Quietly Re-Thinking Out Loud

Found a good article this morning entitled Applying the theory of constraints in a structural steel plant—How keeping busy can be a BAD idea on the TheFabricator.com web site. To someone who has never been around a structural steel fabricator the first couple of paragraphs in the story might sound a bit alien but I think eventually any builder-remodeler should see some of the parallels to the situations they face at times.

by: admin

Reading through Pat Burke’s TOCforMe website again this evening I came across this little bit on why certain people/personalities might prefer Lean vs. Six Sigma vs. TOC (Theory of Constraints).

• Some people prefer a packaged system of to do items which will lead to improvement (LEAN).
• Some people prefer data driven decisions (SIX-SIGMA).
• Some people prefer a “common sense” approach of problem solving and increasing profit (TOC).

Plus he’s got a good little table there comparing some of the attributes. Lean, 6 SIGMA, TOC.

I couldn’t help but think that most of the builders and remodelers that I know that really want to improve their business’ operation are the kind that would prefer lean —”a packaged system of to do items which will lead to improvement“.

A builder I know from online forum dialogs once said “Give me 3 practical tips based on what you are saying I can use Monday morning in my building business.” and I think that’s really sort of typical of how most builders want to work on their companies. Generally speaking I think they want something hard and tangible they can see rather than something soft like “a different way of thinking”. It’s kind of like thinking what pill can I take to make my business better. People want the quick fix. Not that Lean is necessarily a quick fix at all, but it does to me seem to provide a clearer hard tangible set of things to do where TOC (Theory of Constraints) comes off as too intellectual, mushy and soft to them.

I think because Lean and Six Sigma are great at fixing local problems and people can see the results on a local the can respond and react to that either positively or negatively and at least feel like something is happening. The problem is because they haven’t been to look holistically as TOC gets us to do they don’t see the effects that a Lean and Six Sigma action can have globally and tend to miss that completely or don’t relate it to the action instead attributing it to some outside influence or random act of God (their luck changed).

Personally my preference is for TOC and my reasoning goes beyond the idea that I feel TOC can encompass and embrace the other two where the other two don’t necessarily contain TOC thinking. My feeling (and now experience too) is that TOC delivers much faster (and bigger) results right out of the box (provided you can teach and sell the ideology nd methodology). And it provides a mechanism for you to find the results of your actions even though those results might not be seen locally right in front of your face. What I mean by that is while a Lean or Six Sigma program may or may not produce a dramatic change locally it’s global effect might altogether be lost or go unnoticed.

I think the typical builder-remodeler might see a change somewhere but not connect to a Lean or Six Sigma action somewhere else, whereas TOC which seems to me to force you to think systemically helps you to see the results of your action even though they might be much further down the line or far away.

Just thinking out loud trying to figure out the character of the resistance to change that I see in the typical builder and remodeler.

by: admin

Another good on-line article read today Insight to Program Management: Sir Isaac Newton’s Laws of Motion and Getting His Horse to Drink by Ken Schatz on how to initiate and carry out organizational change as well as changing project methodology. 

by: admin

Interesting,… what I was looking for was some infomation on the Last Planner System™ and Hals comments in blog of Wednesday, October 02, 2002 First Thoughts on Control were both along the lines of what I was looking for and it got me thinking progressivly towards some other ends too. Talking about Kevin Kelly and his book Out of Control: The New Biology of Machines, Social Systems and the Economic World Hal wrote:

“Kevin traces the development of modern control to Norbert Weiner. Young Norbert was raised to be a genius. His father wanted a Nobel Prize in the family. His work provided the foundation for cybernetics. It started when he joined the effort to make uniformly thick sheet metal. The stakes were high because uniform feedstock would allow machines to make car parts — fenders, auto bodies etc. Three variables were obviously involved - the heat of the metal, the pull tension and the roller setting. But no one had found the magic relationship that could assure a long uniformly thick roll. Norbert cut through the problem. He showed with a simple mechanism that controlled the last variable produced the desired result as long as the other variables were within in a range. Being “right” didn’t matter as much as the ability to adjust quickly. His device detected the thickness of the metal just past the rollers adjusted them in response. Controlling the last variable with rapid feedback was all that was required as long as the other variables were within some range.

