Toc service industry

SPIN CHENNAI, JAN 23, 2016.
Krishna Sivaramakrishnan,TOC, Lean, Agile and Business Excellence Professional
https://3point4.wordpress.com/
THEORY OF CONSTRAINTS
All rights reserved.

• What is TOC Developed by Eliyahu M. Goldratt
Any system can produce only as much as its critically constrained resource.
TOC Helps
• What does “TOC” mean to you?
Boost performance by looking at entire processes. The sum of local optima is never better
than and usually worse than the global optimum.
• What is successful TOC project / program
Increase the throughput to maximum using leverage points / constraints
– People centric ways to create innovative solutions simplicity
– Market Centric Ways to maximize Business Value Global thinking
– Product centric vs Wasteful processes Productivity
THEORY OF CONSTARINTS
Throughput Inventory Operating Expense

Constraint: Anything that limits a system’s performance relative to its goal
Inventory: All the money used to purchase things the system intends to
sell… unfinished work in software development. MINIMIZE.
Throughput : Rate at which organization generates goal units(revenues).
The Dollar value added from the delivered production units (FP/SP/Size).
INCREASE
Operating expense: The money a system spends to turn inventory into
throughput, in Software total number number of production units that have
moved through the SDLC system to date. DECREASE
Non Constraint : Any resource whose capacity is more than the demand
placed on it
Goal
Constraint
Throughput
Operating
expense
Inventory
Bottle Neck
TOC – Key terms

1. What to change:
Find what should be changed, to effectively improve the
performance. Limited time, effort and resources make it difficult.
2. To what to change to:
Once the core problems have been identified, the next step is to find
the solutions.
3. How to cause the change:
If 'to what to change to' is identified, but if it is not possible to
cause that change, then the solution is not of much use.
TOC FRAME WORK
What to
Change
How to cause
the change
TOC Frame Work
What to
change to

Source : https://www.toc-goldratt.comhttp://elischragenheim.com/
Always look for signals that challenge our current understanding. Taking actions only within
the comfort-zone is a wide-spread compromise of the conflict.
This is the essence of living in uncertainty, partially knowing and partially not knowing. We
need to make decisions that would never hit us too seriously and most of the time will
bring huge benefits.
Pillars of TOC

Identify the
Constraint
Exploit the
Constraint
Subordinate
to the
constraint
Elevate the
constraint
Go to step 1
Five Focusing steps

Step 1: Identify the Constraints
Goal is to achieve CMMI Maturity
Constraint: Anything that limits a system’s performance relative to its
goal
Types of constraints CCR factor - Impact %
Market (10)
Resources (resistance) (15)
Tool capability (15)
Unawareness (20)
Schedule pressures (20)
Customer unwillingness (10)
Non relevance (10)
Identify the
Constraint

Identified the constraint
Problem that needs to addressed: Total estimated Time: 14 months
18 PAs, 140+ SPs and GPs. Mapping features in tool enhancement = CMMI gate ??
During first Four months into the journey some movement of Process definitions. No new features
implementation (Assumption was only 10-15% extra features required) Overall movement 10% of the
CMMI program . Tool needed to sync with completed definitions.
In remaining Eight months, needed to crack the combination of Tool Cap
implementation by the organization, review, audits and final assessment should be a success!
Identify the
Constraint

Step 2 : Exploit the Constraint
Exploit here means maximize the flow / output / returns from the
constraint without additional resources / effort / investment
Exploit the ToolCap. Mini group for Tool enhancement, pilot Tool features into their
own projects
ToolCap pilots helped implementation effort for projects. Buffer of three member
team (resource buffer) to prop up the speed through the CCR, which is the ToolCap.
QA side simultaneous facilitation provided (effort ands schedule buffer).
Exploit the
Constraint

Step 3 :Subordinate everything else to the Constraint
• Non Bottlenecks / Non CCR should be made to support CCR based on CCR priorities.
Efforts of Non CCR Process Areas were subordinated to CCR – PAs. Functional and non
CMMI activities helped by resource buffer effort sharing. Training, Tests, SEPG reviews,
Audits, walkthroughs.
• Non Constraints (most of the system) recognize that their own efficiency is not as
important than supporting the system constraint. Tasks other than requirements of
CMMI down prioritized by SEPG
Changed ways benefits:
(ToolCap)optimization ( 5 months- 10 % -- Next 9 months 100%)
Overall of net benefit for the whole organization is saved effort 30-35% after month 7 of
implementing 5 - FS
Subordinate
to the
constraint

Evaluate alternative ways to elevate one or more constraints.
We had PHI, THI audits to ensure compliance to CMMI requirements. improved the process
adaptation by projects significantly.
From sixth month onwards Program progress of CMMI steadily accelerated to meet the schedule
Predict where the future constraint will be (after elevation) and its impact on global performance
Elevate the
constraint
Step 4 : Elevate the System’s Constraint

Do not let inertia become the constraint, If in the previous steps
Constraints have been broken goto step1.
Elevate the
constraint
Step 5 : Go back to step1

Time Buffer + Resource
Buffer
Ensures JUST enough work
for CCR
During training the
organization on ToolCap +
ToolCap team
Definition
Input Goal
Drum set the pace of the CCR
CCR Bottle neck ToolCapNon constraints Non bottle necks
Non constraints Non bottle necks
Rope Feedback to ensure
Input release does not exceed CCR
capacity focus on Engg and
subordinate support
IR1Month4
IR 2 IIR 1
IIR 2 IR 3 IR4 CMMI Rating
Drum Buffer Rope
IR2Month5
Resource Buffer - SEPG, QA
reviews and facilitation
IR3Month-11,80%
IR4Month13,95%
IR4Month14,100%
Problem that needs to addressed: Total estimated Time: 14 months
18 PAs, 140+ SPs and GPs mapping features in tool enhancement = CMMI gate

Attuning to TOC
The power of compounded continual simple habits
(1.01)^365=37.78
Enjoy the seeds of discipline for the Yield
(1^365)=1.00
Status Quo = Long term loss
(0.99)^365=0.03
Suffer the pain of regret

References
http://www.goldrattconsulting.com/
https://www.toc-goldratt.com
http://elischragenheim.com/
Let us stay in touch!
Blog
https://3point4.wordpress.com/
Krishnakanna@gmail.com
LinkedIn
https://in.linkedin.com/in/3point4

Goal
Constraint
Throughput
Operating
expense
Inventory

Toc service industry

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (6)

Similar to Toc service industry

Similar to Toc service industry (20)

Recently uploaded

Recently uploaded (20)

Toc service industry