WEBINAR: How to Get More Jobs Done Faster
Each webinar covers exactly how to get MORE Jobs Done Faster. We cover how scheduling is traditionally done and then we cover the Velocity Scheduling System approach. During the webinar you learn what to go do TOMORROW! Sign up here: https://www.velocityschedulingsystem.com/webinar/ WARNING: The Velocity Scheduling System Coaching Program is NOT training. This is a go and do program. Only job shops ready to improve due date performance, cut lead-time through thier shop and who seriously want to reduce chaos should sign up. Velocity Scheduling System is based on Goldratt Theory of Constraints Drum Buffer Rope and is for job shops looking for a better way to schedule their shop.
Showing posts with label goldratt. Show all posts
Showing posts with label goldratt. Show all posts
Friday, June 2, 2017
Dr Lisa and Theory of Constraints featured in Wire Forming Technology International
Dr Lisa was featured in the Fall 2011 Wire Forming Technology International magazine with an article titled: Velocity Manufacturing: Stop focusing on efficiency and focus on velocity to reduce lead and queue times, and to increase lead-time predictability, on-time deliveries, quality and cash flow. The article explains how highly custom job shops and machine shops can schedule and change their thinking using Goldratt's Theory of Constraints to get more jobs done faster with the same people and resources. You can check it out here: WFTI Fall 2011 Velocity Manufacturing Article
Manufacturing Expert Dr. Lisa Lang Discusses Theory of Constraints in The Fabricator
FOR IMMEDIATE RELEASE Manufacturing Expert Dr. Lisa Lang Discusses Theory of Constraints in Article Dr. Lisa Lang, inventor of the Velocity Scheduling System, featured in a November 2011 article discussing her expertise in Theory of Constraints Green Valley, AZ – October 10, 2012 – “Dr. Lisa” Lang, President of the Science of Business and inventor of the Velocity Scheduling System is featured in a November 2011 article in The Fabricator and TheFabricator.com, where she was interviewed about Theory of Constraints and Velocity Scheduling System. The article also highlights two of Dr. Lisa’s clients, CMI Industry America and Guntert & Zimmerman. The article, titled “High mix, fast delivery--on time: How high-mix, low-volume fabricators adapt the Theory of Constraints,” was written by Tim Heston. Tim Heston explores how Dr. Lisa helped both clients utilize the Theory of Constraints to keep the chaos of their manufacturing in check, but allow for dealing with emergencies while increasing productivity. Dr. Lisa remarks on the negatives of focusing on efficiency. Below is an excerpt:
TOC goes against traditional manufacturing thinking, in which workers produce more than is needed to reduce the number of setups and maximize the efficiency of all resources. The forecast, after all, says these parts will be needed eventually, so why not produce them now? The problem is, of course, that sales forecasts are notoriously inaccurate, so those parts may never be needed. Also, producing so many unneeded parts floods the floor with work-in-process (WIP), while jobs in queue sit for days or weeks waiting for large batches to work their way through.
Dr. Lisa offers her expertise throughout the article, which explores five main topics: “The Value of Throughput,” “The Importance of Flow,” “Drum-Buffer-Rope for High Mix,” “Full Kit and Accurate Information” and “Enabling Change.” The full article can be found here: http://www.thefabricator.com/article/forceos/high-mix-fast-delivery--on-time “Dr. Lisa” Lang is one of the foremost Theory of Constraints experts in the world and a sought after manufacturing expert having been named the 2012 Manufacturing Trendsetter in the USA Today for her inexpensive and guaranteed Velocity Scheduling System Coaching Program that has dramatically improved performance of well over 100 highly custom job shops and machine shops. She has also appeared in CBS News, The Wall Street Journal, Finance.com, About.com, NY Daily News, CNBC, The Boston Globe, The Miami Herald, and others. She is active in helping reshore manufacturing back to the U.S. and in the NTMA, PMA, and AMT communities having helped member companies to reduce their lead-times and improve due date performance. She worked with Dr. Goldratt who is the father of Theory of Constraints and author of the bestselling book, The Goal. Dr Lisa is the President of the Science of Business specializing in increasing profits of highly custom manufacturers by applying Theory of Constraints, Lean and Six Sigma to operations with Velocity Scheduling System and to engineering/design with Project Velocity System and to marketing with her Mafia Offer Boot Camp. Learn more about Dr. Lisa and job shop scheduling at https://www.velocityschedulingsystem.com/ and check out her 47-minute webinar “How To Get More Jobs Done Faster” at www.velocitySchedulingSystem.com/webinar/. ### Contact: Dr Lisa Lang President, Science of Business Inc DrLisa@ScienceofBusiness.com keywords: Dr Lisa Lang, Dr Lisa, Theory of Constraints, Velocity Scheduling System, high mix low volume, drum buffer rope, job shop scheduling, Goldratt Links: http://prlog.org/11996440 http://bit.ly/WSz4zB http://bit.ly/WSA4UlWednesday, May 31, 2017
Precision Machining Job Shop Scheduling Client Success Story
