min. net. lead time

min. net. effort„impossible“

speed of light, no effortcurrent situation in

typical projects

0% 100%(2) the magic-question …… imagine – your division stays the exactly same, except: Your highest priority project is the only active project. All necessary resources are immediately available. Next steps start immediately after prior work packages are complete. Everybody in your division focus only this project. What must happen to lead-time and effort?

there is significant potential for greater profits much higher sales due to reliability, shorter lead times, postponed investment and greater project throughput

the symptoms are clear and transparent to management two or more symptoms are in orange or red

the project organization is self-contained enough the greatest portion of added value is within the division (>60%) there is a clear central (project) governance more than 100 employees are involved in projects

(5) requirements for Critical Chain

(3) Throughput/Profit Potential current situation

current situation * ΔT (%)

Sales (S) k€ k€

Fully Variable Costs (TVC)

k€ k€

Throughput (T) = S – TVC

k€ k€

Operating Expenses (OE)

k€

Profit = T – OE k€ k€

(4) profit potential

Critical Chain Potential Check

v1.5 2013-12-16© VISTEM.eu

% =1

%

inc. Throughput (ΔT%)

(1) Symptoms = potential …due date reliability - projects are finished withoutsignificant rework and they meet committed due dates

0% 100%

project lead times compared with best competitors

half as longdouble same

project managers have the urge to start a.s.a.p.in order to have a chance to deliver their projects on time

a.s.a.p. latest possible start

negative multitasking – it is impossible to finish work packageswithout interruptions by other projects or day-to-day work

Always happens Never happens

as team leader your best strategy is to distribute resourcesequally across all projects

Distribute resources equally

Allocate the right Optimum # of resources

% =inc. Profit (ΔP%)

E%

(A)

(B)

(A*(1+ΔT)

(B*(1+ΔT)

(X) (Y)

(Y)

(X)

-1

-1

min. net. lead time

min. net. effort„impossible“

speed of light, no effortcurrent situation in

typical projects

0% 100%(2) the magic-question …… imagine – your division stays the exactly same, except: Your highest priority project is the only active project. All necessary resources are immediately available. Next steps start immediately after prior work packages are complete. Everybody in your division focus only this project. What must happen to lead-time and effort?

there is significant potential for greater profits much higher sales due to reliability, shorter lead times, postponed investment and greater project throughput

the symptoms are clear and transparent to management two or more symptoms are in orange or red

the project organization is self-contained enough the greatest portion of added value is within the division (>60%) there is a clear central (project) governance more than 100 employees are involved in projects

(5) requirements for Critical Chain

✔

✔

✔

(3) Throughput/Profit Potential current situation

current situation * ΔT (%)

Sales (S) 100 k€ 125 k€

Fully Variable Costs (TVC)

30 k€ 37,5 k€

Throughput (T) = S – TVC

70 k€ 87,5 k€

Operating Expenses (OE)

65 k€

Profit = T – OE 5 k€ 22,5 k€

(4) profit potential

Critical Chain Potential Check

v1.5 2013-12-16© VISTEM.eu

25 % =1

80 %

inc. Throughput (ΔT%)

(1) Symptoms = potential …due date reliability - projects are finished withoutsignificant rework and they meet committed due dates

0% 100%

project lead times compared with best competitors

half as longdouble same

project managers have the urge to start a.s.a.p.in order to have a chance to deliver their projects on time

a.s.a.p. latest possible start

negative multitasking – it is impossible to finish work packageswithout interruptions by other projects or day-to-day work

Always happens Never happens

as team leader your best strategy is to distribute resourcesequally across all projects

Distribute resources equally

Allocate the right Optimum # of resources

350 % =5

inc. Profit (ΔP%)

E%

22,5

(A)

(B)

A*(1+ΔT)

B*(1+ΔT)

(X) (Y)

(Y)

(X)

Beispiel

x

x

x

x

x

x

xx

-1

-1