ToC Lean Ops - Speaker Deck

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Amazing Ops using Theory of Constraints & Lean

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Should you listen to me?

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I read all these books

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sharing what I learned

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○ History & People ○ Theory of Constraints ○ Lean / Toyota Production System ○ Lean IT

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History & People

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Japan occupied by the Allied Powers until 1952. WWII to 1953 U.S. provided $5.9b to "Aid Asia". non-Marshall Plan $2.4b to Japan. $282m to Israel wikipedia.org/wiki/Marshall_Plan Japan post-WWII history & people

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Statistics Prof. NY Uni. of Business. Worked from 1947 onwards in Japan. Emphasis on statistical process control. Quality = Result of work efforts / Total costs. wikipedia.org/wiki/W._Edwards_Deming William Edwards Deming history & people

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W. Edwards Deming 1900 - 1993 people & history history & people

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W. Edwards Deming 1900 - 1993 It is not necessary to change. Survival is not mandatory. In God we trust; all others must bring data. people & history history & people

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W. Edwards Deming 1900 - 1993 people & history history & people doing his best It is not enough to do your best; you must know what to do, and then do your best.

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Joseph Moses Juran Thought leader on Cost of Poor Quality. Applied the Pareto Principle to quality issues. Cultural resistance = Root of quality issues. wikipedia.org/wiki/Joseph_M._Juran history & people

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Joseph M. Juran 1904 - 2008 history & people

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Joseph M. Juran 1904 - 2008 Goal setting has traditionally been based on past performance. This practice has tended to perpetuate the sins of the past. We cannot solve our problems with the same thinking we used when we created them. - Albert Einstein history & people

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Taiichi Ohno 大野耐 The father of the Toyota Production System Devised the seven Muda 無駄 Just In Time wikipedia.org/wiki/Taiichi_Ohno history & people

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Taiichi Ohno 1912 - 1990 Where there is no Standard there can be no Kaizen. Costs do not exist to be calculated. Costs exist to be reduced. The more inventory a company has, the less likely they will have what they need. history & people

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Eliyahu Moshe Goldratt Israely physicist turned business guru. Theory of Constraints author. .םיצוליאה תרות הגוה wikipedia.org/wiki/Eliyahu_M._Goldratt history & people

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Eliyahu M. Goldratt 1947 - 2011 history & people

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Eliyahu M. Goldratt 1947 - 2011 An hour saved at a non-bottleneck is a mirage. history & people

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Theory of Constraints wikipedia.org/wiki/Theory_of_Constraints

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ToC Measures T of Constraints ○ Throughput ○ Inventory ○ Operating Cost Until the product is bought - nothing was sold.

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Traditional Inventory = ↑ Profit ○ overproduction ○ busy = efficient Operational Cost #1 ○ Sub-system optimization ○ Cost center disease ToC Measures T of Constraints Theory of Constraints Inventory = ↓ Profit ○ sell inventory ○ extra work discouraged Throughput #1 ○ Systemic optimization ○ Continuous Improvement

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ToC order of Measures T of Constraints 1. ↑ Throughput 2. ↓ Inventory 3. ↓ Operating Cost

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ToC Steps T of Constraints 1. Identify the constraints 2. Exploit the constraint 3. Subordinate and sync to the constraint 4. Elevate performance of the constraint 5. Repeat

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ToC - What is a Constraint? T of Constraints Constraint = Capacity cannot meet demand

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meet Herbie

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Identify the Constraint(s) T of Constraints signs: ○ people queue ○ inventory buildup ○ units to be processed ○ work in progress / backlog

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Exploit the Constraint T of Constraints Maximize its utilization toward productive throughput - Don't allow it to be idle. time lost at the constraint is lost forever; it can never be made up H

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Subordinate and Sync to the Constraint T of Constraints Drum - production rate of the constraint sets rate for the system, both upstream & downstream. Buffer - Placed in front of the drum (upstream) to keep constraint busy, have no throughput disruption. Rope - Actions taken to tie the rate at which material is released into the system to production rate of the drum. H