FOR IMMEDIATE RELEASE Manufacturing and Theory of Constraints Expert Dr. Lisa Lang Shares Client Success Story Tanya DiSalvo, President of Criterion Tool, shares her story of how her precision machine shop used Velocity Scheduling System to achieve record profits. Green Valley, AZ – November 14, 2012 – “Dr. Lisa” Lang, President of the Science of Business and Theory of Constraints expert, is proud to share one of many client success stories. Tanya DiSalvo is the President of Criterion Tool (founded in 1953) and an active member of both NTMA (National Tooling and Machining Association) and PMPA (Precision Metal Products Association). Tanya has utilized Dr. Lisa’s Velocity Scheduling System at her machine shop to improve on-time delivery and reduce lead times. Tanya DiSalvo’s case study and success story (written by Mike Touzeau) can be found at https://www.velocityschedulingsystem.com/site/wp-content/uploads/2012/10/Tanya_Success_Story_v5.pdf Here is an excerpt: “It’s so different from what we’ve seen in the world of manufacturing that it sounded too good to be true. At first as a team we couldn’t get our arms around it, but Dr. Lisa said she was going to give me my money back if it didn’t work, so we were going to do everything she said.” They liked the homework, but several of her 30 employees, including her dad, who was then consulting and observing as he neared retirement, bet some real cash against her that it wasn’t going to work. “I was pretty sure they thought this was just another flavor of the month. Before VSS we were all frustrated,” she remembers, because they were always trying to manage the “slop,” as she calls it—the jobs that got bogged down and often carried into the next month, with select customers always suffering. Once they saw how the system could facilitate movement of jobs, things started clicking. “As we worked through the Velocity Scheduling process, we got more and more in control. We could focus our resources where we needed them the most. We didn’t have to monitor the jobs, the deadlines, the priorities anymore.” “It was all the same people just changing their focus.” To learn specifically what Tanya did to improve her machine shop scheduling, watch a 47 minute webinar on “How to Get More Jobs Done Faster” at https://www.velocityschedulingsystem.com/webinar/ “Dr. Lisa” Lang is one of the foremost Theory of Constraints experts in the world and a sought after manufacturing expert having been named the 2012 Manufacturing Trendsetter in the USA Today for her inexpensive and guaranteed Velocity Scheduling System Coaching Program that has dramatically improved performance of well over 100 highly custom job shops and machine shops. She has also appeared in CBS News, The Wall Street Journal, Finance.com, About.com, Gear Technology, CNBC, MoldMaking Technology, The Fabricator, NTMA’s The Record and many others. She is active in helping the reshoring of manufacturing back to the U.S. and in the NTMA, PMA, and AMT communities having helped member companies to reduce their lead-times and improve due date performance. She worked with Dr. Goldratt who is the father of Theory of Constraints and author of the bestselling book, The Goal. Dr Lisa is the President of the Science of Business specializing in increasing profits of highly custom manufacturers by applying Theory of Constraints, Lean and Six Sigma (TLS) to operations with Velocity Scheduling System and to engineering/design with Project Velocity System and to marketing with her Mafia Offer Boot Camp. ### Contact: Dr Lisa Lang Science of Business, Inc DrLisa@ScienceofBusiness.com keywords: Dr Lisa Lang, Dr Lisa, Theory of Constraints, Velocity Scheduling System, job shop scheduling, machine shop scheduling, Goldratt, reshoring manufacturing, Success Story, Case Study
Sunday, May 28, 2017
30 Job Shops Improve Scheduling
30 Job Shops Improve Scheduling
By Dr Lisa Lang
In 2009 we significantly improved the scheduling and operations of 30 custom job shops and machine shops. These 30 shops improved due date performance (DDP) to at least 97%, reduced lead-time by 50%, all while improving communication and reducing chaos. Isn't it time for YOU to do the same? Here's an email that I was copied on just yesterday. It's from one of my VSS clients to someone he is recommending the course to:Jose, This is the best system for Manufacturing that I have encountered. This is our next step in the cables shop and covers the entire value stream. It is a web based course that you take 2 hours twice a week for a month and the person walks you through your specific implementation and helps you through the problems. We are currently finishing the training and building the new board. Trust me I have seen and implemented many JIT, Lean Six Sigma systems in the past and this is the best. I have copied Dr. Lisa the creator and facilitator of the program. She is top notch. As well I am attaching one of her free reports on how the system compares with other systems. Sincerely, Luis Fernandez Schlumberger Manufacturing Engineer IPC-Cables
It's amazing what can happen when a team of people participate together and acquire a shared vision.
And did I mention that 3 of the companies participating in group 5 were from multi-BILLION dollar conglomerates?
And 4 of the companies in group 5 were Westinghouse vendors because Westinghouse recommended their vendors sign up?
I just laid out my recommendations, the logic and provided a little motivation. They did all the work.