I was struck by how well the Last Planner System™conformed to this rule. Work is made ready as it moves forward to action and only released to certain criteria….

…There is more to say about control of more complex systems but the first rules are clear. Control the last variable while keeping the others within some range, and tightly couple the detection of variance to the control gate.” (my emphases)

More good stuff and very apropos. Just the kind of stuff I was looking for today.

by: admin

Looking around on the net for something else I needed this afternoon I accidently re-stumbled on something else I had read before but seemed to hit me differently today that I think is really important. The otherday I had asked the question somewhat rhetorically on Fine HomeBuilding Magazine’s Breaktime forum about Crew Size & Productivity.

I had mentioned there that while some of the well known leaders in the industry (Walt Stopplewerth to name a name) advocate remodeling companies adopting a one-person crew type system I don’t like the idea for safety reasons. While ultimately just as important and as critical I also don’t like the one-person crew because it discourages "conversation".

I think: Conversation Good (in a Me Tarzan type voice).

I often recall from reading and then listening to the tape of one of Tom Peter’s books him saying:

"Echoing these ideas, journalist Alan Webber claims the profound shift toward a brain-based economy means reconceiving "work as conversation." Time was, Webber wrote in the January February issue of Harvard Business Review , "if the boss caught you talking on the phone or hanging around the water cooler, he would have said, ‘Stop talking and get to work.’ Today if you’re not talking with colleagues and customers, chances are you’ll hear, ‘Start talking and get to work!’ In the new economy, conversations … are the way knowledge workers discover what they know, share it with their colleagues, and in the process create new knowledge for the organization."— (No Kidding, Cyberpunk Librarians!)

Well anyway Hal Macomber in his blog of October 03, 2002 Fool Me Again and Again! writes:

Task durations depend on the quality of the conversations.

and then again on Friday, October 04, 2002 writes:

"Let’s Not Be Fooled Planning is conversation….
…Let’s stop fooling around on projects. Stay in conversation with all key performers and insist they do the same with those people supporting them. Use those conversations to continue exploring possible ends and means. It is the one and only avenue for succeeding with projects.

That’s all very very important stuff that I think so many remodeling contractor’s ignore or never even think about.

by: admin

Okay I’m just getting set up here to start blogging on the issues I’m interested in the realm of Building and Remodeling and we’ll see where all this goes..

by: admin

Here’s a list of great quotes from from The Goal: A Process of Ongoing Improvement that I found via Duke’s Tool Page which is a great starting point for a bunch of web pages full of good tips and ideas on management created by Duke Rohe of the Office of Performance Improvement at the University of Texas M.D. Anderson Cancer Center.

I’ve gone on to start adding to the list with my own picks from Critical Chain as I’m re-read through it.

