how to reach the highest efficiency on state (country) level. oded cohen
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Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
How to Reach the Highest How to Reach the Highest Efficiency on State (Country) Efficiency on State (Country)
Level Level
Oded CohenOded Cohen Vilnius, September 2012Vilnius, September 2012
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Oded Cohen Oded has nearly 35 years of experience in developing, teaching and implementing TOC methodology, solutions and implementation processes working directly with Dr. Goldratt all over the world. Among the countries to which Oded brings his expertise are the USA, Canada, Japan, India, China, the UK, Poland, Russia, Ukraine, Colombia, Chile, Peru, Turkey and many others.
Oded has authored multiple TOC articles and contributed to several TOC books.
Oded in the is the author of Ever Improve – A Guide to Managing Production the TOC Way, published in June 2010. Oded co-authored the book Deming & Goldratt: The Theory of Constraints and the System of Profound Knowledge – The Decalogue.
Together with Jelena Fedurko Oded has co-authored the book TOC Fundamentals, recently published in Russian.
www.toc-strategicsolutions.com
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
• High Efficiency
• Areas for Improvements
• TOC Approach to Improvement
• TOC Portfolio
• Where to Start?
Reaching Highest Efficiencies
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
The objective:Get higher performance of the existing systems while making the most (exploiting) the available
resources – especially state budgets
TODAYTODAYTHE PASTTHE PAST THE FUTURETHE FUTURE
The GAP
High EfficiencyS
yste
m
Sys
tem
P
erfo
rman
ce
Per
form
ance
Projection based on extrapolation of the current performance
The vision of a well-run system (what the system can achieve)
Potential Improvement
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Examples of ResultsExamples of ResultsAchieved by Achieved by
TOC ImplementationsTOC Implementations
Public testimonialsPublic testimonials
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Goals
• Increase Throughput
• Decrease costs
• Decrease Work In Process WIP
• Reduce Repair Cycle Time • Make schedule 90+% of the time
Maintenance Center, Albany, GA
The Honorable Diane K. MoralesDeputy Under Secretary of Defense(Logistics and Materiel Readiness)
• The center belongs to the U.S.A MoD
• Receiving yearly budget for performing yearly plans.
• The objective of the initiative was to give better service for the same budget
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
MK-48 - Full Refurbishment
0102030405060708090
100110120130140150
Qua
ntity
FY-02 Produced 6 20 36 52 67 86 109
FY-01 Produced 11 21 31 41 51 58 63 74 84 88 91
FY-02 Scheduled 14 28 42 68 86 104 124 139 151
FY-01 Scheduled 10 20 30 40 50 57 61 65 75 91
Jun Jul Aug Sep O ct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep O ct Nov Dec
Output Per Month, Cumulative
Data Source: Master Work Schedule vs. Completions
*On 20 Jul 02, July’s requirements changed from 14 to 26.**On 04 Sep 02, 10 vehicles were added to the schedule for Nov and Dec.
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Before TOC, the repair cycle time average was 167 days. After TOC, the average is 51 days.
MK-48 - Full Refurbishment
20406080
100120140160180200220240
0 5 10 15 20 25 30 35 40 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 9510010
511
0
Vehicle Numbers
Days FY-00
FY-01
FY-02
Articulation hitch problems
Repair Cycle Time (Days)
Data Source: Concerto: Activity By Project Records
0
250
500
750
1000
1250
1500
1750
Vehicle Numbers
Hours
FY-00FY-01
FY-02
Labor Hours - MK-48
Data Source: Essex Replacement Program (ERP)
Starting with vehicle #161981, includes installation
of the Antilock Braking System (ABS) Modification.
Starting with vehicle #2MK115, includes 100% replacement
of Articulation Hitch. No additional funds required.
How was it achieved?