The next group is starting soon and you can sign up at www.VelocitySchedulingSystem.com. The Velocity Scheduling System Coaching Program is based on Goldratt's Theory of Constraints. So if you ever wanted some guidance putting The Goal (and Drum Buffer Rope) into action, now's the time!
https://www.velocityschedulingsystem.com/
Job Shop and Machine Shop Profitability part 2
This is the second in the series of conversations. Brad: “Just what should a highly custom job shop or machine shop company set as a profitability goal? What is reasonable? How high is up?” Dr. Lisa: “I’ll give you Dr Eliyahu Goldratt’s answer and then I give my more direct answer. Dr. Goldratt stated that profitability goal of the business should be a level of return on sales that top management of a company agrees is definitely impossible to attain.” Dr. Lisa: “For example, if everyone agrees that 5% Return of Sales is definitely possible, that is too low of a goal. If everyone feels the same about 6%, 7%, 8%, and 9%, they those levels are also too low of a goal. But if everyone agrees that 10% is not achievable, that then becomes the goal.” Brad: “That would be an interesting exercise for any CEO to do with his or her top management team.” Dr Lisa: “My answer: How high is up is going to be dependent on 1) what percent your Truly Variable Costs (TVCs) are of sales. And 2) how much capacity you can undercover – meaning how much productivity you can gain with the same people and resources.” Dr Lisa: Knowing both of these numbers (better to be approximately right, than precisely wrong), will allow you to arrive at a very feasible goal and yet one that most will agree is not attainable based on previous experience.” Dr Lisa: Using the same example from our last conversation, I’ve added the Return on Sales:
The Goal by Goldratt is on Amazon Top Executives Book Club
By Dr Lisa Lang
This article is copyrighted by Science of Business, Inc. 2013
In an interview with Amazon CEO Jeff Bezo, Jon Fortt for CNBC reported:This summer he (Amazon CEO Jeff Bezo) spent time at Lab126, a Silicon Valley outpost about a mile from Apple headquarters where Amazon engineers hash out hardware designs. And he also hosted three all-day book clubs with Amazon's top executives, capped by nice dinners at the end. Bezos said he used the books as frameworks for sketching out the future of the company.The Goal was originally published in 1984 but is still very relevant today. And, as you likely know, it take place in a machine shop. Many job shops and machine shops use The Goal as their Bible. The only problem is that most have no idea how to apply it to their unique shop. Well, I have good news. If you own or manage a highly custom job shop or machine shop and want to apply what you read in The Goal to YOUR shop, you can do that with expert guidance very inexpensively. Just check out the Velocity Scheduling System (VSS) Coaching Program. VSS is NOT software but a visual manual scheduling system developed specifically for highly custom job shops and machine shops which are typically low volume high mix environments where the constraint can move week to week or even day to day. Who's the expert that would guide you? Well that's Dr Lisa Lang. She is one of the foremost Theory of Constraints experts who has worked with Dr Goldratt and specializes in applying Theory of Constraints to highly custom job shops and machine shops. Check out Velocity Scheduling System here: www.VelocitySchedulingSystem.com When you're there check out the free webinar called "How to Get More Jobs Done Faster". You'll be glad you did!Which books? Bezos was kind enough to share the titles.
Read the entire story here: https://www.linkedin.com/pulse/20130925133311-291225-amazon-ceo-jeff-bezos-had-his-top-execs-read-these-three-books
- The Effective Executive by Peter Drucker
- The Innovator's Solution by Clayton Christensen
- The Goal by Eliyahu Goldratt
Wednesday, November 4, 2009
Theory of Constraints POOGI - Part 49
We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints. {This series was co-written with Brad Stillahn.}
Do-it- yourself 'Viable Vision' continued ...
Brad: "Most businesses find that their fixed costs increase nearly proportionately when sales increase. How is this avoidable?"
Dr Lisa: "Yes, and some gleefully hit a sales goal only to notice that profits have decreased due to having to increase fixed costs to meet the goal."
Dr. Lisa: "By leveraging the resources they have. There needs to be a monitoring system for the performance of operations. By determining the reasons why due-date commitments are threatened, actions can be taken-using lean and six sigma tools-to improve performance, normally without adding resources."
Brad: "Can a small business owner lead this kind of improvement process?"
Dr. Lisa: "Sure. The companies going through the Velocity Scheduling System Coaching Program are doing that now. They are getting to 100% due date performance in about 2 months WITHOUT a consultant camped in their conference room and at a fraction of the price. Next, those companies will participate similarly in an on-line version of the Mafia Offer Boot Camp. The combination of those 2 programs will get those companies on their way to a Viable Vision."
Dr Lisa: "Actually, having the owner and his/her executive team really drive Viable Vision kind of improvement is the only way to go. They just need a proven process and little coaching so they know how to apply the concepts to their situation along the way."
------------------------------------------------------------------------
If you are a business owner that would like to turn your company's sales level into its profit level in four years or less, please contact Brad Stillahn at Brad@ScienceofBusiness.com with an email that says "I'm interested". We recommend our www.MafiaOfferBootCamp.com to develop your Mafia Offer, and our www.VelocitySchedulingSystem.com to achieve 'perfect' operations
Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2009, Dr Lisa, Inc. All rights reserved.
Wednesday, October 28, 2009
Theory of Constraints POOGI - Part 48
We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints. {This series was co-written with Brad Stillahn.}
Do-it- yourself 'Viable Vision'
Brad: "If a business owner wanted to grow the bottom-line of their company at the fastest rate possible, what would he or she have to do?"
Dr. Lisa: "Get operations 'perfect', and increase sales without a proportionate increase in fixed costs."
Brad: "And what kind of improvement is possible, say for a machine shop?"
Dr. Lisa: "We call what is possible 'Viable Vision'. It varies for different types of businesses, but the results that are possible are bigger than most business owners dare imagine. One definition of Viable Vision is to 'turn your sales level into your profit level in four years or less'."
