Necessary but not sufficient in praxis

Necessary but not sufficient in praxis

 

I am going to share a particular example of implementing software technology from my own experience. I am convinced it shows common mistakes clearly.

One of the standard goals in many companies is to increase delivery performance. It is the case in our company, too. Approximately 15 years ago, one analysis pointed out that the reason for our bad delivery performance was the lack of computer planning and scheduling system in the plant. I cannot say if the result came from “good advertisement” of sellers of planning systems or because of the “cleverness” of our managers but the fact is, the project was kicked off. What is the result after all these years? Have we become better in delivery performance? No!

 

Using Dr. Goldratt´s four questions and quotes from the “Beyond the Goal” let´s try to examine the mistakes here.

Quote: Technology can bring benefit if, and only if, it diminishes a limitation.

To fulfill this sentence we have to answer following questions:

1. What is the real power of the computer system technology?

I believe that in this case the planning and scheduling system provides us with the big picture of a production plant’s situation so that a manager can make decisions at the right time in the right places because he or she has all the relevant data.

 

2. What limitation does this technology diminish?

 

This technology allows plant managers to take actions on resources that are the constraint. In other words, this technology identifies constraints.

 

3. What rules helped accommodate the limitation?

Which rules do we use now? We will have good delivery performance overall if we have good delivery performance at every WorkCentre. In other words, if we fulfill all due dates for each plant order that is terminated from MRP-Job, without consideration for the connection between constraint and non-constraint resources, then we will have success.

The next rules are measurements. Most of them come from the “local optima world” and are independent to each other. As a result, the sales department is measured upon the amount of incoming customer orders and the production department is measured on local efficiency. The result is obvious. The salespeople will accept a customer order regardless of the situation in the plant (capacity offer, etc.).

 

4. What are the rules that should be used now?

These new rules should reflect the whole system and organization with its connections. Thanks to ERP, we have to make the decision process using TOC (Theory of Constraint) logic. For example, the salesperson’s decision to accept a new customer order will incorporate the desired delivery date. Putting the order in simulation mode in an APS system, the salesperson would get an answer on what impact a customer order would have on the flow and constraints in the plant. If the delay would be measured in dollar-days and the simulation would show the impact on constraints, which includes the whole production flow and all orders, then the decision should be easy to make.

5. What changes are required in the technology?
I think that is the easiest. If there is a goal, a path is always there too.
6. How to cause the change?
The answer is using Goldratt´s thinking process. See also available resources on the internet.

Now it is obvious why we did not succeed in increasing our delivery performance. On one hand, we bought an APS-system for planning and scheduling production orders in the plant but on the other hand, the sales department accepts almost every customer order with their “wish” delivery dates without examining the impact on the whole system. The measurements for department sales are obvious. New technology was purchased but the old rules were not changed. The answers to questions 3 and 4 need to be considered.

Using these questions and common sense would bring us the real benefits of computer technology. Unfortunately, this approach is not used for IT projects around the globe. What are your opinions or experiences?

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