CCPM - 26 Mar 01SDBR - 6 Jun 01
TOC Implementation
Lean
TOC
Lean + TOC
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
TOC Implementation Repair Cycle Time (Days) WIP Reduction
Production Line CC S-DBR Before TOC CC
Actual Before TOC CC Actual
MK48 26 Mar 01 6 Jun 01 167 53 51 55 35 35
LAV-25 9 Oct 01 11 Oct 01 212 99 114 13 7 7
LAV-AT 9 Oct 01 11 Oct 01 200 100 117
LAV-C2 9 Oct 01 11 Oct 01 147 99 120
LAV-L 9 Oct 01 11 Oct 01 190 100 119
LAV-M 9 Oct 01 11 Oct 01 158 92 111
LAV-MEWSS 9 Oct 01 11 Oct 01 No data 92 119
LAV-R 9 Oct 01 11 Oct 01 194 106 167
MK14 Trailer 11 Apr 02 13 May 02 56 23 35 8 3 1
MK15 Trailer 11 Apr 02 3 Jun 02 229 69 95 2 2 3
MK16 Trailer 11 Apr 02 20 Jun 02 126 22 42 2 2 0
MK17 Trailer 11 Apr 02 20 Jun 02 269 49 85 3 2 1
M931 5-ton 22 Apr 02 29 May 02 113 48 70 5 4 5
M936 Wrecker 22 Apr 02 29 May 02 278 63 6 0 0
M970 Refueler 25 Apr 02 20 May 02 282 82 133 8 6 6
M149A2 Water Trailer 25 Apr 02 20 May 02 No data 18 36 17 7 8
M88 Tank Retriever 29 May 02 1 May 02 213 159 146 5 3 3
Small Arms - 20 May 02 - - - - - -
AAV–P7 9 Aug 02 1 May 02 66 66 5 4 2
AAV–C7 9 Aug 02 1 May 02 66 74 22 9 9
AAV–R7 9 Aug 02 1 May 02 No data 74 0 6 0
M-977 HEMTT Truck, Heavy Mover 20 Sep 02 20 Sep 02 No data 45 0 6 6
Implementation, Repair Cycle Time, and Work In Process (WIP)
Critical Chain Simplified Drum Buffer Rope Represents entire LAV line. No current production line. Production line completed. AAV hull repair and assembly after receipt of hull from UDLP.The AAV critical chains have been established to cover the work performed after the hull has been modified by UDLP.
-9-
The improvement was implemented across all services of
the center
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Areas for Improvement
State Involvement:•Services Provided by the State:
Defense, Health, Infrastructure, Education, Welfare, Security (Police), Prison (rehabilitation), Agriculture etc.
•State Initiatives: Special Investment Projects
•State Owned Businesses•Suppliers/Providers to State Services •Non-State Businesses
Reaching Highest Efficiencies on State(Country) Level
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
TOC offers a general approach to achieve improvements. It contains three blocks:•Mindset – commitment of the system’s officers to achieving the highest possible performance of their systems.•Short term improvements – implementing Solutions that make modifications – technical and managerial - to the way the current systems are run. These solutions should provide quick results for demonstrating improvements are possible and for fueling the desire to improve.•Continuous Improvement – establishing mechanisms and behaviors for supporting On Going Improvements - POOGI.
TOC Approach to Improvement
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
• Standard TOC Logistical Solutions – Production, manufacturing, operations – TOC for MTO (make to
Order) and TOC for MTA (Make to Availability) Supply Chain Management – TOC Distribution CCPM – Critical Chain for Project Management
• Applications of TOC Logistical Solution TOC for the Health Service
• TOC for Flow Management – developing special solutions to improve the flow of systems (such as Welfare services)
• TOC Methodology – developing new strategic solutions for improving systems’ performance
• TOC for Education – Use of the TOC Thinking Processes for enhancing the ability of the young generation to learn, solve problems and achieve ambitious targets.