Dr. Lisa: "Another definition is to increase the percent return-on-sales to a level that the owner, at the outset, would definitely agree is unrealistic. For example, a business that has hovered around breakeven can easily have a 20% return-on-sales, but the owner probably thinks this is unbelievable. And it doesn't matter how small or large the company is; it's possible. The amount of TVCs a company has, as a percent of sales, will have an impact on how long it will take. But it is possible."
Brad: "So what you're saying is a business with $2 million in sales could have $2 million profit by the middle of 2013. Or $10 million sales into $10 million profit. Have you forgotten about the recession?"
Dr. Lisa: "The recession just highlights the importance of sales. A business with an offer 'too good to refuse', what I call a 'Mafia Offer', will grow sales in any economic conditions. We have experience with companies that traditionally had a 'hit rate' of less than five percent, increasing that to well over 50%, while reducing their sales cycle time."
Brad: "What do you mean by 'perfect' operations?"
Dr. Lisa: "When we develop a Mafia Offer, there is a need for operations to be very reliable. By 'perfect', I mean it must be a rare occurrence for the company to miss a due-date commitment or whatever the offer promises. A Mafia Offer is backed up with a solid guarantee, in the form of a self-imposed penalty for non-performance of the offer, so if we're late, for example, we might be giving the customer the order for free."
Dr. Lisa: "No matter how unreliable a machine shop might be now, they can become 100% on-time in a very short period of time, like two months."
... to be continued.
Here's to maximizing YOUR profits!
Dr Lisa Lang
P.S. If you have an internal constraint (not 100% on time), check out www.VelocitySchedulingSystem.com (based on Golratt Drum Buffer Rope) Group 5 starts November 23, 2009! (for job shops only)
P.P.S. If you have an external constraint, check our our ON-LINE at www.MafiaOfferBootCamp.com ; GROUP and PRIVATE Mafia Offer Boot Camps at www.MafiaOffers.com
P.P.P.S. If you have a cash constraint ACT NOW! Free cash video, click here --> The Fastest Way to Increase Cash Flow.
(c)Copyright 2009, Dr Lisa, Inc. All rights reserved.
Tuesday, October 13, 2009
Theory of Constraints POOGI - Part 46
We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints. {This series was co-written with Brad Stillahn.}
Do you really think you can do it all yourself?
Dr. Lisa: "Why do many small business owners try to do it all?"
Brad: "Well, we have a lot of reasons. And some good excuses. For some owners, it is affordability. Building a high quality management team is expensive. You have to have enough sales to be able to afford good people."
Dr. Lisa: "Just because you hire a person, doesn't mean he or she will be effective. Making a hiring mistake is very costly."
Brad: "That reminds me of a painful lesson I learned way back in the mid-1990's when my company was smaller. I was complaining to a couple of other business owners about the ineffectiveness of my General Manager. One of them asked me how much I paid the GM. I replied that I paid him $60,000 a year. He told me not to expect the performance of a $120,000 a year GM for half the price."
Dr. Lisa: "Of course, he was right. Too often we fill a key position with a body. Even a small company needs to run sales, operations, and accounting effectively. That requires good processes as well as good people."
Brad: "Let's talk about one of the most devastating reasons a small business owner tries to do it all: ego. I've been there, too. Too often being in charge is about always being right. But it's impossible for any one person to know it all."
Dr. Lisa: "Oh that reminds me of one of my favorite expressions: 'would your rather be right, or rich'?"
...to be continued.
Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2009, Dr Lisa, Inc. All rights reserved.
Wednesday, July 29, 2009
Mafia Offer Theory of Constraints Marketing Theory of Constraints Sales
We have dramatically REDUCED THE PRICE of our ON-LINE Mafia Offer Boot Camp which is based on Goldratt's Theory of Constraints.
You have no excuses! --> Theory of Constraints Marketing
Interested in an in-person boot camp? Check our our GROUP, and PRIVATE Mafia Offer Boot Camps at www.MafiaOffers.com
Wednesday, April 29, 2009
A Process Of On-Going Improvement (POOGI) - Part 39
We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints. {This series was co-written with Brad Stillahn.}
Are you externally constrained? Yes or no?
Your company is externally constrained if your company (usually) has the capacity to sell more than it does.
We call it externally constrained instead of market constrained because there a many other factors external to the company which may constrain its ability to sell. For example, government regulation is often an external constraint. Credit availability would also be an example of an external constraint.
Being externally constrained is not inherently bad. In fact, an amount of “protective capacity” is necessary to be responsive to the market, have competitive lead times, and meet due date commitments.
Conventionally, a company responds to being externally constrained by cutting costs, especially people costs by layoffs. In some instances, especially when the company is short of cash, this may be necessary. However, contrary to popular opinion and practice, such attempts to “balance” capacity to sales demand is not good management because it directly causes a chaotic work environment, leading to long lead times and poor due date performance.
Are you cash constrained? Yes or no?
Your company has a cash constraint if and only if you have enough customer orders but your suppliers will not supply you their products and services unless you pay with cash upfront.
Approached conventionally, a cash-constrained company will usually go bankrupt because in the short term, the timing of the cash outflows is more than the cash inflows, and the cooperation of the suppliers and customers cannot be achieved quickly enough to prevent the company from running out of cash.
