THE PURPOSE OF THE BOOK To change Goldratt educational systems to better accommodate the quickly changing world of business. The book starts by pointing out the problems with how time estimates are normally done on projects. To provide a primer on the Theory of Constraints and an example of its implementation in a steel mill. To proceed to show how the Theory of Constraints can be applied to schedule generation, resources constraints and multiple projects.
KEY IDEAS An information technology saying: "A project will run out of time but will never run out of excuses.“ Top management blames externalities, while project participants more-honestly place direct blame on internal politics and management. The estimate is judged at an 80% confidence point. That is, the estimator believes there is an 80% chance that an activity will be completed within this time.
As a summary of bookThe main story in the book is about an associateprofessor named Rick Silver who is struggling tomake it in the academic world. young businessprofessor.He and his Executive MBA class learntogether, using the Socratic method, as theydiscover and apply radical new projectmanagement concepts. The principal sidecharacters are a young task force charged withdramatically reducing a modem manufacturer’stime-to-market cycle. He is a very good teacher, buthe wants tenure and is in need of publications. Hisarea is project management and he wants thearticles to make a difference in this field. The fact isthat the theories applied to project managementare not effective and projects are running late at
Think Tank:A group Budget Overruns: or an institution The amount by which organized for intensive research and solving of the actual cost of a problems, especially in project exceeds its the areas of budget. While this technology, social or does not necessarily political strategy guarantee that the project will fail, it does make it more difficult to succeed. This is also called cost overrun or budget overrun.
Time Overruns: Time overruns occur when projects or tasks within a project is not completed by the time the project plan specifies. This can occur when materials to complete a project are back ordered and work cannot be completed until the materials arrive.
Bell Curved:"Bell Curve" is the popular name for Normal Distribution (also called Gaussian distribution). It is often called the bell curve because the graph of its probability density resembles a bell. It can be used to measure anything.
PERT and Gantt techniquesPERT is a statistical tool, used in project management, that is designed to analyze and represent the tasks involved in completing a given Project, especially the time needed to complete each task, and to identify the minimum time needed to complete the total Project.
Critical Path is defined as the longest chain of dependent steps (longest in time) and it determines the time it will take to finish the Project.Any delay on the critical path will delay the completion of the
Gantt Charts unlike PERT Diagrams, involve decisions,the decision of the planner when to start each path.Somebody of them chose the late start for picking the vendors while the other one has chosen the early start.
THEORY OF CONSTRAINTs( TOC ) At first,it was related to production scheduling. Then it became a banner to attack “product cost” methods,then marketing. Lately ,it seems TOC is more connected with methods to remove friction between people.
THEORY OF CONSTRAINTS( TOC ) TOC is a blend of three different breakthroughs : First one,as we all suspected,is that TOC is actually a new management philosophy like ,TQM,JIT,Re- enginnering,the learning organization.. Second one;is the research methods it introduces. Third one, the one TOC is known for the most,its broad spectrum of robust applications.
Identify the system’s constraints as physical,like a bottleneck,type of resource that does not have enough capacity to meet the demand.In that case, strengthening the weakest link will mean to help the bottleneck to do more.There are two different ways to strenghten a bottleneck. One is simply add more capacity,by hiring more people or buying more machines
Triggering the student syndrome in the resource assigned to the task - they have more than enough time to do the task, therefore they start the task late using up all the safety.
The Evaporating Cloud is suited to finding a solution to conflict between two parties or two points of view. The method requires theparticipants to find win-win solutions because it emphasizes that both parties are trying toreach the same ultimate goal.
W-WWhen you win andthe other personwins, instead ofone winning andthe otherlosing, theneverybody ishappy and therelationship getsstronger as abonus.
BUFFERSThe identification and insertion of buffers: project buffer feeding buffers resource buffers
PROJECT BUFFER It is inserted at the end of the project network between the last task and the completion date.
PROJECT BUFFER • Any delays on the longest chain of dependant tasks will consume some of the buffer but will leave the completion date unchanged and so protect the project. • The project buffer is typically recommended to be half the size of the safety time taken out, resulting in a project that is planned to be 75% of a “traditional” project network.
FEEDING BUFFERS • The safety time on the end of the critical chain is called the project buffer.
FEEDING BUFFERS• Delays on paths of tasks feeding into the longest chain can impact the project by delaying a subsequent task on the Critical Chain.• To protect against this, feeding buffers are inserted between the last task on a feeding path and the Critical Chain. The feeding buffer is typically recommended to be half the size of the safety time taken out of the feeding path.
RESOURCE BUFFERS Resource buffers can be set alongside of the Critical Chain to ensure that the appropriate people and skills are available to work on the Critical Chain tasks as soon as needed. The safety time should be large enough to insure the resource has at least a 50% chance of finishing the specific tasks on time.This safety time is called a resource buffer.
VENDOR MANAGEMENT The abstractions of project management are instantiated by having portions of the project supplied by other firms. That is, the simple metrics of "minimize cost," and "deliver by this date" may be implicit for internal teams, but they have to be explicit for vendors, and there is less opportunity for fine tuning, and more motivation for protection.
VENDOR MANAGEMENT The importance of schedule, and ways to improve it, can be explored by negotiating tradeoffs between it and cost. • What cost incentives for early delivery will they respond to?• What cost penalties for late delivery will they accept? More importantly, what penalties should we be seeking to imposeto capture our own opportunity costs and the expenses of a • slip? schedule Small delays can create big impacts on profitability, improvements in delivery schedule will often be worth a premium. But focus this effort where it matters - in the critical path, and the critical chain dependencies within it.