TOC Offering for specific Systems
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
• Example: Health Service India
Application of TOC Logistical Solution
Applying TOC in Day Care Eye Surgery in an Eye Hospital
an experience
Extracts from a presentation given at the TOCPA conference in Moscow, May 2012, by
Debashish Naik
Founder & Principal Consultant, MEVOCON, India
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Day Care Eye Surgery: OT Process
Pre Operation activities OT Complex Post OperationPatient
arrives at Hospital
Patient leaves the Hospital
Admission (5 min)
Dilatation (45 min or more)
Billing 5 to 15 min
OT ComplexPre Operation activities
Post OperationPatient
arrives at Hospital
Patient leaves the HospitalReception
5 minBlock / Vitals
15 min
Operation Theater
Pre surgery prep 5
min
Surgery
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Lead Time before implementing TOC Solution
13 th Jan 14th Jan 16 th jan 17th Jan 18th Jan 19th Jan 20th Jan 21st Jan 25nd Jan03:35 02:45 03:00 02:47 04:40 02:00 02:25 03:50 04:0504:55 05:30 03:40 02:25 04:15 02:25 03:35 01:51 02:2003:15 02:15 03:10 02:52 02:35 02:55 02:00 04:10 02:0003:05 03:07 03:05 03:30 02:50 02:05 01:46 01:45 01:3502:40 02:10 02:27 02:56 01:45 02:30 04:50 02:30 02:1003:40 02:20 02:55 02:13 01:44 03:50 02:10 01:35 01:1503:10 04:00 02:25 02:15 02:10 01:30 02:00 02:45 01:3503:35 03:15 02:47 02:27 04:20 01:30 03:10 02:30 02:1002:00 03:00 01:45 03:23 03:05 03:10 03:15 03:00 04:1001:55 02:45 02:15 02:13 02:20 03:00 02:10 02:03 05:1504:21 02:17 01:40 03:30 02:50 01:35 01:40 00:45 02:4003:56 02:20 03:10 02:20 03:00 01:15 02:30 03:35 02:3002:55 03:50 04:30 02:02 01:45 02:30 01:30 02:10 01:4002:15 03:50 02:00 02:35 01:50 02:10 02:4503:45 03:05 02:30 03:20 02:10 01:5003:25 02:20 03:05 02:3502:35 02:00 02:30 02:15
02:20 02:10 01:3502:05 02:40 04:0003:50 02:45 02:4002:05 02:20 01:25
02:25 01:4002:50
Total Lead Time OT process_ Pre TOC Solution
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Data on Lead Time: Before implementing TOC Solution
Data Pre TOC Solution
Average Lead Time 2 hr:43 min
Max Lead Time 5 hr: 30 min
Min Lead Time 0 hr: 45 min
Lead Time for % of patients (Pre TOC Solution)
For around 79% patients the lead time is more than 2 hr
45 min to 1 hr
1 hr to 1 hr 30 min
1 hr 30 min to 2 hr
2 hr to 2 hr 30 min
2 hr 30 min to 3 hr
3 hr to 3 hr 30 min
3 hr 30 min to 4 hr
4 hr to 4 hr 30 min
4 hr 30 min to 5 hr
5 hr to 5 hr 30 min
Pre TOC 0.7% 3.9% 17.0% 30.1% 18.3% 12.4% 9.8% 4.6% 2.0% 1.3%
Note: data collected over one week
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Solution Components Summary• Solution Components: The solution is adaptation of the TOC
MTO solution as defined in “Ever Improve” and further Lean is
integrated with TOC
Doctor’s surgery time decides the schedule
Patients schedule is done as per doctors surgery schedule (so
unnecessary waiting of patient is reduced)
All others subordinate to surgery time so doctor’s time is not
wasted
Introduce “expedite” principles in OT process area
Cycle time of each operation /tasks that subordinate and impact the
lead time are reduced or improved on a continuous basis applying
Lean philosophy /Kaizen
Doctor also put himself on continuous improvement to reduce the
surgery time without compromising the quality
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Bringing Improvement
Current System
Stopped/Replaced
Current System
Stay
Proposed Solution
New
Improved performance
While designing the solution we looked into:
1. Which parts of the system are “erroneous” and have to be replaced
2. The new parts that must be introduced to replace the erroneous parts
3. All the other parts of the system stay as they are!
Source: Ever Improve by Oded Cohen
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
TOC Solution
Strategy (what do we want to achieve):The patient waiting time is as minimum as possible
without keeping the doctor idle at any time during the surgery {Reduce the lead time for day care eye surgery to 1.5 hr/2 hrs from around 2.5 hr/3 hr in the beginning for at least 70% of patients}
Why 2 hr was decided to start with in the beginning?• Actual touch time at present is 80 min to 90 min for
the patients who are fit and do not develop high BP/Sugar just before the surgery or do not take a long time for dilation.
