Process of ongoing improvement using TOC and Lean bodies of knowledge

Project, programme and portfolio management and BAU (business as usual) can all benefit from the knowledge and tools supplied by the Theory of Constraints and Lean Six sigma bodies of knowledge. We will briefly cover these topics here; I recommend that if you are not already familiar with them then take time to further research each of these bodies of knowledge.

Use TOC to cover areas such as:

  • How to think through different scenarios in a logical in structured way.
  • How to work with management accounting to ensure that you deliver value.
  • How to focus on what needs to be done to achieve your Goal
  • Identifying and removing constraints
  • Resolving conflicts by understanding the assumptions behind each conflict

Some of the TOC Thinking Tools that I use most with change and project management.

Intermediate objectives map (IO Map). This is a leadership tool and thinking process that enables the organisation and individuals to focus on identifying the conditions that need to be fulfilled. Then we can ascertain which activities are needed to fulfil the conditions.

Current Reality Tree (CRT) is used to analyse the causes of problems within the organisation.

Evaporating cloud or Conflict Resolution Diagram is used to identify and validate assumptions behind a conflict

Future Reality Tree (FRT) is utilised to summarise actions and the expected result and status of the organisation after the action.

Strategy and Tactic Tree (S&TT). This is a management tool in that it shows everyone in the organisation how to do things right.
The S&T Tree can be used as a roadmap laying out each of the steps needed to get you from your current state to the future state. The S&T Tree is an effective planning and communication tool that enables you to break down change initiatives into manageable steps that enable everyone to see progress.

Critical chain project management scheduling (CCPM) method

Read more about this here…

Throughput accounting

The Throughput accounting concept of TOC supplies a management accounting system that focuses on the value to clients and what they are prepared to pay for your product. Cost accounting tends to focus charging for the effort you have put into creating Customer Valued Functionality, the client may be able to get the same functionality cheaper from another provider.

Example: TOC and Lean management working together.

Lean management works on reducing time to delivery, we can use the five focusing steps recommended by TOC to identify constraints that prevent us from delivering a project in the shortest possible time.

  1. Identify the bottleneck (system constraint) in the system
  2. Think and decide how you can best manage the bottleneck
  3. Focus on the decision in step 2, allocate other challenges/ constraints to a subordinate level
  4. Solving the bottleneck/constraint is our highest priority (Elevate)
  5. Once the identified bottleneck is removed look for the next bottleneck.

Companies providing Internet retail solutions make money from the licences for products as well as customised solutions for individual clients. Therefore to improve Throughput (€) , the provider will want to deliver an optimal number of solutions in a given time period. The clients will normally want their solution up and running as soon as possible, so that it can start generating income and get a Return On Investment.

Step One of the Focusing Steps:

The constraint on any development system is the speed at which the system can deliver a “quality” finished product to the client.

Step Two:

The system (Provider) can optimise on delivery times by focusing on the development schedule. By planning the development based on available resources and the correct sequencing for the processing of requirements. The CCPM method is ideally suited for this.

Step Three:

Make sure that all concerned understand that the organisation will use CCPM to schedule projects. Implementing this methodology has priority. Other activities and processes must not slow down or hinder the implementation of CCPM.

Step Four:

Create the delivery schedule based on Critical Chain Project Management (CCPM) for individual projects. The implement the Critical Chain process for all projects.

Use the Lean Six Sigma concepts and tools to focus on:

  • Reducing time to delivery
  • Eliminating defects.
  • Eliminating waste
  • Creating only what delivers value.