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Min. net. lead time min. net. effort „impossible“ speed of light, no effort current situation in typical projects 0% 100% (2) the magic-question … … imagine.

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Presentation on theme: "Min. net. lead time min. net. effort „impossible“ speed of light, no effort current situation in typical projects 0% 100% (2) the magic-question … … imagine."— Presentation transcript:

1 min. net. lead time min. net. effort „impossible“ speed of light, no effort current situation in typical projects 0% 100% (2) the magic-question … … imagine – your division stays the exactly same, except: Your highest priority project is the only active project. All necessary resources are immediately available. Next steps start immediately after prior work packages are complete. Everybody in your division focus only this project. What must happen to lead-time and effort? there is significant potential for greater profits much higher sales due to reliability, shorter lead times, postponed investment and greater project throughput the symptoms are clear and transparent to management  two or more symptoms are in orange or red the project organization is self-contained enough  the greatest portion of added value is within the division (>60%)  there is a clear central (project) governance  more than 100 employees are involved in projects (5) requirements for Critical Chain (3) Throughput/Profit Potential current situation current situation * ΔT (%) Sales (S) k€ Fully Variable Costs (TVC) k€ Throughput (T) = S – TVC k€ Operating Expenses (OE) k€ Profit = T – OE k€ (4) profit potential Critical Chain Potential Check v © VISTEM.eu % = 1 % inc. Throughput (ΔT%) (1) Symptoms = potential … due date reliability - projects are finished without significant rework and they meet committed due dates 0% 100% project lead times compared with best competitors half as long double same project managers have the urge to start a.s.a.p. in order to have a chance to deliver their projects on time a.s.a.p. latest possible start negative multitasking – it is impossible to finish work packages without interruptions by other projects or day-to-day work Always happens Never happens as team leader your best strategy is to distribute resources equally across all projects Distribute resources equally Allocate the right Optimum # of resources % = inc. Profit (ΔP%) E%E% (A) (B) (A*(1+ΔT) (B*(1+ΔT) (X) (Y) (X)

2 min. net. lead time min. net. effort „impossible“ speed of light, no effort current situation in typical projects 0% 100% (2) the magic-question … … imagine – your division stays the exactly same, except: Your highest priority project is the only active project. All necessary resources are immediately available. Next steps start immediately after prior work packages are complete. Everybody in your division focus only this project. What must happen to lead-time and effort? there is significant potential for greater profits much higher sales due to reliability, shorter lead times, postponed investment and greater project throughput the symptoms are clear and transparent to management  two or more symptoms are in orange or red the project organization is self-contained enough  the greatest portion of added value is within the division (>60%)  there is a clear central (project) governance  more than 100 employees are involved in projects (5) requirements for Critical Chain ✔ ✔ ✔ ✔ ✔ ✔ (3) Throughput/Profit Potential current situation current situation * ΔT (%) Sales (S) 100 k€125 k€ Fully Variable Costs (TVC) 30 k€37,5 k€ Throughput (T) = S – TVC 70 k€87,5 k€ Operating Expenses (OE) 65 k€ Profit = T – OE 5 k€22,5 k€ (4) profit potential Critical Chain Potential Check v © VISTEM.eu 25 % = 1 80 % inc. Throughput (ΔT%) (1) Symptoms = potential … due date reliability - projects are finished without significant rework and they meet committed due dates 0% 100% project lead times compared with best competitors half as long double same project managers have the urge to start a.s.a.p. in order to have a chance to deliver their projects on time a.s.a.p. latest possible start negative multitasking – it is impossible to finish work packages without interruptions by other projects or day-to-day work Always happens Never happens as team leader your best strategy is to distribute resources equally across all projects Distribute resources equally Allocate the right Optimum # of resources 350 % = 5 inc. Profit (ΔP%) E%E% 22,5 (A) (B) A*(1+ΔT) B*(1+ΔT) (X) (Y) (X) Beispiel x x x x x x x x


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