• TOC, PMBOK, Lean and 6 Sigma

◦ Deming noted that "you should not expect significant system changes to come from within
the system."
◦ Leach still support PMBOK
◦ 6 Sigma and TQM improve each and every process
‣ a bottom up approach to improve systems
• profound knowledge
• root cause analysis
◦ TOC
‣ constraints
‣ throughput
• 2.1 PMBOK
◦ CPM
◦ PERT Program Evaluation Review Technique
‣ developed in 1958 or sixty years ago
◦ Areas for Improvement by Critical Chain
‣ Project Integration
‣ Project Scope
‣ Project Time
‣ Project Risk
◦ 2.1.3 Time
‣ Inputs
• WBS
• Scope statements
‣ Schedule
• requirements
• constraints
• PMBOK identifies uncertainty and directs to risk mgmt
• Level resources should be done in the plan
• Does not differentiate between common and special cause
◦ 2.1.4 Risk
‣ Metrics include likelihood and impacts
‣ TOC & PMBOK does not identify common and special causes
◦ 2.1.6 Organisational Project Maturity Model
‣ OPM3 in 2003
‣ Extends scope from single project to program and portfolio management
‣ Reflects a change from "waterfall" approach towards "rapid prototype" development
‣ Leach applies "rolling-wave" approach
• 2.2 Lean
◦ Principles
‣ Teamwork
‣ Communication
‣ Chase Waste
‣ Continuous Improvement
◦ Focus on Waste
‣ specify value
‣ identify the value stream
‣ focus on flow
‣ implement pull
‣ perfect
◦ Comments
 ‣ TOC
• change value to company goal
‣ 6 Sigma
• more on VS, pull and flow
• a combi is Lean Sigma
‣ Why the delay
• TOC and Lean is seen as production approach
• Dettmer
◦ states TOC is a system framework, below that should be the lean thinking
◦ lean tools helpful
‣ poka-yoke
‣ SPC
‣ Continuous improvement;
‣ Failure modes and effects analysis for both product and process;
‣ Line stop;
‣ Cell design (meaning, in this case, establishing work centers around natural
work groups);
‣ Team roles, responsibilities, and rules;
‣ Graphic work instructions;
‣ Visual controls
‣ 5 Ss
◦ Avoid cost reduction emphasis
◦ Avoid focus on local optima
• 2.3 Agile
◦ Reaction to Prince or ISO9000
◦ Methods
‣ Rapid application development (RAD)
‣ Joint application development
‣ Extreme programming
‣ Scrum
◦ Comment that these methods are supportive as parts of larger projects, and not replacements
at the strategic level
◦ Most issues stem for lack of a checklist to remove unwanted or needed steps from PMBOK
◦ Projects without all requirements at start
‣ IT
‣ maintenance
‣ drug-development
◦ These should use rolling-wave approach
• 2.4 Six Sigma
◦ measuring product quality
◦ process improvement
◦ cost reduction
◦ Uses PDCA cycle
◦ Improves with DMAIC
◦ Projects use DMEDI
◦ TOC uses stats to simplify, 6 Sigma complicates
• 2.5 system of Profound Knowledge
◦ x
• 2.6 TOC
◦ scientific method produces
‣ system thinking is better than analytical thinking to manage change and solving problems
‣ Any optimised solution needs updating to avoid issues due to changes in environment
 ‣ An optimised system has just one part doing so, and the opposite is true too. The
system optima is not additive
‣ Systems can be liken to chains, and have a weakest link
◦ 2.6.1 The Throughput World
‣ system constraints result from policy not physics
• accounting bad assumptions
◦ Cost World
‣ assumes product costs as primary way to make decisions
• activity based costing
‣ was good enough at start of 20th century when labor was variable cost
‣ capex was fixed costs
‣ Operating efficiencies of Work Centers are measured
• results in increase of inventory to meet efficiency metrics
‣ Inventory is considered an asset: think Reman having warehouses of scrap
• reduces cashflow and disposable cash
• costs to store
• costs to buy
‣ People
• considered competitive edge
• treated as costs in accounting
‣ Keep Assets
• are valued in accounting
• drains cash to maintain
◦ Throughput World
‣ Throughput is revenue - COGS
‣ Inventory(I) = all money in fixed assets including WIP
‣ Operating Expense (OE) = all monies spent on throughput (T)
‣ Evaporating Cloud
• If you manage via Throughput you have unlimited growth
• If you use 6 Sigma and Lean you focus on costs which only has limited savings but
may cut into your growth or your sales
• Why not?