While it is rather unusual to be cash-constrained, recent economic events may result in customers unilaterally stretching out payables and/or banks restricting credit, so a cash constraint can suddenly emerge.
...to be continued.
Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2009, Dr Lisa, Inc. All rights reserved.
Saturday, April 18, 2009
Job Shop Scheduling and Machine Shop Scheduling
If you own or run a job shop or machine shop, check out this Special Report on the "9 Challenges to Scheduling Your Job Shop and Why Your Schedule is Dead on Arrival!"
I'm a lot like you. I read The Goal and loved it. I related to it, and thought it was common sense. It was so refreshing to read a business book like that.
I totally got the hike with the boy scouts and having Herbie lead, then off loading Herbie's backpack. The game they played with matches showed the impact of variability and why it is so hard to get things done.
All really good stuff and I read it in one sitting. I wanted the results they had in The Goal - I wanted to be 100% on-time, I wanted less chaos and less work in process, increased throughput and I wanted all this with the same or less overhead.
But then I really didn't know how to apply it to my situation. I didn't have the budget to hire a consultant to help, much less an expensive Theory of Constraints consultant.
So I did what I could, based on what I understood. I identified what I thought was our constraint, and I studied it. I determined what was keeping us from getting more through the constraint. I made a few changes.
And, we got some results. Nothing like what they had in the book mind you, but some results. But that is where I really got stuck.
I knew much more was possible, much bigger and better results. After I had read The Goal, I did some research and found some published success stories. These case studies showed that I should have achieved more.
But I rationalized -- we're different. We are in a different industry, a tougher industry. Maybe it just doesn't work in our type of business. Yeah, that's it - too bad, it just won't work for us.
Now fast forward a few years.
In the mid 90s Theory of Constraints became more available. There were annual conferences, training classes, and many more books on the subject.
I went to school on all of it.
I immersed myself in the theory. I read everything, I asked a ton of questions. And what's interesting is that I still didn't really know where to start. I still didn't know how to get beyond a few modifications around the constraint and I still didn't know how to get the kind of results I had read about.
And this was after I had been to the mountain. I had taken courses and studied at the Goldratt Averaham Institute founded by Eliyahu M Goldratt, the father of Theory of Constraints.
How can common sense be this hard?
I finally got it when I became a consultant and worked with several clients.
By the way, all my clients had read The Goal, and only achieved small results on their own or got no results because they simply did not know where to start and so had not tried.
My first client was a machine shop. And since then I've worked with a number of "metal benders" - custom machine shops making custom parts and job shops. Some of the shops I worked with had 80% of their parts/products repeat and some only had 20% repeat. But they all had terrible due date performance (on orginal dates), high work in process, and lots of chaos.
I needed to figure out how to make a difference in these highly complex environments where the constraint can move week to week depending on the mix of work that came in.
I discovered, in working with these clients, the secret -- the way to implement what we read in The Goal.
I figured out:
- the order to implement. What to do first, then second and so on.
- that the first steps we take need to provide BIG results to get the buy-in and support to continue.
- that the scheduling and priority of the shop needs to be visual.
- that the visual scheduling system facilitates eveyone's involvement and the desperately needed communication throughout the shop.
- how to create an effective scheduling system that does not require massive computing and manpower to run.
- how to accommodate a complex environment where the constraint moves frequently.
- how to implement the Theory of Constraints process of on-going improvement so that we continuously improve.
- and, how to coach managers and supervisors to get it done.
This approach lead to the big results that I had read about in the case studies and in most cases we achieved the results faster.
We also found that our visual scheduling system created faster buy-in and helped the changes to stick.
So my partner, Brad, and I sat down and documented what we did. We documented the process we used, we documented the differences between companies that can cause differences in the solution. We ended up with THE process to quickly implement what we read about in The Goal to get quick, substantial results.
So why am I telling you all this?
Well... this is something of an "open secret"... I have been working on a way for you to have the exact same system that my job shop and machine shop clients use without the burden and expense of an on-site consultant.
And we have now tested it with several clients and we have done 2 Velocity Scheduling System Coaching programs. So the program that starts on April 27th is our 3rd Velocity Scheduling System Coaching Program. We focus on job shop scheduling and machine shop scheduling.
Now is the right time for this. In fact, I would say that now is THE critical time. Implementing the system is particularly important in this economy for 2 main reasons. 1) With the system it will become clear where you can cut people and have the least effect on productivity; and 2) If you have a market constraint then it is paramount that you improve your due date performance and reduce your leadtimes so that you can capture more market share. This will be particularly effective as your competitors cut people, and get worse on due date performance and leadtimes.
This system has PROVEN to dramatically increase your due date performance, reduce your work in process and decrease your manufacturing lead-times without a consultant camped in your conference room. And of course, this will lead to improved cash flow and increase your profits!
Here's an update I got just received (April 15, 2009) from a client that participated in our VSS Coaching Program:
"Just to update you on our company status, I thought you'd be happy to know we
are still 100% on time and raking in some good profits. I've seen a higher frequency of penetration into the red zone, but no late jobs. We just shipped the mother of all jobs today (in excess of 4000 man-hours) on time! Furthermore, the price tag was $750K, of which final throughput MINUS LABOR was nearly $390K! (Don't tell the customer that)"
That's all for now...
