Focus and Leverage Part 58

Interference Diagram (ID) for Strategy

In the previous example we showed how to use the ID to exploit a constraint, now let’s look at the second application – strategy development. When using the ID for strategy development you want to focus on a higher level (more global) objective/goal, especially if the input audience is cross-functional. The Objective/Goal has to be at a high enough level to satisfy all parties concerned. If you drive the Objective/Goal too low, some organizations will complain that it does not apply to them. When using the ID for the purpose of strategy develpment, it is best if used in tandem with the Intermediate Objectives (IO) map. The combined thinking power of the ID/IO map is referred to as Simplified Strategy and will enable an effective strategy, and detailed implementation plan, to be developed. In this case, the IO map provides the intrinsic order (equence) of the tactical actions to accomplish the overall strategy.

When the ID is used in a strategy development scenario it is not a constraint you are looking for. Instead, what you want to define is the strategic Objective/Goal that you really want to achieve. When the objective/goal has been defined then, look next for the “interferences” that slow down or stop the progression towards the goal. Usually, there can be several interferences that block the path to success. If there is one thing people are really good at, it’s their ability to express their vocal rational about “why” something won’t work, or why you cannot have something you want. When you present your idea to someone else, or to a group, the common reaction is, “that’s a great idea, but….” As soon as the person says “but” they will interject the reason “why” they think the idea won’t work. “It’s a great idea but, the boss will never approve it.” Or, “That’s a good idea but, it’s not the way we do it here.” Or maybe even, “It’s a good idea but, it will be too expensive to do.” What they are telling you is what they think the interferences/obstacles are that will hinder your ability to succeed. In order to get more of what you want, you must reduce the impact of the interferences/obstacles, or remove them completely. As an example, let’s go through the steps to construct an ID that will be used for strategy development.

Step 1 – ID Strategy – Define the goal/objective

The objective/goal for the strategy application of the ID is focused on strategic direction rather than a constraint and generally answers the questions: “Where do we go from here?” The objective has to be at a level high enough to include the many. However, with that said, it is also important to understand that good strategy development can happen within a specific organization, such as Engineering, Procurement, or Manufacturing. Think in terms of a higher level objective/goal for this scenario when dealing with a single organization, or combining the objectives of many organizations into a single strategy at a higher level. The objective/goal that you pick might seem elusive, but it should also be necessary to get where you want to go. The focused end point of the journey.

The ID tool can work well in a group setting and allow the user to surface obstacles/interferences across many different organizations. Suppose for our example we defined the objective as “Increasing Revenue”.

Step 2 – Define the Obstacles/Interferences

When a group consensus is realized, and the objective has been clearly defined, then you need to look for the obstacles/interferences to characterize “why” you can’t have what you want. Again, when using the ID for strategy development the obstacles/interferences can, and most probably will, cross many organizational functions. There is no minimum or maximum number of obstacles/interferences required. Rather, you should be looking for a list of interferences that is comprehensive enough to surface those entities that are really standing in the way of your success. Suppose, for this example, our cross functional team listed the following obstacles/interferences for achieving the objective/goal of “Increased Revenue.” The obstacles/interference list might look something like this:

Obstacles/Interferences

1. Not enough sales

2. No markets to grow into

3. Customer has low perception of our product

4. Products are priced too high

5. Competitor has higher quality

6. Production takes too long

This list defines the obstacles/interferences that are perceived to currently exist and block successful achievement of the goal. These are the things that stand in the way of being able to achieve “Increased Revenue.” This list can, and probably will, seem a bit overwhelming when you look at it, but don’t lose faith just yet. Let’s do the rest of the steps and see if we can tame the beast.