• For Pre dilated patients it is between 40 min to 60 min
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
TOC Solution
Tactics (how are we going to achieve the strategy)
By implementing: Principles of Flow Mechanism of DBR – Drum Buffer Rope for planning Buffer Management – For Controlling the execution of the plans POOGI – Process of Ongoing Improvement
Leveraging the improvement
• As a continuous improvement process, start working on how to bring more patients and do more surgery with the existing resources, increase the revenue and profit and lower the cost without compromising quality
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Lead Time after implementing TOC Solution
26th Mar 27th Mar 28th Mar 29th Mar 30th Mar 31st Mar 5th April 6th April2:00 1;55 1:45 1:15 1:40 0:55 1:55 4:052:00 2:00 1:50 0:45 2:00 1:25 1:30 1:402:00 1:50 2:00 1:40 2:00 1:30 0:55 1:302:00 1:10 1:55 2:45 1:25 1:50 1:40 1:552:00 1:25 2:15 1:55 1:35 1:50 1:20 1:503:20 2:30 1:50 1:25 1:55 1:55 1:20 1:053:35 2:00 2:00 1:25 1:50 2:00 1:35 2:452:35 1:40 2:00 1:15 1:50 2:00 1:35 0:552:00 1:40 2:00 1:30 2:00 2:00 3:00 1:001:10 1:40 2:00 1:50 2:40 1:50 1:201:40 1:25 2:00 1:15 2:00 1:05 2:001:20 1:25 2:25 1:25 1:55 1:50 1:451:45 2:40 1:25 1:50 1:55 1:35 1:55
01:55 01:30 1:10 2:00 1:20 2:001:40 2:40 1:15 2:00 1:55 3:25
02:35 01:30 1:10 1:55 1:3001:50 01:45 1:10 1:25 1:5501:35 1:05 1:50 2:0001:50 2:35 2:0001:55 2:50 1:4501:50 1:5503:10 1:5502:00 2:25
1:251:302:001:25
Total Lead Time OT process_Post TOC solution
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Data on Lead Time: Pre and Post TOC Solution
Data Pre TOC Solution Post TOC Solution
Average Lead time 2 hr:43 min 1 hr: 57 min
Max Lead Time 5 hr: 30 min 4 hr: 05 min
Min Lead Time 0 hr: 45 min 0 hr: 45 min
Lead Time for % of patients (Pre and Post TOC Solution) Average lead Time reduced by 28%
HH:MM 0:00-0:45 1:00-1:30 1:30-2:00 2:00-2:30 2:30-3:00 3:00-3:30 3:30-4:00 4:00-4:30 4:30-5:00 5:00-5:30Pre TOC 0.7% 3.9% 17.0% 30.1% 18.3% 12.4% 9.8% 4.6% 2.0% 1.3%Post TOC 3.5% 26.1% 57.0% 2.8% 7.0% 2.1% 0.7% 0.7% 0.0% 0.0%
•Pre TOC, for around 49% patients the lead time was more than 2 hour 30 min and Post TOC for around 86% patients the lead time is less than 2 hour
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Benefits derived from the project
• Reduction in Lead time• Entire OT staff started working as One Team • Increase in Patient satisfaction • A few measurement that drives improvement and hence does
not create any confusion• Bringing further improvement becomes easy as team knows
where to Focus• Many small issues got resolved • Team feels motivated• CEO is quite happy and now showing interest to take the
journey forward• Doctors and staffs are able to visualize more capacity• And many more…..
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Is it worth to strive to achieveIs it worth to strive to achieveOperational ExcellenceOperational Excellence
A study of ABB’s Operations Improvement projects (TOC+LEAN)
confirm an average payback time of less than 3 months !
1) Source: Copenhagen Institute for Futures Studies and Larry Keeley: www.doblin.com (3000 projects examined)
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
The key conditions for Successful TOC Implementation:
1.A real need/desire for improving the performance of the system. The may be imposed externally or driven internally by the officers of the system.
2.A good solution that fits the reality of the system and can provide the desired results.
3.Leadership with clear vision and the ability to take their people on the journey of improvement
4.Supporting troops that are willing to go through and to contribute to the suggested change. Many times condition (4) highly depended on condition (3).
Where to Start?