◦ Inertia
• Why yes?
◦ desperati
on.
When
you
realize
your
worldvie
w is failing you?
◦ 2.6.2 The Production Solution
‣ Goldratt's story of selling good transparency software but it made no money for his
clients
‣ The Goal == Deming's aim of a system
‣ T = Revenue - COGS
‣ To maximise throughput we need to increase sales until
• constraint not overloaded
◦ leads to excess inventory
• constraint not starved
◦ use drum and rope to fill the buffer
 ◦ do not limit the capacity of the steps before a constraint to the same level
‣ statistical fluctuations will aggregate and cause fluctuations that are forever
lost since this is before the constraint
• Steps after constraint
◦ same reason as before constraints
◦ Hence we expect to see non-constraints idling showing enough reserve
• Key Point
◦ a system operating with each step at optimum efficiency cannot be an efficient
system
◦ You cannot predict the fluctuations as they are statistical and can be found in
large numbers
◦ Hence there is diminishing returns to specificity / details
◦ First, a list of the 11 laws:
◦
◦ Today’s problems come from yesterday’s “solutions.”
◦ The harder you push, the harder the system pushes you back.
◦ Behavior grows better before it grows worse.
◦ The easy way out usually leads back in.
◦ The cure can be worse than the disease.
◦ Faster is slower.
◦ Cause and effect are not closely related in time and space.
◦ Small changes can produce big results–but the areas of highest leverage are
often the least obvious.
◦ You can have your cake and eat it too–but not at once.
◦ Dividing an elephant in half does not produce two small elephants.
◦ There is no blame.
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦ 2.6.3 Five Focusing Steps
‣ 2.6.3.1 find the weakest link
• core conflict is why a system does not perform better
◦ root cause of UDE
‣ 2.6.3.2 get the most out of the weakest link
• don't waste time on defective parts
• don't waste time waiting, do your setup in parallel
• remove core conflict
 ‣ 2.6.3.3 focus the whole system to the ONE / truth
◦ don't allow anything to take away from the focus
‣ 2.6.3.4 elevate the constraints
• make the constraint do better
‣ 2.6.3.5 If you hit another constraint, repeat
• don't let inertia stop you
◦ 2.6.4 The Thinking Process
‣ What to change
• What to change to
◦ How to cause the change
‣ Tools
• Current Reality Tree => As Is
◦ cause & effect model of system
‣ connects single core conflict to set of UDEs
‣ lead team to agreement and buy in of if-then statements
• Future Reality Tree => To Be
◦ to convert all of UDEs in CRT to DEs
‣ id the changes needed
• Negative Branch
◦ a little tree
◦ to resolve single UDE
• Pre-requisite Tree (coherent strategy)
◦
• Transition Tree(synchronised tactics)
◦ provides actions
◦ reasons
◦ results
◦ logic connecting
◦ logic for sequence of actions
◦ seldom used
◦ often a project plan is used
◦
• Evaporating Cloud
◦ in order to ...you must first have y
◦ To get this
‣ we believe that
• hence we need to do those
◦ Aim to achieve A, B, & C and not worry D and D'
◦
‣ see [26] for info on thinking processes
• 2.7 Change Management
◦ Skinner's model is most effective
◦ ABC model of operant conditioning (antecedent- behavior - consequence)
‣ similar to 6 Sigma
‣ by L Braksick [27]
‣ individual level approach
◦ Kotter organisational approach
‣ establish sense of urgency
‣ form a powerful guiding coalition
‣ create a vision
‣ communicate the vision
‣ empower others to act on the vision
 ‣ plan for and create short term wins
‣ consolidate improvements while producing more change
‣ institutionalise the new approaches
• 2.8 The Grand Synthesis
◦ All efforts for continuous improvement will die out if
‣ the focus is not on the constraint
‣ change management is not effective
◦ All of the management theories are accessible through Deming's system of Profound
Knowledge
◦ PMBOK
‣ how to plan and implement change
◦ TOC
‣ where to focus on change
‣ Tools
• 5 Focusing Steps
• Thinking Processes
◦ Lean
‣ Philosophy of Waste Reduction
◦ 6 Sigma
‣ Reduction of Variation
◦