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The TOC Centre of Australia

The TOC Centre of Australia. Resource Optimisation Using Critical Chain Buffer Management in the Multi Project Environment Presented by: David V Hodes Tel: 02 9293 2844 Mobile: 0409 789 034

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The TOC Centre of Australia

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  1. The TOC Centre of Australia Resource Optimisation Using Critical Chain Buffer Management in the Multi Project Environment Presented by:David V Hodes Tel: 02 9293 2844 Mobile: 0409 789 034 Fax: 02 9315 5891 E-Mail: david@tocca.com.au www.tocca.com.au

  2. The TOC Centre of Australia Product Suite

  3. Critical Chain Projects

  4. Some Critical Chain Results • The first time out, we took 26 days out of a 71-day hypermarket re-fit, a 37% increase in capacity Matador Refrigeration • The industry standard to get the plant up and running to 90% capacity is about 46 months. The plant was recently completed and is up to 90% production in 13 months Harris Semiconductor • We succeeded in dropping our average turnaround time per aircraft visit from three months to two weeks… Israel Aircraft Industries • We originally scheduled to take 13 months to deliver – and the team did it in six months Honeywell DAS

  5. The Project Operations The Market The reward The Idea Factory The Idea

  6. The next new idea On time Monopoly advantage Market leader pricing advantage Early Market follower pricing disadvantage Cost reduction Freed resources Time Late Extra cost Trapped resources The Cash Flow Of An Idea $

  7. When Ideas Become Projects • They are late • They are over budget • They frequently change in scope • Standish Group (www.standishgroup.com) • 30% of projects canceled before finished • 75% of completed projects are late • Average cost overruns are 189% • Average time overruns are 222%

  8. What About The Measures? • “Show me how you measure me, and I’ll show you how I perform. Measure me in an illogical way, and don’t be surprised if I behave illogically” Dr Eli Goldratt • Is the goal task conformance or project performance?

  9. What we want to do is: Finish projects on time Finish projects on budget Finish projects on scope Shorten project lead times Finish more projects What we do is: Manage to finish tasks on time Measure resources on utilisation Micromanage task flow Detailed risk analyses Detailed specifications Global Versus Local Optima

  10. Uncertainty Is At The Heart Of The Problem • Vendor performance is unreliable • Required tasks are not fully known • Time to complete any given task varies • Delivery of needed tools, equipment, and material is uncertain • Resource availability cannot be guaranteed

  11. The Issue of Duration Risk 10% probability 50% probability 95% probability BC is not necessarily 2xAB Task Duration

  12. How Risk Relates To How We Are Measured When we put safety into each task… • Projects seem to be longer than necessary • Parkinson’s Law: work expands to fill the time available • Tasks seldom finish early • “Student syndrome” prevails: 2/3 of work done in last 1/3 of time Activity Task start Task end

  13. The Effect Of Multi-tasking

  14. Unlevelled Schedule

  15. Load to Capacity of C

  16. Critical Chain The definition of the Critical Chain is the longest set of dependent steps, taking task precedence and resource contention into account.

  17. Identify Critical Chain • Load levelled (finite capacity) • Critical Chain identified

  18. Σ = Buffer Managing The Critical Chain Shrink the times to 50% probability of completion – aggregate protection in the feeding and project buffers

  19. Types Of Buffers Project buffer: • Placed before the customer, to protect our commitment to the customer (the external constraint) Feeding buffer: • Placed at each point where non-critical tasks join the critical chain, to protect against precedence conflicts on non-critical tasks

  20. CC, Fb and Pb • Project buffer task 13 • Feeding buffers tasks 3 and 8

  21. Critical Ratio • Critical Ratio = work to completion time to completion (work+buffer)

  22. Scenario 1 • Status date represented by red line (8am Sunday 4th November) • Purple bars represent projected start and finish times • Project buffer (Pb) penetrated • Feeding buffer (Fb) task 8 penetrated • Resource buffer (Rb) tasks 5 and10 scheduled against expected start • Task 4 most critical to work on, as a delay here causes immediate Pb penetration

  23. The pacing resource Individual Critical Chain Projects Portfolio Selection Buffer management policies Project Portfolio But How Do We Manage The Complex, Multi-Project Environment? • Analyse • Resource • Decide Project Pipeline

  24. The Classic Multi-Project

  25. Classic Multi-Project Statistics

  26. TOC: Critical Chain, Drum and Buffer Management

  27. TOC Statistics

  28. Test Results

  29. You manage the constraint… Or the constraint manages you So What’s the Choice?

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