Engineering Resource Management using Theory of Constraints

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Engineering Resource Management using Theory of
Constraints
CONFIDENTIAL
Presentation to SOCE, San Diego December, 2001
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Why a breakthrough is essential What is the core
problem How it can be solved case studies
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ENGINEERING ORGANIZATIONS ARE UNDER TREMENDOUS
PRESSURE
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Why a breakthrough is essential What is the core
problem How it can be solved case studies
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HOW MUCH PERCENTAGE GAIN IN CYCLE TIME SHOULD WE
EXPECT
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10
10
10
10
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UNCERTAINTY SHARED RESOURCES CHAOS
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RESULT WASTED CAPACITY UNPREDICTABLE AND LONG
LEAD TIMES
Long lead times Project delays Firefighting Multit
asking
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MORE COMMUNICATION ONLY CREATES INFORMATION
OVERLOAD
More data More reports More emails . .


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Why a breakthrough is essential What is the core
problem How it can be solved case studies
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PIPELINE OPTIMIZATION CONSTRAINTS-BASED
SCHEDULING

• Balance capacity everywhere
• Stretched project schedules
• Low capacity utilization

• Schedule bottlenecks first
• Compressed project schedules
• High capacity utilization

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CONTINUOUS FLOW EXECUTION BUFFER MANAGEMENT
Transient overload
Capacity
Capacity

• Use buffers to isolate critical work
• Critical work does not stop
• Stable priorities

• Treat all load as same
• Continual interruptions to flow
• Unstable priorities

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IMPACT ON BOTTOM-LINE
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EXAMPLES OF VALUE DELIVERY

• 4,000 people, 400 programs, 4 countries
• Time-to-market reduction 20-30
• On time delivery close to 100
• 3,000 people, 50 product and technology programs
• First program running 4-5 months late with
  Concerto, it finished 36 days earlier!
• Historical Seagate moment competition dropped
  out
• Return in 6 months Revenue 11M GM 5 M
• 1,000 people, 150 programs
• Time-to-market reduction 30
• On time delivery close to 100, a record
• Concerto used for operation reviews by CEO of
  this 1B company
• 100 people, 20 programs
• Time-to-market reduction 20
• We are now able to meet required delivery
  dates- says Avi Domoshevizki, CEO

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MORE EXAMPLES OF VALUE DELIVERY

• Managing 200 NPD projects simultaneously
• Substantial improvement in on-time delivery (from
  20 to 80)
• Over 100 IT professionals working on 75-100
  projects
• Excellent reception from users on simplifying
  management
• Complex engineer-to-order products
• Average lead time down from 9 months to 6.5
  months
• On-time delivery up from 50 to 90
• Hybrid mix of defense electronics and avionics
  products
• Key challenge in retrofitting and systems
  integration
• On-time delivery up from lt60 to greater than 90
• Throughput up by 20
• Very complex products, requiring integration of
  multiple modules
• Concerto delivered value within first 4 weeks by
  highlighting bottlenecks which were not obvious
  before

Israeli Defense Forces
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CONTACT INFORMATION
Presenter Sanjeev Gupta sgupta_at_speedtomarket.com
408-271-6574 Further Reading The Goal, Dr.
Eliyahu M. Goldratt Critical Chain, Dr. Eliyahu
M. Goldratt Managing The Design Factory, Donald.
G. Reinertsen
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CURRENT SOLUTIONS CAN PROVIDE ONLY MARGINAL
BENEFITS
Automate engineering

• Has reached a point of diminishing returns
• Local improvements do not always translate to
  global gains

Automate administration

• Does not impact the core process
• Eats into engineering capacity