Management Dilemmas - Part Two

I've made a very little amount of headway on the book I'm reading now, Management Dilemmas: The Theory of Constraints Approach to Problem Identification and Solutions. Time has been tight with work, school, and family but I'm trudging through slowly.


The case studies continued in the chapters I've read since the first post about this book. One concerns a situation with a purchasing manager who is trying to deal with a complete product change that has an uncertain implementation date. There are constraints around how much can/should be ordered, and the premiums required for smaller batches. The problem here is to not fall short of materials for production of the old product, and at the same time not have a huge amount of waste after the change, because all the existing materials will be obsolete when the change occurs. Upper management is incenting conflicting actions, and traditionally the purchasing manager has to try and 'balance' them. I like the TOC approach.

Another chapter goes into a scenario where a company founder split his company into profit centers in order to incent his managers to perform. The case study analyzes the situation and some of the resulting problems that have come to light over a period of two years. The plants have fixed transfer costs built into their outputs when they are provided to the other plants, and again this is a question of whether or not the right things are being incented, in the right way. The TOC solution presented resolves the conflict and acheives the founder's original vision.

I will do another post on this book when I've completed it. Cheers!

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Management Dilemmas - Part One

I'm about half way through the book I'm reading now, Management Dilemmas: The Theory of Constraints Approach to Problem Identification and Solutions. It was difficult to get into it at first, perhaps because the author made an appropriate introductory section going into the conceptual aspects of the TOC thinking processes, the Throughput world versus the Cost world, etc. which I've already read extensively about. Overall, good content in the beginning but a little slow and university textbook-like reading.

Then it gets good.

The author continues with several case studies to highlight various management problems in different industries, and very different causes and circumstances. In the first section a case study is used too, but plays a minor role in the content. These later chapters dive into the scenarios presented and I'm finding myself quite engaged with them. It's as if you are playing the part of a consultant, and need to correctly diagnose the core problems that are causing the evident symptoms. It's like detective work and I'm working through my own TOC diagrams to practice after I read the case, and see if I come up with the answer the author does. My diagnoses have been similar thus far.

The case studies so far have included problems in a hotel, office supply company, a high-end desk lamp manufacturer, the Army's Central Communications Laboratory, and a hospital. It's been great for showing examples of using TOC to solve problems in this eclectic mix of situations, and giving me practice at the TOC concepts. I hope as I internalize more about TOC, CCPM, and EVM I will be better suited to figure out the CCEVM solution.

I will do another post on this book when I've completed it. Cheers!

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TOC and Critical Chain - Book recommendations

These are all good TOC and Critical Chain books I've personally read to date (that I think are good.) I recommend reading them in the listed order. The ones I list as concept books are important to read first so the more technical books make sense.

Theory of Constraints (TOC)

• The Goal - THE TOC concept overview, novel form
• Necessary But Not Sufficient - TOC and ERP concepts, novel form
• Theory of Constraints - Technical aspects of TOC, further concept depth

Critical Chain Project Management

• Critical Chain - THE Critical Chain concept overview, novel form
• Project Management in the Fast Lane - Technical aspects of Critical Chain
• Projects in Less Time - The Basics of Critical Chain
• Critical Chain Project Management - Generally touted as one of the best CCPM books
  

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What is TOC?

I'm a Theory of Constraints (TOC) enthusiast. So what exactly is TOC? Here's a short, short summary.

In short, it's a method of identifying and strengthening the weakest link (constraint) in any process, in an iterative approach to ongoing improvement. There are also tools that go along with it to help identify assumptions and constraints, etc. TOC was developed by Eli Goldratt. The Avraham Y. Goldratt Institute is the organization that maintains the TOC body of knowledge.

Part of TOC are the 5 focusing steps, which speak to using TOC for continuous improvement:

1. Identify the constraint
Figure out where the bottleneck is, from a total system perspective, not a local part of the system.

2. Exploit the constraint
Get the most you can out of the bottleneck, it will directly increase the throughput of the whole system

3. Subordinate everything to the above decision
Change habits and policies if need be to make sure you are getting the most out of the constraint. No more "this is the way we've always done it." Also, don't put more work into the system than what the constraint can handle, it just builds up work in progress (WIP) in front of the constraint. This means running a machine in a manufacturing process (for example) so you're getting 100% utilization is the wrong thing to do if it's just building up WIP in front of the constraint. Change your thinking....we want global optimization, not local optimization. Nothing is sacred except the goal of global improvement.

4. Elevate the constraint
If you need more throughput from the constraint still, consider adding to it's capacity by offloading some work, adding extra resources, etc. Speed up the bottleneck!

5. Go back to step 1 once the constraint is broken
"Breaking a constraint" means that you've improved the bottleneck to the point that now, the bottleneck has moved to somewhere else in the system. Now, don't let the new processes and policies become roadblocks to future improvement! Go back to step 1 and start over!

Here's a TOC concept cartoon from TOCCA

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12/31/2006 - Maiden Post

Hello, my name is Josh Nankivel. I'm creating this blog as a way for me to formulate and refine my thoughts about project management and process improvement. Hopefully it will help my writing and make me more articulate and clear. To start with, here's a little about me.

I'm in school now majoring in project management. A year from now I will be done with my BS and started on my masters degree, an MBA with a concentration in project management. At work, I'm in information systems and work on many small projects alone, and also in larger projects as a team member and project lead. I am full time both at work and school, so with all that and the family I've got little spare time, which I usually use to read and think about project management.

I've been in technology-centric positions for about 11 years now, half of that as a techie and half as a manager. I've got a LinkedIn profile with some more info. Some of my specific interests include various project management methodologies, the Theory of Constraints and related project management applications like Critical Chain, Earned Value Management applications, and process/business improvement methodologies. I read a lot of books, listen to a lot of podcasts, and absorb as much online content including articles and forums as I can.

Hopefully I will be able to find some time to post to this blog at least once a week or more.