Laconic and Lucid of "The Critical Chain" Part 3

What is a problem?

A problem is not precisely defined until it can be presented as a conflict between two necessary conditions.

At the same time we have to be careful with are analogies. When we move back to organizations we can easily see that there are two different cases. The first one is where we can identify the constraint as physical (Bottleneck). In that case, strengthening the weakest link will mean to help the bottleneck to do more. But the other case should not be overlooked. Where it turned out that the constraint we identified is an erroneous policy. In that case, strengthening the weakest link cannot be interpreted as helping the erroneous policy to do more. So this doesn't mean we will start questioning every policy which is not satisfying our needs. But sometimes we need to replace the policy.           

Since we are dealing with Project Management, then TOC (Theory of Constraints) is bound to come into the picture. TOC’s is one of the most daring assumptions or I would say is the foundation about conflicts. If we witness a conflict, it is clear indication that someone has made a faulty assumption, a faulty assumption that can be corrected and by doing so the conflict removed.

A common thing seen in industry is that 8+8 = 20. Confused…???

Once the worker gives an estimate of the work including with some buffer, then the team leader adds 2 day buffer from his side then the project leader adds one day from his side and then the final completion projection reaches is 20, which should have been actually 16. This process is a prominent process and still we see that the projects are late. Since we already keeping so much buffer my do projects still get late. Why…??

Because what we do is time planning but not the resource planning and this makes projects late causing resource contention. Both these things have to go hand in hand else the projects are definitely going to go out of hand. Also the progress of our sequential steps deviations do not average out. Delays accumulate, while advances do not. This is one place where the safety disappears.   

Source:- The critical Chain from Eliyahu M. Goldratt

Note:- There are some excerpts that have been added from my side 

Laconic and Lucid of "The Critical Chain" Part 2

Since all the processes are interlinked with each other, we need to manage well; we must control cost and at the same time, must protect the throughput also. Controlling cost and protecting throughput require different mode of management. The process of a finished product represents our physical chain. What is the equivalent of throughput in our physical chain? What is determined not just by the links, but by fact that they interact with each other. It’s not just the weight (work done by individual link). If we remove all interaction, all linkages, and we are left with just a pile of links, the weight is still the same. So what property typifies a chain? It is the strength of the chain. If one link breaks, just one link, the chain is broken; the strength of the chain drops to zero. What determines the strength of a chain? The chain is as strong as your weakest link. Now suppose we have 7 links in the chain and link 4 is not the weakest link in the chain. So we try to strengthen link 4. What will be the impact on the chain? “Nothing,  Absolutely Nothing”.  So the local improvements do not contribute to the global improvements. And the organizations want improvement as a whole. Now we know that since any improvement requires attention and time and money, the way to improve the total organization is definitely not through inducing many local improvements, the more the better. That’s not the way.

There are two ways in which work in done in industries; Cost world and throughput world. What companies work is according to Cost world and at the end of the project throughput world? Cost world is where the companies produce taking into account the cost at every step and try to minimize it. Throughput world where companies produce according to the output needed, although cost world is also taken into picture but more emphasises is on the throughput (Output).  At the start of the month the companies produce according to the Cost world (Tight fist on overtime, batch Size) and in the last days of the month according to the throughput world (ship out however it is possible). Fewer and Fewer of these companies survive today. Why? Because compromises that were acceptable yesterday are intolerable today.     

Let’s not forget that in the throughput world the linkages are as important as the links. This means that if we decide to do something in one link, we have to examine the ramifications on the other link. It’s quite easy. Our intuition is in the throughput world and always was.

There are two assumptions about Cost Performance and Throughput Performance. Assumption 1- The only way to achieve good cost performance is through good local (Individual Process) performance everywhere. Assumption 2 is there is no way to achieve good throughput performance through good local performance everywhere.

Let us see how these assumptions are correct. Suppose we have one bottleneck and the other non-bottleneck. The bottleneck can produce 20 units in an hour and the non-bottleneck can produce 30 units in an hour. So now we make the non-bottleneck produce only 20 units because if we produce more than that we will have excess inventory which will increase our cost. So we produce less not to control throughput but to control cost. So to achieve good cost performance we have to make good local performances.   

Source:- The critical Chain from Eliyahu M. Goldratt

Note:- There are some excerpts that have been added from my side 

Laconic and Lucid of "The Critical Chain" Part 1

This Book is an excellent explanation of Project Management

This book has been a great help in understanding Project Management (PM) from a different perspective even after having the most uncertainties in the real life projects. I will be picking up some laconic from the book which can make us understand the PM in a better and simplified way. The first and most realistic “Uncertainty existing in every project is the underlying main cause for most problems”. During the tenure of the projects there are blame games everywhere which is a common phenomenon in the company and the lower the position of the manager the more the finger points not just outside (Uncertainty, Vendors, etc.) the company but inside as well.

Every company want its costs down and the companies try to cut it where ever possible but sometimes the cutting goes way off the track and they are so immersed in the mentality of saving money that they forget that the whole intention of a project is not to save money but to make money. Although I know most of the people reading, might know this but a reminder is what brings it back, until then it is lost somewhere in our sub-conscious mind.  

Now there is always been a fight when to use resources assuming we have it present whenever we want. Considering that we have a start of a project on Day 0 and there is parallel process (Process 2) which needs to be completed before it. The process 2 is not the critical path. The process 2 can be started at the time process 1 starts, then we will find that the process 2 has completed well ahead of time, when it can be used. Or the other can be we start the process 2 with a delay of sometime such that it completes almost the day before it is needed(not necessary to be completed on the day, can be a day earlier).  So the point is we have to weigh the savings from postponing an investment against the chance of damage resulting from finishing the project a little late. But also from experience it is seen if we start too many things at the same time, we are bound to lose focus and losing focus is one thing a project leader cannot afford.

Source:- The critical Chain from Eliyahu M. Goldratt
Note:- There are some excerpts that have been added from my side