Leadership for TOC demands:
Capability, Willingness and Confidence
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Two potential directions: Top-Down, Bottom-Up.
Ideally, both.
1.Develop a State Centers for Improvement (or use existing ones) and make them the custodians of the knowledge and the host of solutions.
2.Provide Support – budget, resources and knowledge – to State Systems that want to improve.
3.Initiate Learning Projects (Pilots) in some State Systems, record and publish the experiences.
4.Continuously measure the performance of the State Systems and urge their officers to improve.
Where to Start?
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
• Services Provided by the State: Defense – MRO of existing equipment and facilities, New Developments and special projects
Health – ERs, Hospital Wards, Theaters etc.
Infrastructure – Projects
Agriculture, Forest
Education – TOC For Education
Welfare – Specially developed specific solutions
Security (Police) – Thinking Processes and Strategic Solutions
Justice – use and modification of existing applications
Prison (rehabilitation) – Thinking Processes
Where to Start?
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
To be able to initiate System’s Improvements we must establish:
I. Clear Goal of the System – what is the purpose of having the system?
II. Clear Measurements that can mark the progress of the system towards its goal.
There are State Systems that do not clear goals and measurement. Traditionally, these systems have been performing on State Budgets. The introduction of clear goals and measurements can be challenging, yet, potentially rewarding to all stakeholders.
Challenges
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
Get input from the State bodies that deal with problems with the State Systems, such as:
I. Public Ombudsman – for public complains
II. The State Auditor (excluding criminal issues)
III. State Bureau of Statistics – benchmarking against other countries
IV. Public criticism (press etc.)
Opportunities for Start
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
• State Initiatives: Special Investment Projects TOC CCPM for Project Management
• State Owned BusinessesFor Profit or Self Sustained non-for-profit
Use the Standard TOC solutions, make modifications if necessary.
If standard solution is not available – consider using assistance of a TOC expert.
• Suppliers/Providers to State ServicesInfluence them to implement improvements
• Non-State BusinessesInfluence and Support
Where to Start?
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
The State has interest in the improving of the Non-State Businesses as that can lead to increase in Tax and in improving the standard of living.
The State can influence non-state systems to improve such as:•Suppliers to State services and projects (like Israel MoD, Japan MLIT etc.)•Companies and organizations that seek State financial support:
In Crisis In a major investment/expansion Start up
•Companies that the State has some ownership (especially after bailing out after Crisis)
Opportunities
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
WHAT to change?Pinpoint the core problem
WHAT to change TO?Construct simple practical solutions
HOW to cause the change? Induce the proper people to make the change
(to invent such solutions)
What creates the process of ongoing improvement? Create a mechanism to determine what to improve
next
Problem
Solution
Implementation
POOGI
Why TOC?
TOC provides a systematic approach to develop plans for the pursuit of a significant improvement of their systems
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
CONSTRAINTS –factors or elements that determine
how much the system can accomplish
TODAYTODAYTHE PASTTHE PAST THE FUTURETHE FUTURE
The GAP
Block
Lift
What prevents us from achieving the goal?
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
System Constraints
Main types of constraints of a commercial system:
Capacity Constraint – a resource which cannot provide timely capacity the systems demands for it
Market Constraint – the amount of customers orders is not sufficient to sustain the required growth of the system
Time Constraint – The response time of the system to the requirement of the market is too long to the extent that it jeopardizes the system’s ability to meet its current commitment to its customers as well as the ability of winning new business
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
1. Identify (choose) the system’s constraint
2. Decide how to exploit the system’s constraint
3. Subordinate everything else to the above decision
4. Elevate the system’s constraint
5. If the constraint is broken go back to step one but do
not allow Inertia to cause the system’s constraint
Managing the TOC Way means using the constraint as a leverage to manage and grow the system
TOC - The Five Focusing Steps
Reaching the Highest Efficiencies September, 2012Copyright © 2012 by Oded Cohen
• Every system is built for a purpose and hence has its
goal and measurements. State systems were built for
the nation.
• Every System can be improved – and so State systems.
• Given a methodology backed up by techniques,
procedures and knowledge – can generate significant
results in improving systems
• TOC has been around since 1975, with a significant
amount of solutions and applications, in a vast
spectrum of systems around the globe.
Conclusion