 Resource assignment based on buffer penetration New concept

Priority is given according to the predicted completion of the project as compared to the status of the other projects.Injection 6 Monitoring resource availability New ConceptProject managers get early warning about the coming tasks to ensure that the tasks can start without delays.

Execution Control Injections 5-9

Execution Control Injections are NEW features of project management

Injection 7 Recovery actions early enough New concept

Managers in the project get assessments of the project completion and prompt to take special

unplanned actions (affordable and not expensive) to reduce the risk of the project not

completing on time.

Injection 8 Statistics for continuous improvement New concept

A formal method to facilitate systemic learning through the use of statistics on blockages to

point management to areas that can improve future projects.

Injection 9 Critical resources New approach

Once certain resources are identified to be obstructing the flow of projects,

a special attention is given to properly utilizing and managing them.

TOC Injections

TOC Injections

Low Performance

Low Performance

UDE



PIVOT

TOC

Existing

Feature

UDE

Existing Procedure


DD DD

CCBB

AA

TOC InjectionsTOC Injections

Criteria for good solutions:- Improve performance

measurements of the function- Improve performance of other

functions - Improve the company bottom-line

TOC Detailed Solution Design

Low Performance Measurements

Low Performance Measurements

UDE

UDE

UDE

UDEUDE

UDE

High Performance Measurements

High Performance Measurements

DE

DE

DE

DEDE

DE



NBRs

PIVOTTOC

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Documents

Oded Cohen_CCPM_10 TOCPA_Feb 2014_India