Safety Time - Versli Lietuva

Keynote Speaker: John L. Thompson

Exponential Growth: Kreisler Manufacturing, Inc.
Exponent Growth Strategy: Create surplus capacity using TOC and then sell this as Reliable Rapid Response on
48 hour turn around to major clients at prices related to lead time performance demand.
Summary from a slide presentation given by the Management of Kreisler Manufacturing Corp.
TOC Upgrade Memphis TN – 1999.
Company
� Sales $13 million
� Employees 100
� Facility 52,000 sq/ft
� Customers
�Pratt & Whitney
�GE Aircraft Engines
�Rolls Royce
�Mitsubishi Heavy Ind
14
12
10
8
6
4
2
0
Revenue
19 9 4 19 9 5 1996 1997 1 9 98
Delivery Performance
� Sales up 128% in two years
� Delivery up from 65% to
95% in two years
� Capacity 12 months ahead
of competition
100%
75%
50%
25%
0%
Nov-96 May-97 Nov-97 May-98
Products
� Products
�Tube and manifold
assemblies
�Sheet metal baffles
�Complex welded
fabrications
�Hot formed titanium
components
� Processes
�Brazing and welding
�Heat treating
�Non-Destructive testing
$60
$50
$40
$30
$20
$10
$0
2.63
Growth plus Stability
Kreisler Stock Price
5.00
8.00
23.50
©Global Focus LLC. Jan2008
TOC Productivity
� T/OE
� Throughput
�Net Sales
�Materials
�Overtime
� Operating Expense
�Overhead
�Direct Labor
�SGA
52.00
Aug 96 Aug 97 Aug 97 Sep 97 Nov 97
1.50
1.00
0.50
0.00
0.70
0.59
0.77
1.12
1.30
1994 1995 1996 1997 1998
Introduced TOC
Fasten your seat belts
William Green, 12.15.97
FORBES MagazineDecember 1997.
Kreisler hit $53.88 on Nov. 12 and is now
trading at $52. That’s a 1,880% increase in a
little less than 15 months.
Global Focus LLC
John L. Thompson
Global Focus LLC
USA 203 376 3575
JohnT@GlobalFocusllc.com

600 Young Street • Tonawanda, NY 14150 • Phone 800.654.6360 Fax 716.693.5854
SR Instruments, Inc. has been providing solutions for 30 years. As an ISO 9002 certified company, SR Instruments has been manufacturing quality sensors
and instrumentation for the medical, land and marine animal, and sailboat industries worldwide.
SR Scales utilizes expertise in load cell design and manufacturing making the company a leader in the industry for the development of highly specialized,
precision scale systems. SR Scales offers a complete line of scales from pediatric to bariatric, as well as applies this same advanced precision technology to
the veterinary, marine, and zoological community.
IMPLEMENTATION RESULTS
Revenue Increase 83%
Inventory to Sales reduction 50%
Expenses Stayed Flat
Net Profit Increased 130%
PROJECT PAYBACK Months to first visible results
Strategy and Application:
All the Theory of Constraint Applications:
Market Segmentation, Production and Distribution.
©Global Focus LLC WWW.GolbalFocusllc.com
OTHER BENEFITS
On-time performance
From 5 days late to 95% OTD
Lead times From 8 Weeks to 48 Hours any destination
Global Focus LLC
John L. Thompson
Global Focus LLC
USA 203 376 3575
JohnT@GlobalFocusllc.com

Sales
$10M
Distribution
Cooling Towers Offer
Sept 11
DBR DBR
$22M
$16M
$21M
500, Inc 2008
Fastest Growing
Private Companies
$32M
Full Strategy
$43M
1996 1998 2000 2004 2006 2007 2008
2009
$50M

Using TOC to focus LEAN and build competitiveness
Strategy and Tactics:
Dealing with Variance begins at the top with Corporate Strategy
Ensure that the operational capability exceeds the demand:
Learn how the logistical solutions combine
Operations, Projects and Distribution
Is it worth the effort?
Calculating the value of released capacity
Increasing project velocity
Selling the additional Capacity:
Analyze appropriate Markets
Constructing an Unrefusable Offer
Sell the Offer to select Customers
Execution:
Use Critical Chain Project Management
to implement the Business Plan

Testing the Organizational Will to Commit?
An Organization is typically in one of three states of mind:
Ambitious And possibly “frustrated” by having “missed opportunities”.
An intolerance for mediocrity.
Complacent “Life is Good” – curious and possibly ready to listen,
but not willing to move to action. Opportunity blindness.
Crisis If this does not work - “it’s possibly our end”.
This also applies to Departments, mainly due to the silo’ed reward system.
© Global Focus LLC
All rights Reserved.