Step 3 – Define the Intermediate Objectives/Injections

As part of the ongoing group discussion, you’ll want to define the Intermediate Objectives/Injections. In Step 3 what you want to surface are those intermediate objectives (IO) that must exist to make the obstacles/interference go away and not be a problem anymore. Ask the group this question; “What must exist in order for the obstacle/interference not to be a problem anymore?” When you think of the actions required for eliminating or reducing the obstacles/interferences – be BOLD. Describe what you think is really necessary to counter the problem(s) to accomplish the stated objective. Don’t shy away from intermediate objectives/injections just because you think you cannot make them happen. If they are important for the overall objective, then write them down, no matter how far out there they might seem. Here are some possible intermediate objective examples for the obstacles on the list:

Obstacles/Interferences Intermediate Objectives/Injections

1. Not enough sales 1. Increased sales

2. No markets to grow into 2. Explore/find new markets

3. Customer has low perception of our product 3. Customers have high product perception

4. Products are priced too high 4. Products priced competitively

5. Competitor has higher quality 5. Quality higher than competitor’s

6. Production takes too long (lead-time) 6. Lead-time reduced (Increase throughput)

With the intermediate objectives/injections defined you now have the list of the required actions to eliminate the obstacles/interferences and make them go away. It is a foreboding list and at first glance it’s appears almost impossible to achieve any of these actions. Figure 5 provides an example of the basic structure and layout for using the ID for strategy development.

Figure 5. Converting from Discussion to an Interference Diagram(ID).

With this section complete the next step is to layout and constructs the Intermediate Objective (IO) map to govern the implementation plan and determine the tactical actions to accomplish the objective, which we will cover in the next posting.

Bruce Nelson

Focus and Leverage Part 57

In Bruce's last posting he told you that he will expand upon the Interference Diagram and begin the process of linking it with another tool, the Intermediate Objectives map or what we call the ID/IO Simplified Strategy.  Here is Bruce's second installment:

In my last posting, I told you I would expand upon the Interference Diagram and begin the process of linking it with another tool, the Intermediate Objectives map or what I call the Simplified Strategy.

The Interference Diagram (ID)

When the interference diagram was first being developed and drawn on whiteboards, it was done so, not with the intention of replacing or linking any of the current Systems Thinking Tools, but rather to fill the void of a necessity for completing the analyzes in less time. The ID is a thoughtful mind mapping tool that can quickly point a team, or individual, in essentially the right direction to solve a problem and not be required construct a Current Reality Tree (CRT). In essence, the Interference Diagram (ID) was able to answer the question: “What to change.” In this case, the “What to change” became a list of the many entities (Obstacles/Interferences) and not just a single entity (Core Problem).

The first uses of the ID came from Bob Fox2 at the TOC Center, New Haven, CT, circa 1995. Since then, the use and structure of the ID tool has not been well documented, published or transferred to the public at large, but rather used by a limited number of practitioners within the TOC network. The simplicity of the ID and the underlying robust concept to solve problems has been applauded by ID users. The global influence of the ID to solve problems is colossal. Unlike the other thinking tools the ID is not based on logic, but rather on intuition. The arrows in this diagram are just arrows without sufficiency or necessity. The applied thinking is not to develop or isolate a single answer, but rather to list the obstacles/interferences that block the achievement of the desired objective.

It has often been said that the biggest obstacle to solving a problem is to first be able to preciously define the problem. If you are not sure what problem you are trying to solve then, it is awfully difficult to determine the correct solution. In other words, if you don’t know where you are going, then any path you decide to take is sufficient to get you there – you’ll just never know when you get there. The ID structure and concepts are very simple and yet, very powerful in the results provided.

Interference Diagram (ID) Types

There are actually two different ways to apply an ID. The first application is using the ID as a thinking tool to exploit a known constraint. The second application involves using the ID in combination with the Intermediate Objectives (IO) map. The second application offers a fast and highly effective way to develop an overall strategy plan and implementation plan. We will discuss the second application later.

