Linear High Touch Time: A New TOC Application

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1 Linear High Touch Time: A New TOC Application Presented By: Lisa Scheinkopf, Yuji Kishira, and Amir Schragenheim Date: June 4,

2 Standing On The Shoulders Process 1. Identify a giant, not a choopchick Intuition will guide you important enough subject for you 2. Identify the enormity of the area not addressed by the giant. Reality gives the signals that so much more can be done. You are aiming for a broader, not a more confined area than what was addressed by the giant. 3. Get on the giant s shoulders Gain the historical perspective - understand the giant s solution better than he did. 4. Identify the conceptual difference between the reality that was improved so dramatically by the giant, and the area untouched. 5. Identify the wrong assumption 6. Conduct the full analysis to determine the core problem, solution, etc. 2

3 1. Identify a giant, not a choopchick Intuition will guide you to an important enough subject for you PRODUCTION DBR PROJECTS CCPM 3

4 2. Identify the enormity of the area not addressed by the giant Reality gives the signals that so much more can be done. You are aiming for a broader, not a more confined area than what was addressed by the giant. PRODUCTION PROJECTS DBR CCPM 4

5 A Signal From Production In traditionally run plants touch time is a very small fraction (<10%) of the lead time. What happens when the production environment has touch times of 20% or more? This Instead of 5

6 A Signal From Projects This Instead of CCPM assumes highly complex networks with many chains of tasks processing in parallel, converging to few integration points. What to do when the structure of the work flow is much more linear? 6

7 A Signal From Informal Rules In each case, the traditional solutions brought significant improvement to the operations, yet We noticed some Informal rules were applied 7

8 3. Get on the giant s shoulders Gain the historical perspective - understand the giant s solution better than he did. Managing the flow with TOC Drum Buffer Rope (DBR) Simplified Drum Buffer Rope (sdbr) Critical Chain Project Management (CCPM) TOC Replenishment Buffer Management V, A, T, I Concepts of Flow POOGI 8

9 3. Get on the giant s shoulders Gain the historical perspective - understand the giant s solution better than he did. Managing the flow with TOC Production DBR Projects CCPM From original DBR To original sdbr With Load Control 9

10 4. Identify the conceptual difference between the reality that was improved so dramatically by the giant, and the area untouched. HIGH TOUCH TIME IN PRODUCTION ENVIRONMENTS I SHAPES IN PROJECTS ENVIRONMENTS 10

11 5. Identify the wrong assumption The nature of the buffer is something different for projects v. production. Buffer and production lead time are synonymous Rather, 11

12 6. Conduct the full analysis to determine the core problem, solution, etc The essence of the solution: 1. When on the right side of the U-Curve, cut the buffer in half. Recognizing touch time v lead time 2. Manage priorities according to buffer consumption Recognizing the shape of the flow 3. Report progress based on the nature of variability Completion v. estimated time remaining 12

13 1. When on the right side of the U-Curve, cut the buffer in half. Recognizing touch time v lead time Touch time The longest chain of time required for the actual processing of an item Buffer time The time allotted to compensate for variability in the environment In a typical production environment, touch time is <10% of the lead time <10% >90% Buffer In a typical projects environment, touch time is >40% of the project duration >40% >60% buffer 13

14 Management Attention Insufficient reaction time When touch time is negligible, then the buffer and the lead time are essentially the same length. Jams, Missed Priorities When the operation is on the right side of the U- Curve, cutting the lead time in half moves it to the plateau while still providing ample buffer. <10% >90% Buffer When touch time is not negligible, cutting the lead time in half may eliminate too much buffer, moving the operation to the left side of the U-Curve, providing too little time to reliably complete the work. >40% >60% buffer Normal disruptions Buffer size

15 Insights from CCPM CCPM recognizes the difference between touch time and buffer time. Instead of cutting the project duration by half, CCPM takes a different approach: Cut the task estimates in half Insert buffers which correspond to 50% of the sum of the task times in their respective project & feeding chains 15

16 Management Attention Insufficient reaction time Jams, Missed Priorities Reducing the buffers by half brings the operation from the right wall onto the plateau of the U-Curve <10% >90% Buffer <20% >80% Buffer >40% >60% buffer 65% 35% buffer Normal disruptions Buffer size