The Importance of Ambition
Small or large investments require the same amount of effort, so concentrate
on large investments.
Stretching Goals elevates purpose:
Reduces the Decision Options:
• The higher the goal – the fewer the options there are to achieving it.
Reduces Introspective Behaviors (Blaming others):
• Teams are too busy engaged in change to blame each other for daily
frustrations.
Removes the Silo effect
• There is no option but to work together if the Goal is large enough.
Fosters Collaboration (counters lack of purpose and mediocrity):
• Meaningful Goals harness collaboration.

Opportunity and Variation Starts at the Top
Level of influence Methodologies Focus
Strategy
Induced Variation
Management
Induced Variation
Demand / Vendor
Induced Variation
Supervisor
Induced Variation
Process
Induced Variation
Operator /
Technician
induced Variation
LEAN
Eliminate Waste,
Decrease product
cycle time
What is not
adding value?
What blocks
more Goal units ?
TOC
Maximize
System Value
(Throughput Velocity)
6 Sigma
Remove Defects,
Minimize
Operational
Variation
What is causing
variation?
Global Objectives
Redefined
Division/Department
Objectives Realigned
Exploiting / Elevating
External Constraints
Realigning
Local Activity
with
Global Objectives
Local Activity:
(balanced capacity
trap = Increased
Dependency, Local
Optimization)

Strategy and Tactics
Traditional S&T Vs.
TOC S&T
Strategy
? ?
Tactics Tactics Tactics
Middle Management
Interpretation
and Execution
Strategy
Tactics
Strategy
Tactics
Strategy
Tactics
Strategy
Tactics
Strategy
Tactics
Strategy
Tactics
Strategy
Tactics

Significant Vision
Verify
Opportunity
Delivery
System
Architecture
Applications
Execution
Tame
Input
0.0 Generic Strategy and Tactic Map ©Global Focus LLC
Choke
Release
Install
Buffers
Active
BM
4.0
Maximize
Flow
Priority
System
BM
Dianose
3.0
Build a System
POOGI
Elevate
Capacity
2.0
Select a URO
4.1
Measurements
Align
Rewards
Monitor
Segment
3.1
Capitalize
4.2
S & M
Sales
Cycle
©Global Focus LLC
1.0
Ambition & Value
Target
Prospects
3.2
Maintain
4.3
Pipeline
Customize
Offers
Feedback
Monitor
Emerging
Constraints
2.1
Exploit the URO
4.4
Elevate
capacity
Justify
Elevation
3.3
Grow
4.5
New Market
Segments
Selection
of new
Markets
10
Develop
Sales Cycle

Stability and Growth
©Global Focus LLC 2000

Growth
&
Stability
Growth and Stability Dilemma
Assumption: Growth Produces Value?
Bold
Strategic
Initiatives
Maintain &
Develop
Processes
Focus
resources on
bold Strategy
Solution: Develop Management at all levels
Focus on
incremental
change
Assumption: Growth and Stability are mutually exclusive?
However, the eventual constraint to growth is insufficient Management.

Leadership: Responsible for the coordination of Growth plus Stability
Need for
Stability
Security
Pragmatic
Preservation
Leadership
Co-ordination Bridge
Peeling Layers of Security 1, 2, 3, 4, 5, 6, 7, 8.
Communicate & Engage
Masses
Critical Mass:
Formal and Informal
Opinion Leaders
Influential Individuals
All levels
No significant movement will occur
without their engagement
Ineffective
Remove: they
demoralize
the rest
© Global Focus LLC
Visionary
Progress
Need for
Growth
Satisfaction

TOC Applications / Tools
Source of Variation Description of Dilemma TOC Applications / Tools
Board Room
Executives
Management
Marketing & Sales
Supervisory
- Ambiguous Direction
- Misaligned
Departmental Objectives
- Silo’ed Interpretation
- Unstable Demand Patterns
- Declining Market Share
- Local Behavior not
aligned to Global
Objective
Operations Balanced Capacities
- Strategy and Tactics Tree
- Setting an Ambitious Direction
- Thinking Process
- Management Skills
- Capacities > the Demand
Fluctuation
- Change Management
- Project Management
- Unrefusable Market Offers:
- Market Segmentation
- Reliability and Availability
- VMI, Radical Guarantees, -- Short LT
- Project Management
- Sales Team Development
- System: Maximize Flow
- Constraint Management
- Process Improvement
- Project Management
- Buffer Management
- Reduced Batches
- Process Improvement
- Project Management
©Global Focus LLC 14

10
90%
14
75%
10
90%
10
69%
Efficiency Vs. Flow
10
90%
9
95%
10
90%
16
79%
©Global Focus LLC 2000 Confidential Not
for Distribution
10
90%
12
87%
= ?
= ?