Wishing you success,
"Dr Lisa" Lang
P.S. To sign up go to http://www.velocityschedulingsystem.com/ The next session start
on April 27 and will be limited to 10 companies to ensure you get all the
coaching you need!
of Constraints and Drum Buffer Rope principles discussed in The
Goal by Eliyahu M Goldratt, then sign up for our next Velocity Scheduling System
Coaching Program.
Tuesday, March 3, 2009
A Process Of On-Going Improvement (POOGI) - Part 36
We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints. {This series was co-written with Brad Stillahn.}
The good news is that improved R-I-T “Ready-to-be-Implemented Technological Advance” processes are available.
The bad news is that the Western World is implementing these processes slowly, and much slower than some other parts of the world.
Here is a warning from Dr. Goldratt, developer of the Theory of Constraints, in an introduction to his book “The Race” in 1986:
“The Race is about our standard of living and how we can increase it. Today, we are facing a real threat in the Western World that the opposite will happen. The threat is not just to us. If our living standard declines, everyone else on this globe is adversely affected. Both the source and the solution to the problem lie in the same place—manufacturing. Manufacturing has been the major wealth generator of our industrialized world. This ability to generate wealth has mad our standard of living the envy of the rest of the world. If we continue to lose our manufacturing base, and we are losing it rapidly, we and everyone else will certainly live less well.”
Of course, Dr. Goldratt’s warning was also prophetic. The rest of the world has outpaced the Western World since 1986. It is winning the race.
For years, Dr. Goldratt refused to have his books translated into Japanese. He thought and felt that Japan was so far advanced that if it applied the improved processes of the Theory of Constraints, that the trade imbalance would further increase, threatening to destabilize the world economy. Six years ago, when the U.S. and European economies had closed the gap, and Japan had stagnated, he relented. In the first month of its release, “The Goal” sold a half-million copies. Since then, its sales are equal to the sales in the rest of the world.
Japan is adopting TOC at a much faster rate than the Western World. For example, last year Japan announced the requirement that all companies supplying infrastructure projects must use Critical Chain project management, the TOC methodology for managing projects (and delivering them in half the time).
The TOC body of knowledge continues to grow. TOC is very compatible with Lean and Six Sigma. Combined, they lead to even better results than implementing any one. The technology is there, and it is growing at a faster rate than companies are implementing it.
If your company is not implementing TOC, Lean, and Six Sigma—Ready to Implement Technology—then your company is not achieving results that are possible. These results can be achieved in a remarkably short time. These results include 100% due date performance, decreased inventory (freeing up cash), and increased sales.
You have a Technology Gap. What are you going to do about it?
...to be continued.
Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.
Wednesday, January 21, 2009
A Process Of On-Going Improvement (POOGI) - Part 34
We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints. {This series was co-written with Brad Stillahn.}
“Incentives Work, Don’t They?”
Dr. Lisa: “Brad, ever since I’ve known you, you have been interested in the effectiveness of incentives. Tell me why.”
Brad: “It started when I bought my label printing business back in 1991. I wanted to gain the collaboration of my employees. Like many businesses, we had productivity, delivery, and quality issues. Like many owners, I wasn’t at all sure how to manage well enough to get the results I wanted. So, I thought incentives might help motivate employees to do what I didn’t know how to ask them to do. I thought incentives would motivate them to work it through on their own. At the least, I wanted to have employees who wanted what was best for the company. On the other hand, I was very afraid of having unhappy employees.”
Dr. Lisa: “Did it work?”
Brad: “Not so much. Our PDQ (Productivity, Delivery, and Quality incentive) did clarify the company operating goals for our employees. Our incentive plan initially was measured and paid monthly, but that seemed to be too long to affect behavior. When we went to weekly measurement and payouts, we had good weeks that resulted in incentive payments, followed by bad weeks without incentives. Rather than being perceived as a benefit, it seemed that incentives were considered an entitlement. When they weren’t paid, it seemed that some of the employees blamed me.”
Dr. Lisa: “What did you do about that?”
Brad: “The best approach I found was a cumulative year-to-date expectation level compared to year-to-date performance weekly. Any incentive was paid weekly, which was meaningful to employees who told me just to pay them as much as possible every week. I never found that incentives really incented a difference in performance. How we managed the business set up the performance of the company, good or bad. Good employees were good employees whether they were paid an incentive or not.”
Dr. Lisa: “Aubrey Daniels claimed, in his book Bringing Out the Best in People, that most incentive systems are considered by employees as Negative, and based on Future results that are inherently Uncertain. Rather, effective incentives must be Positive, Immediate, and Certain. And they rarely are. At the big companies I’ve work for, the annual bonus seemed very detached from my work.”
Brad: “When I asked him back in 1998, Dr. Eli Goldratt, father of the Theory of Constraints, suggested an annual incentive paid equally to all employees. The pot would be the annual increase in total net profit. Each year the baseline would reset. The reward could be substantial for everyone and anyone that collaborated to achieve the improvement. He referred to a chair manufacturer in Texas as a big success story.”
Dr. Lisa: “Yes, BUT. That doesn’t meet the test for being Immediate and Certain.”