17 The Guideline When the operation is on the right side of the U-Curve, establish new, reduced lead times (time allotted from authorizing the operation to begin work until the time the work is expected to be completed and ready to be transferred to the client) according to Touch Time + 50% of the Existing Buffer In cases where the resulting buffer is less than 1/3 of the new lead time, increase the buffer accordingly. Freeze any work that is already released, but that is not yet within the release parameters governed by the new lead times. WARNING: DO NOT TRY TO BE MORE ACCURATE THAN THE NOISE. 17

18 Applying the Mechanism 3 products, each 60 days lead time Buffer = 80% Buffer = 60% Buffer = 40% 0d 60d After applying the mechanism LT reduced 40%, New Buffer = 67% LT reduced 30%, New Buffer = 43% LT reduced 10%, New Buffer = 33% 0d d 18

19 2. Manage priorities according to buffer consumption Recognizing the shape of the flow 19

20 2. Manage priorities according to buffer consumption Recognizing the shape of the flow Buffers provide the jobs with enough time to safely weather the variability which exists in the environment. The faster the buffer consumption, the higher the risk that a job will be completed too late to meet the company s commitment of on-time delivery or product availability. What can we learn from the standard approaches? 20

21 2. Manage priorities according to buffer consumption MTO CCPM Lead time consumed = buffer consumed. % buffer consumed priority MTA Inventory consumed = buffer consumed. % buffer consumed priorities Longest chain remaining v duration remaining = buffer remaining. Buffer consumption v longest chain completion priority 21

22 2. Manage priorities according to buffer consumption The linearity of the LHT environment guides us to a simple solution. Divide the buffer into thirds Buffer consumed priority Lead time remaining touch time remaining = buffer remaining. Buffer buffer remaining = buffer consumed. Buffer consumed buffer = % buffer consumed. 22

23 Example Lead time = 30 days Touch time = 9 days Buffer time = 21 days TT = 9d 6 steps, 1.5d each Buffer = 21d 0d 9d 16d 23d 30d Day 5 Day 15 Day 25 Lead Time Remaining Touch Time Remaining Buffer Remaining Buffer Time Consumed Buffer % Consumed 24% 47% 90% Priority Green Yellow Red 23

24 Example TT = 9d 6 steps, 1.5d each Buffer = 21d Day 5 TT Remaining 0d 9d 16d 23d 30d Day 15 TT Remaining 0d 9d 16d 23d 30d Day 25 0d 9d 16d 23d TT 30d 24

25 3. Report progress based on the nature of variability Completion v. estimated time remaining In most production environments, resources are conditioned to report only on completion of their respective step in the process. Touch time remaining = Estimated touch time of the steps (in the routing) not reported complete. In most project environments, resources are conditioned to report on both completion as well as estimated time remaining of their respective step in the process. Touch time remaining is = the current reported estimates of the active tasks plus the estimated touch time of the steps not yet started (in the project plan). 25

26 Don t Add Effort Where It Is Not Needed Typical production environments the waiting times are the main source of variability which consume the buffer. Typical project environments the task (touch) times themselves are the main source of variability which consume the buffer. Don t add effort where it is not needed Requiring resources to report estimated time remaining should be limited only to environments in which the touch times are highly variable. 26

27 Improved Reality FORGINGS From DBR to HTT to LHT Incorrect Priorities DDP Volume Management Attention Harmony PREFAB HOMES From CCPM to LHT Project Duration & WIP DDP & Quality Volume & Sales Management Attention Harmony 27

28 Some Lessons Learned When we face unexpected reality or simply a reality we want to improve even further, don t be upset, see the opportunity to improve our solution! The process gives us an opportunity to develop a deeper understanding and appreciation for what is already there. We can expand the base of TOC, which gives us ability to apply it better in different new applications. Thank you, Eli. 28

29 Standing on the Shoulders of Giants The Process Linear High Touch Time 1. The Giant DBR & CCPM 2. Area Not Addressed Operations that have high touch time but linear flow structure 3. Historical Perspective Buffer definition: difference between buffer and lead time; buffer management in the various applications 4. Conceptual Difference The co-existence of I shape and long touch times 5. Wrong Assumption Buffer and lead time are synonymous (in a production environment, they are the same length, but not synonyms) 6. Analysis & Solution NBR s of traditional solutions; Halve the buffer concept; Managing priorities via simple buffer consumption; touch time remaining 29

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