Background
The Refrigeration Supplier (TRS)** is South Africa’s
leading contractor for the design, installation and commissioning
of refrigerated display cases and cold rooms used in the
supermarket industry. It had traditionally been the preferred
refrigeration supplier to the Pick ‘n Pay Group. Pick
‘n Pay management had decided that as part of their
growth strategy, they would completely overhaul the look
and function of over 140 stores, 14 of which were Hypermarkets.
The Board had approved capex of hundreds of millions of
dollars for the overhaul, the biggest single beneficiary
of which would be the refrigeration suppliers. As a preferred
supplier, with many years in the business, TRS was in the
enviable position of building an order book bigger than
any it had ever had before.
The Problem
Having a big order book is usually the stuff of dreams
– in this instance though, it came with a catch. There
was simply not enough time left before the busy Christmas
period to complete the initial refurbishments. When the
first tranche of 22 stores was awarded to TRS, it appeared
that the only way to meet the demand would be to work huge
amounts of overtime and “compromise” on quality.
This meant that TRS would have to revisit the work at a
later stage, for no additional revenue. It was a case of
firing on all cylinders, but this engine only had six when
the job demanded twelve!
TRS prides itself on never delivering a job late, and this
instance was no exception. However there was a steep price
to pay in staff burnout and later reworks. The MD, David
Hodes, believed that there had to be a better way and wondered
if the National Productivity Institute could provide him
with some clues. Time was not on his side, as the second
tranche of stores was due to start after the Christmas break,
and without any relief for the workers, there was sure to
be mass resignations, as the pace simply could not be sustained.
The Solution
The National Productivity Institute had within it a section
dealing in the Theory of Constraints. A seasoned practitioner
advised TRS to select key members of the team to attend
a Thinking Process Workshop.
Hodes recalls: “I was very impressed with the ability
of the Thinking Process to bring us all to consensus on
what the core problem was: we were tackling the job trying
all the time to keep the three major trades (mechanics,
electricians and shopfitters) utilised “efficiently”.
This was driving the behaviour, comparing the time actually
spent on a given task against the budgeted time. The net
result of that measure was that people were more interested
in making themselves look good than in doing what was necessary
as a team, to bring the project in on time, within budget
and to specification. I expressed my concern, though, that
if the focus was too much on the diagnosis and not on a
cure, it wouldn’t count for much.”
Fortunately for TRS, a Critical Chain**** course had been
developed by the National Productivity Institute and all
members of the TRS team were put through it. Everyone began
to understand the meaning of “finite capacity”
– the ‘chain’ of the project was only
as strong as its weakest link, and this usually related
to having the right number of skills in the right place
at the right time.
A branch manager for TRS noted; “We finally had some
clear visibility into what could and could not be done with
the resources we had available. We were able to allocate
our people far more wisely and broke out of the habit of
reacting to what seemed urgent, instead of focusing on what
we knew to be important. By using buffer management, we
were able to show all stakeholders in the project, including
all the other contractors working on the refurbishment of
the store, where the bottlenecks were, and how we all had
to support each other in order to remove these bottlenecks,
if we were to achieve the goal of delivering the project
in a shorter lead-time. I liken our first time out with
TOC and Critical Chain as being similar to the first time
you manage to ride a bicycle – a bit wobbly, but a
whole lot better and faster than walking!”
Hodes concludes: “ We are now very interested in
pursuing the Critical Chain multi-project solution. We have
seen the benefit of using constraint based management principles
in an isolated environment, but as an organisation we are
really interested in leveraging our resource pool across
all the projects we run concurrently – sometimes as
many as twenty or thirty at a time. We now know that efficient
use of individual resources is not the same thing as the
effective use of critically constrained resources and have
changed our measures to incorporate the ideas of Throughput
Accounting so that it reinforces the behaviours we are calling
for. We see the productivity gain we have achieved as being
the single biggest competitive weapon in our armoury and
the really good thing about it is that whilst achieving
our result, everyone is working less!”
The Results
Critical Chain delivered to TRS Refrigeration:
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