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Subordinate and Sync to the Constraint T of Constraints Drum - Buffer - Rope Drum Buffer Rope

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Elevate performance of the Constraint T of Constraints H

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ToC Pitfalls Perfectly Balanced Line ● Elevating 'all' constraints by elimination ● Multiple constraints = Loss of control ● Floating Bottlenecks = Unpredictable & Unmanageable

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Lean Toyota Production System wikipedia.org/wiki/Toyota_Production_System

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Lean Foundation Jidoka Autonomation Built-in quality Stop at abnormalities Just in Time Single piece flow Pull production Takt time production People People People People Heijunka

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Autonomation 1. Detect the abnormality. 2. Stop. 3. Fix or correct the immediate condition. 4. Investigate the root cause and install a countermeasure. Jidoka 自働化 Lean TPS

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Mistake proofing avoid (yokeru) mistakes (poka) Poka-yoke ポカヨケ Lean TPS

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Just in Time Lean TPS Provide customer what he needs, at the right time and in the right quantity. ○ Single piece flow ○ Pull production ○ Takt time

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Kanban 看板 Lean TPS kanban = card Used by downstream processes to signal upstream.

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Heijunka 平準化 Lean TPS Smooth processing and production. ○ Leveling ○ Sequencing ○ Stability and standardization

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The Deming Cycle wikipedia.org/wiki/PDCA originates from Francis Bacon (Novum Organum, 1620) aka. Scientific Method Plan Do Check Act change control

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Muda 無駄 the seven wastes Lean TPS ○ Transportation ○ Inventory ○ Motion ○ Waiting ○ Over-processing ○ Over-production ○ Defects

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Before it moves, hold it, Before it goes wrong, mend it, Drain off water in winter before it freezes, Before weeds grow, sow them to the breezes, Can foresee Harmful events and not allow them to be. - Chapter 64 of the 道德經 Tao Teh Ching by Lao Tzu, 600 BC wayist.org/ttc compared/

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Prevention - the 5Ss ○ Sort ○ Straighten ○ Scrub ○ Systemize ○ Standardize Lean TPS shadow box

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Kaizen 改善 Lean TPS Good Change / Improvement / Change for the better ○ Eliminate "hard" work - Muri 無理 ○ Perform experiments (PDCA) ○ Participation of people in the improvement

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Genchi Genbutsu 現地現物 Go and see. Go to the Gemba 現場, the real place. Go to where the work gets done. Lean TPS

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Lean IT Operations wikipedia.org/wiki/Lean_software_development

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Principles ○ Eliminate waste ○ Amplify learning ○ Decide as late as possible ○ Deliver as fast as possible ○ Empower the team ○ Build integrity in ○ See the whole Lean IT

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"Think big, act small, fail fast; learn rapidly" Lean IT

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Agile History 1970 Tom Gilb publishing Evolutionary Project Management (EVO) 1974 E.A.Edmonds paper introduces Adaptive Software Development process 1990s Agile methods vs. heavyweight project management methods 2001 Manifesto for Agile Software Development 2005 Declaration of Interdependence by Alistair Cockburn and Jim Highsmith Lean IT

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Devops History 1993 Mark Bugess creates CFEngine and presents in a paper at the CERN computing conference 2005 Puppet Labs founded by Luke Kanies 2008 first Velocity conference by O'Reilly focusing on web performance and operations 2008 Jesse Robbins & Adam Jacob found OpsCode 2009 Patrick Debois talks about DevOps and organizes the first DevOpsDays in Belgium Lean IT

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Recommended books/video/audio ○ The Goal bit.ly/the-goal ○ The Phoenix Project bit.ly/the-phoenix-project ○ Office Space bit.ly/office-space-movie ○ NUMMI Final Days bit.ly/nummi-final-days