Dr. Lisa: “Eli’s suggested approach has been further developed into what is referred to as the ‘POOGI Bonus’ in a TOC book called Management Dynamics by John Caspari. POOGI stands for Process of Ongoing Improvement. Basically a pot is built up over time and dispensed over time. So that makes it a little more immediate, and if a positive pot is built up, more certain.”
Brad: “When I joined a Vistage (TEC International back then) CEO group in 2003, I immediately put the question of incentives to the other business owners in my group. None had found a really effective plan. I was particularly troubled then because I had just read a book Punished By Rewards that claimed incentives were in fact detrimental. That challenged me because it called into question the very concept of incentives. The author, Alfie Kohn, claimed that the evidence confirmed that people’s interest in what they are doing declines when they are rewarded for doing it. He said Gold Stars, Incentive Plans, A’s, and even praise are ‘Bribes’.”
Dr. Lisa: “How about Open Book Management? That’s been popular.”
Brad: “Yeah, I tried that for a few years, too. My experience is that owners are owners and employees are employees, and education added to incentives still leaves a gap. I call Open Book Management a solution looking for a problem. I was the only one left to dig deep whenever I had a problem meeting payroll. By the way, do you know how difficult it is to transition away from incentive plans? It’s almost as bad as stopping a culture addicted to overtime.”
Dr. Lisa: “So, what do you think, are incentives effective or ineffective?”
Brad: “Ineffective, because finally I found someone that had thought the problem through. Elliott Jacques spent his life researching organizations. He found that the key to determining a person’s performance potential actually is his or her ‘time span of discretion’. That is, how far ahead does someone think? 80% of the population is under a month, and half of those under a week. Only 7% of the population was over a month, and 13% are unemployable, institutionalized, or incarcerated. The correlation between time span and what a person expects as ‘fair felt pay’ was over 90%, and the curve was stable across currencies, cultures, continents, and time.”
Dr. Lisa: “In Requisite Organization, Elliott claims that the basic contract between an employer and employee is for their ‘Best Work’. He further claims that an incentive undermines that. It causes confusion. If instead of the employer expecting and the employee providing Best Work, the employee now is supposed to provide less than best work without an incentive and best work for an incentive.”
Brad: “Jacques did say the exception was some select individuals in sales. The solution was to make them 1099 independent contractors rather than W2 employees.”
Dr. Lisa: “With TOC, we concentrate on measures, not incentives. Policies, Procedures, and Measures drive behavior.”
Brad: “Yes, and I’ve found measures to be much simpler to implement and manage with. Measures are effective and incentives have too many negative side effects. Having a few measures is also consistent with the goal of having secure and satisfied employees. Pay them well, and expect reliable and effective performance. Measures are an immediate feedback mechanism.”
...to be continued.
Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.
Thursday, January 1, 2009
A Process Of On-Going Improvement (POOGI) - Part 31
We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints. {This series was co-written with Brad Stillahn.}
Dr. Goldratt proposed that there are just two categories of things that can go wrong. One he calls unreliability and the other ineffectiveness. These two things account for everything, and have no overlap.
Unreliability is not doing things that need to be done. Ineffectiveness is doing things that did not need to be done, but were nevertheless. Stop and think about it, and you’ll realize that ineffectiveness is the major cause of unreliability.
Unreliability is not meeting promises. It is often currently verbalized and measured as “due date performance”. In TOC, in order to measure the duration of lateness as well as the dollar magnitude, we multiply the days an order is late by dollar value of an order (and sum for all orders) to get total “Sales Dollar Days”. A lower number is better, with the objective of achieving and maintaining zero sales dollar days every day.
Ineffectiveness is doing things too early, or that didn’t need to be done. In physical terms, it is work-in-process, or inventory. In TOC, in order to measure the duration of time inventory has accumulated as well as the dollar magnitude, we multiply the days inventory of a part has existed times the dollar value for each part (and sum for all parts) to get total “Inventory Dollar Days”. Again, a lower number is better, but zero is not attainable, so the objective is to continuously improve.
Many of the current measurements used in organizations have the intent of controlling costs. In previous articles, we’ve proposed Throughput Accounting as the preferred alternative to Cost Accounting.
...to be continued.
Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.
Thursday, August 21, 2008
A Process Of On-Going Improvement (POOGI) - Part 24
We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints.
To describe sales as a process, we must define the steps of the process. Of course, these may vary somewhat between industries and companies, and may be described in more or less detail. One such list of steps for a sales process is:
Often not considered are the capacity of the sales process and the flow of work through the sales process. In the example above, the capacity of the organization is greater than where work is (snapshot 1) except in one place: engineering at 20. Is it the case that in your company you may have one or bottlenecks that slows your responsiveness when trying to win new customers? As in the example above, will such a bottleneck serve to further reduce the rate at which you win new business?
In snapshot 2, we’ve assumed we’ve doubled the capacity of engineering. Now the rate of sales through the sales funnel is limited by the capacity of Production prototype at 35.
No, sales funnel management is not rocket science. But few organizations—including machine shops—are managing their sales process.
To manage your sales funnel, you must (1) define the steps in your sales process, (2) determine the capacity of your organization to perform each step in a time period, and (3) measure how many prospects are in each step a particular point in time.
...to be continued.
Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.
The steps to implement Drum Buffer Rope (DBR) are not that hard to understand or explain. The difficulity lies in applying it to YOUR specific situation. If you don't know how to do that or do it incorreclty, it could lead to the conclusion that -- TOC doesn't work.
We are going to take 5 companies through the process of implementing DBR remotely. We will explain each step and discuss any questions or concerns specific to your situation. This will be a 12 week program with one session per week. Each session is 90 minutes in length. All 5 companies will be on the same call to take advantage of learning from the other companies. During this 12 week program you will learn:
to read the rest, click here
NEXT Group Mafia Offer Boot Camp: September 24, 25, 26 2008 in Denver. More information at http://www.mafiaoffers.com/. There are also PRIVATE and On-line Mafia Offer Boot Camps. The July boot camp SOLD OUT and there is no group boot camp in August. Don't miss September!
Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): September 23, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at http://www.viable-vision.com/. You can register by fax or on-line.
Wednesday, August 13, 2008
A Process Of On-Going Improvement (POOGI) - Part 23
We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints.
Last time, we discussed how having a "Mafia Offer", an offer so good that (1) your customers can’t refuse it and (2) your competition can’t or won’t match it -- had the potential to dramatically increase sales.
A Mafia Offer is another “technology” that is part of the Theory of Constraints (TOC), a holistic business process improvement body of knowledge developed by Dr. Goldratt, author of The Goal.
TOC is especially effective in machine shops. In fact, it is usually possible to develop an excellent Mafia Offer for a machine shop, especially if your competitors have long lead-times and poor due-date performance.
Here’s a test: do you and your competitors’ quote lead-times that you know have a low probability of being met just to get the order? If so, you have an excellent Mafia Offer. Would you like to find out what it is?
The process of implementing the internal changes a Mafia Offer requires is not trivial, but doing so improves sales closing rates from less than 5% to as high as 80%. Typically, additional sales people aren’t required, but sales funnel management is.
Why? Because having a Mafia Offer doesn’t address the following issues with your sales process:
- Prospects aren’t aware of you
- You aren’t aware of enough prospects
- You have difficulty getting in to see your prospect
- You have a long sales cycle
- You have difficulty quoting as many jobs as you would like
- Quote turnaround is too long
- There are peaks and valleys of booking sales.
Sales funnel management begins with realizing that sales is a process. As Dr. Deming said, “If you can’t describe what you are doing as a process, you don’t know what you’re doing”. Many companies abdicate selling activities to individual sales people, and then have understandable difficulty managing and measuring sales performance and effectiveness.
...to be continued.
Here's to maximizing YOUR profits!
Dr Lisa Lang(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.
NEXT Group Mafia Offer Boot Camp: September 24, 25, 26 2008 in Denver. More information at http://www.mafiaoffers.com/. There are also PRIVATE and On-line Mafia Offer Boot Camps. The July boot camp SOLD OUT and there is no group boot camp in August. Don't miss September!
Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): September 23, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at http://www.viable-vision.com/. You can register by fax or on-line.
Wednesday, May 21, 2008
A Process Of On-Going Improvement (POOGI) - Part 13
We are continuing our series based on The Goal by Eliyahu M Goldratt.
The core idea in the Theory of Constraints (TOC) is that every real system, such as a for-profit business, must have at least one constraint. If it were not true, then the system would produce an infinite amount of net profit. Because a constraint is a factor that limits the system from getting more net profit, then a business manager who wants more net profit must manage constraints. The constraints will determine the output of the system whether they are acknowledged and managed or not.
Dr. Goldratt says it this way: “Before we can deal with the improvement of any section of a system, we must first define the system’s global goal; and the measurements that will enable us to judge the impact of any subsystem and any local decision on this global goal”.
It is impossible to disentangle using TOC in operations (DBR) from TOC accounting (known as “Throughput Accounting”). Any attempt to run TOC in operations while using traditional management accounting measures and controls is doomed to failure. TOC is a radically different way to control operations and does not work with conventional cost accounting systems.
As an alternative, TOC and Throughput Accounting introduce three measurements for increasing net profit:
1. increase Throughput (Sales minus truly variable costs such as raw materials),
2. decrease Operating Expenses (that is, fixed costs), or
3. decrease Investment, particularly in inventories.
To make decisions according to TOC, we need to quantify the decision’s impact on these three measurements and then we will be able to determine the change in net profit and return on investment.
...to be continued.
Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.
Sunday, April 27, 2008
Leverage - Theory of Constraints
Tom Foster of ManagementBlog.org interviewed me about Goldratt's Theory of Constraints. Here is the fifth installment:
--- Start interview
TF: If we do a good job of placing our constraint in our highest cost, most scarce resource, what is the next most difficult thing to do?
Dr. Lisa: Leverage it. Leverage is a great word but we are not taught how to do this or what we are taught is simply wrong.
The book The Goal by Eliyahu M Goldratt describes leverage as exploiting the constraint and subordinating everything else based on the point where you have placed the constraint.
Exploit means not wasting any of what you have. Subordinating is often the harder one because it requires the non-constraint silos to fall in line by supporting the exploitation of the constraint. This is difficult because each silo is usually measured and rewarded on its individual results.
---End interview
That completes Tom's interview of me.
Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.
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