toc service industry

SPIN CHENNAI, JAN 23, 2016.

Krishna Sivaramakrishnan, TOC, Lean, Agile and Business Excellence Professional

https://3point4.wordpress.com/

THEORY OF CONSTRAINTS

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• What is TOC Developed by Eliyahu M. Goldratt

Any system can produce only as much as its critically constrained resource.

TOC Helps

• What does “TOC” mean to you?

Boost performance by looking at entire processes. The sum of local optima is never better than and usually worse than the global optimum.

• What is successful TOC project / program

Increase the throughput to maximum using leverage points / constraints

– People centric ways to create innovative solutions simplicity

– Market Centric Ways to maximize Business Value Global thinking

– Product centric vs Wasteful processes Productivity

THEORY OF CONSTARINTS

Throughput Inventory Operating Expense


Constraint: Anything that limits a system’s performance relative to its goal

Inventory: All the money used to purchase things the system intends to sell… unfinished work in software development. MINIMIZE.

Throughput : Rate at which organization generates goal units(revenues).

The Dollar value added from the delivered production units (FP/SP/Size). INCREASE

Operating expense: The money a system spends to turn inventory into throughput, in Software total number number of production units that have moved through the SDLC system to date. DECREASE

Non Constraint : Any resource whose capacity is more than the demand

placed on it

Goal

Constraint

Throughput

Operating expense

Inventory

Bottle Neck

TOC – Key terms


1. What to change:

Find what should be changed, to effectively improve the

performance. Limited time, effort and resources make it difficult.

2. To what to change to:

Once the core problems have been identified, the next step is to find

the solutions.

3. How to cause the change:

If 'to what to change to' is identified, but if it is not possible to

cause that change, then the solution is not of much use.

TOC FRAME WORK

What to Change

How to cause the change

TOC Frame Work

What to change to


Source : https://www.toc-goldratt.comhttp://elischragenheim.com/

Always look for signals that challenge our current understanding. Taking actions only within the comfort-zone is a wide-spread compromise of the conflict.

This is the essence of living in uncertainty, partially knowing and partially not knowing. We need to make decisions that would never hit us too seriously and most of the time will bring huge benefits.

Pillars of TOC


Identify the Constraint

Exploit the Constraint

Subordinate to the constraint

Elevate the constraint

Go to step 1

Five Focusing steps


Step 1: Identify the Constraints

Goal is to achieve CMMI Maturity

Constraint: Anything that limits a system’s performance relative to its goal

Types of constraints CCR factor - Impact %

Market (10)

Resources (resistance) (15)

Tool capability (15)

Unawareness (20)

Schedule pressures (20)

Customer unwillingness (10)

Non relevance (10)



Identified the constraint

Problem that needs to addressed: Total estimated Time: 14 months

18 PAs, 140+ SPs and GPs. Mapping features in tool enhancement = CMMI gate ??

During first Four months into the journey some movement of Process definitions. No new features

implementation (Assumption was only 10-15% extra features required) Overall movement 10% of the

CMMI program . Tool needed to sync with completed definitions.

In remaining Eight months, needed to crack the combination of Tool Cap

implementation by the organization, review, audits and final assessment should be a success!



Step 2 : Exploit the Constraint

Exploit here means maximize the flow / output / returns from the constraint without additional resources / effort / investment

Exploit the ToolCap. Mini group for Tool enhancement, pilot Tool features into their own projects

ToolCap pilots helped implementation effort for projects. Buffer of three member team (resource buffer) to prop up the speed through the CCR, which is the ToolCap.

QA side simultaneous facilitation provided (effort ands schedule buffer).

Exploit the Constraint


Step 3 :Subordinate everything else to the Constraint

• Non Bottlenecks / Non CCR should be made to support CCR based on CCR priorities. Efforts of Non CCR Process Areas were subordinated to CCR – PAs. Functional and non CMMI activities helped by resource buffer effort sharing. Training, Tests, SEPG reviews, Audits, walkthroughs.

• Non Constraints (most of the system) recognize that their own efficiency is not as important than supporting the system constraint. Tasks other than requirements of CMMI down prioritized by SEPG

Changed ways benefits:

(ToolCap)optimization ( 5 months- 10 % -- Next 9 months 100%)

Overall of net benefit for the whole organization is saved effort 30-35% after month 7 of implementing 5 - FS

Subordinate to the constraint


Evaluate alternative ways to elevate one or more constraints.

We had PHI, THI audits to ensure compliance to CMMI requirements. improved the process adaptation by projects significantly.

From sixth month onwards Program progress of CMMI steadily accelerated to meet the schedule

Predict where the future constraint will be (after elevation) and its impact on global performance


Step 4 : Elevate the System’s Constraint


Do not let inertia become the constraint, If in the previous steps

Constraints have been broken goto step1.


Step 5 : Go back to step1


Time Buffer + Resource BufferEnsures JUST enough work for CCRDuring training the organization on ToolCap + ToolCap team

Definition

Input Goal

Drum set the pace of the CCR

CCR Bottle neck ToolCapNon constraints Non bottle necks

Non constraints Non bottle necksRope Feedback to ensure Input release does not exceed CCR capacity focus on Engg and subordinate support

IR1

Mo

nth

4

IR 2 IIR 1IIR 2 IR 3 IR4 CMMI Rating

Drum Buffer Rope

IR2

Mo

nth

5

Resource Buffer - SEPG, QA reviews and facilitation

IR3

Mo

nth

-11

, 80

%

IR4

Mo

nth

13

, 95

%

IR4

Mo

nth

14

, 10

0%

Problem that needs to addressed: Total estimated Time: 14 months18 PAs, 140+ SPs and GPs mapping features in tool enhancement = CMMI gate


Attuning to TOC The power of compounded continual simple habits

(1.01)^365=37.78Enjoy the seeds of discipline for the Yield

(1^365)=1.00Status Quo = Long term loss

(0.99)^365=0.03Suffer the pain of regret



References

http://www.goldrattconsulting.com/

https://www.toc-goldratt.com

http://elischragenheim.com/

Let us stay in touch!

Bloghttps://3point4.wordpress.com/

[email protected]

LinkedIn

https://in.linkedin.com/in/3point4

http://www.goldrattconsulting.com/

https://www.toc-goldratt.com/



http://elischragenheim.com/



https://in.linkedin.com/in/3point4

Goal

Constraint

Throughput

Operating expense

Inventory