1. If you are like nearly everyone else in this world, you have accepted so many things without question that you’re not thinking at all.
2. Every action that does not bring the company closer to its goal is not productive.
3. Productivity is meaningless unless you know what your goal is.
4. Your problems are you don’t know what your goal is.
5. You company’s goal is to make money or it’s not in business.
6. If quality was your goal, then how come Rolls Royce nearly went bankrupt?
7. Can we assume that people not working and making money are the same thing?
8. The best way to be shut down is to make money AND leave the competitors in the dust.
9. It is possible for a company to show net profit and a good ROI and go bankrupt. Bad cash flow is what kills most industries.
10. We need to increase net profits AND return on investment AND cash flow.
11. Throughput is the rate at which the system generates money through sales.
12. Inventory is the money that the system has invested in purchasing things it intends to sell.
13. Operational expense is the money the system spends to turn inventory into throughput.
14. Most people haven’t been managing according to the goal.
15. We are too busy turning process time into piles of inventory.
16. Investment is the same thing as inventory.
17. Knowledge:
    • Which gives a new manufacturing process that turns inventory into throughput is operational expense.
    • Which we intend to sell is inventory.
    • Which is used to build the system is investment.
18. Just pay me for the value of what you learn from me.
19. What’s more important to your management, efficiencies or money? (Better be money)
20. Do you realize the only way you can create excess inventory is by having excess manpower?
21. The goal is not to improve one measurement in isolation. The goal is to reduce operational expenses AND reduce inventories and increase throughput simultaneously.
22. Whatever lets us turn inventory into throughput is operational expense.
23. Bowl and match game is awesome to understand the accumulation of inventory and its effect on the throughput. Pg 106.
24. A bottleneck is any resource whose capacity to or less than the demand placed upon it.
25. You should not balance capacity with demand. Instead, balance flow of product through the plant with demand.
26. Does excess capacity equals waste. Yes and no. Yes if its products are stockpiling big time behind it. No if the fluctuations in the process behind it are starved for more inventory.
27. You have to learn how to run your plant by its constraints.
28. Most manufacturing plants don’t have bottlenecks. They have enormous excess capacities.
29. Most manufacturers have capacity hidden from us because our thinking is incorrect.
30. Loss in throughput is loss on the bottom line.
31. Whatever the bottleneck produces in an hour is equivalent to what the plant produces. Every hour lost at a bottleneck is an hour lost in the entire system.
32. A bottlenecks time is wasted when:
    1. Its product is sitting idle during a lunch break
    2. It is processing part that are defective
    3. It is producing parts that are not needed
33. Do all the parts have to be processed at the bottleneck or shifted to a non-bottleneck for processing?
34. We need specific fluctuation-reducing procedures for bottleneck-routed parts and processes.
35. The level of utilization of a non-bottleneck process is not determined by its own potential, but by some other constraint in the system.
36. A system of local optimums is not an optimum system at all.
37. Four elements of time:
    1. Setup where part spends time waiting for a resource.
    2. Process time where part modified into a new more valuable form.
    3. Queue where part spend time in line waiting while a resource is busy working on something ahead of it.
    4. Wait where waits for another part so it can be assembled.
38. Setup and Process are small in comparison of queue and wait. Queue is the dominant portion.
39. An hour saved at a non-bottleneck is a mirage.
40. Balance flow of a system, not capacity.
41. Incentives we usually offer are based on the assumption that the utilization of any worker is determined by his own potential. Faulty.
42. An hour saved at a non-bottleneck is worthless.
43. Good way to teach: How to persuade other people, how to peel away the layers of common practice, how to overcome the resistance to change.
44. Inventory is definitely a liability.
45. Process of optimizing throughput:
    1. Identify the system’s bottleneck.
    2. Decide how to exploit bottlenecks
    3. Subordinate everything else to the bottlenecks
    4. Elevate the systems bottlenecks
    5. Fix the next bottleneck
    6. Warning! do not let inertia to cause a system constraint
46. Eliminating priorities improve throughput.
47. If your system has excess capacity? You can produce product at the cost of the materials.
48. There are times when non-bottlenecks must have more capacity than the bottlenecks. If the upstream resources don’t have spare capacity, when this doesn’t happen, we are starving the bottleneck.
49. The more complex the organization the more interdependencies between the various links and the smaller the number of independent chains it composed of.
50. Policies can be a constraint of a system and it follows the same five steps to optimizing to.
51. Major obstacles to putting principles of the Goal in practice:
    1. Lack of ability to propagate the message throughout the company.
    2. Lack of ability to translate the books learning to the company’s procedure.
    3. Lack of ability to persuade decision makers to change some measures.

From Critical Chain

1. We all know that focusing is important" Johnny speaks softly "A manager who does know how to focus will not succeed in controlling cost and will not protect throughput. But what is focusing for us? We have come to know it as the Pareato Principle. Focus on solving twenty percent of the important problems, and you’ll reap eighty percent of the benefits. This is a statistical rule. But those who teach statistic know that the twenty-eighty rule applies only to systems composed of independent variables; it applies only to the cost world where each link is managed individually. (pg 91)
2. In the throughput world, focusing and process of on-going improvement are not two different things, they are one in the same (pg 95)
3. 
   The higher the uncertainty the longer the tail of the distribution.
4. "The difference between the median of the probability distribution and the actual estimate is the safety we put in" (pg 46)
5. "What you claim is that the major, negative financial ramification does not stem from spending too much money"
6. "Financially , the overruns are much less important that the overdue"

by: Jerrald Hayes