14
75%
12
95%
10
69%
9
95%
16
79%
Balance Flow
12
95%
10
95%
12
95%
12
87%
12
95%
= ?
©Global Focus LLC 2000 Confidential Not
for Distribution

Sustainable Growth
Growth and Control
Ensure Stability / Control:
All Capacities must be greater than
the fluctuation in Demand placed
on them.
Constraint
Capacity
Balance Flow
©Global Focus LLC
Demand
Fluctuation
17

2
days
5
days
7
day
3
day
3
day
Batch Size 20 Units
20
20
20
20
Cycle Time 400 days
Impact of Batching on Flow
Days / 1 Unit Days / Unit
= 40 days
= 100 days
= 140 days
= 60 days
20 = 60 days
2
days
5
days
7
day
3
day
3
day
1
1
1
1
1
= 2 days
= 5 days
= 7 days
= 3 days
= 3 days
Cycle Time 140 days
+ 7 days x 19 units

Is it worth the effort?
Financial Results by not Batching
Creating just a 20% operational improvement
Before
Process
Improvement
After
Sales 100 125
TVC / RM 50 63
Throughput 50 20% 63
Labor 15 15
Fixed OE 15 15
Net Profit 20
Profit
Improvement 33
63%

A Simple Project
Execution – a simple project
Task A Task B Task C
Task D Task E
An assumption of Sufficient Safety embedded within each Task.
Due Date
A Simple Project: the embedded Safety Time within each Task, exposed.
©Exepron
Safety
Time

Option A:
Adding sufficient Safety Time can account for any
ACCUMULATED Task slippage.
Vs.
Task Duration Dilemma
Option B:
Removing Safety Time will counter competitive pressure
for shorter delivery dates.
Just how much Safety Time is sufficient?
©Exepron

In Projects: What determines Cycle Time?
Longest Chain of Dependency –
both Task and Resource Dependency
©Exepron

Simple Project: exposing the embedded Safety Time within each Task
If the safety time embedded within each Task is
sufficient, how come most projects are late?
Reality: Slippage
Tasks take longer than expected,
mostly due to interference.
Interference
Legitimate Touch Time Illegitimate Slippage Time
©Exepron

Interference = Lack of Focus = Multi Tasking = Changing Priorities
Planned
Time for A
A B C
←Interference→ ←Multi-Tasking→
A A A
Other
Duties
Actual Time for A
B
Other
Duties
©Exepron
C
B
C

Task Time + Safety Time = 8 days
8 8 8
8 8
Critical Chain Method: Extract the embedded Safety Time, aggregate it and use it as a
Dynamic Radar Screen / Buffer ahead of dependent Tasks.
1) Halve the Task Times 8 / 2 = 4 days (Shorten the task duration and remove safety time).
2) Aggregate the removed Time and position it as a buffer ahead of the dependent Tasks.
3) Practice Active Buffer Management or early Intervention in response to Task slippage.
4 4 4
4 4
©Exepron
Solution
Remove the Safety Time from all tasks
and move it forward where it is visible
and available as needed →
At the HEAD of the project
Exepron’s imbedded
intelligence calculates and
inserts the buffers
automatically

Feeding Chain
Final Solution
Critical Chain:
The longest Chain of Dependency, both Task and Resource Dependency.
Critical Chain
Project Buffer
Feeding Buffers at integration points
(Protecting the CC from Feeding Chain slippage).
©Exepron

The final Critical Chain PM Schedule
Feeding Chain
Feeding
Buffer
CC Longest Chain of Dependency:
Both Task and Resource Dependency
©Exepron
Project Buffer
The Critical Chain is ‘fixed’:
A relative stable datum line, creating certainty in a ‘sea of potential chaos’.
1/ ID the Critical Chain – ‘Fix’ its position.
2/ Protect It - Feeding Buffers and Project Buffers.
3/ Fight to maintain its integrity – avoid interference time
Due
Date