First, let’s consider the exploitation of a constraint within a system. When the system’s constraint is identified, then the exploitation question becomes – “How do I get more from the constraint?” What are the “interferences” that slow down or stop the constraint from doing more and or doing better? It is possible that there could be several interferences that block the enriched performance of the constraint. This list of “interferences” becomes the reasons “why” the constraint cannot do more. The interference list is best compiled from the resources that use the constraints. The constraint users can provide the subject matter expertise to define the interferences and are most familiar with the constraint and how it works, or doesn’t work. When constraint users are asked the question: “What stops (interferes with) you getting more from this operation?” - chances are good that the user resources will be brutally honest with their answers. What becomes important at this stage of information gathering is to filter the “emotional” response from the “logical” responses. You’ll need to determine is if the response is really a system problem, or strictly a personal annoyance or gripe. This analysis will provide better results if the emotional responses are removed up front before placing the statement on the interference list.

The entities on the list simply imply those “interferences” that stop the constraint from doing more - those interferences that “steal” time away from the constraint. In order to get more from the constraint, you must reduce the impact of the interferences, or remove them completely. Any interference that can be reduced or eliminated will free up additional time for the constraint to work more. As an example, let’s go through the building steps to construct an ID that is used to exploit a constraint in a production system. In our example let say that we have identified one particular machine in a production line as the constraint. We will refer to it as “Machine XYZ”. Let’s define the steps to construct.

Step 1 – Define the Goal/Objective

The goal/objective should be something that you really want, but something that doesn’t exist in your current reality. For our example, we will choose as the objective: “More parts from the XYZ machine.” This can be written on a whiteboard or in the center of a piece of paper.

Step 2 – Define the interferences

Step 2 is best accomplished using observation of the system and interviews with the operators. When observing the constraint look for those things that slow down or stop the constraint from working. What are the interferences that take time away from achieving more of the objective? If the identified constraint is truly a system constraint, then keeping it busy all the time and getting more output will be paramount to successfully gaining more system throughput. A possible list of obstacles/interferences might include:

1. Parts not available to work.

2. Operator on break/lunch.

3. Operator has to find his own parts.

4. Operator is looking for the Supervisor.

5. Operator is attending training.

6. Machine is broken.

The list could be extensive and varied. What is most important is to identify are those things that stop the constraint from doing more. Observation of the constraint might reveal others things that impact time at the machine, such as, having to do setups for a different product. All of the observation and interview items combined equal the list of obstacles/interferences that hinder achieving the objective “More parts from the XYZ machine.” There is not a set limit to the number of interferences that need to be gathered. Rather, you should list as many as you think necessary to fully describe “why” the machine stops working.

Step 3 – Quantify the Time Component for ALL interferences

Quantifying the time component associated with the interferences, becomes important to fully understand and appreciate the impact of the interference on the available time. The time component will help filter the important few from the trivial many and help express those items with the greatest impact. Knowing the impact of the time component will also be useful in determining the priority ranking for which interferences to reduce, or eliminate, first. Some of the interferences will be more important than others – they are not all equal. When you accurately quantify the time component for the interference, it also allows for excellent Pareto analysis. Pareto analysis will align the interference, based on time distribution, and determine which interference is most impactful, and the intrinsic order of improvement. Pareto allows the focus necessary to gain the most leverage from the action implemented. However, it is also not realistic to assume that ALL interferences can be reduced and/or eliminated. There will be some interferences that do not offer themselves as candidates for elimination, but rather as entities that can benefit from a reduced time impact. In other words, if an entity with a time impact of 45 minutes can subsequently be reduced to 15 minutes, then the benefit gained for the system is 30 minutes more timefor the constraint. In other cases, the interferences cannot be reduced or eliminated at all. In our example, the time for breaks and lunch cannot be removed. Employees are allowed lunch and break time. However, as an alternative you could gain some machine time by having an alternate person or crew to work the machine during lunch and breaks.

What you are really looking for in Step 3 is to quantify with time, those activities that are stealing time away from your constraint operation. If you can eliminate, reduce, or off-load some of these activities, then more time is available to get more parts through the constraint. If interferences are known, and corrected, then the end result should equate to more output from the machine and more throughput through the system.

Step 4 – Alternatives to the Interferences

The interference list defines all of the obstacles/interferences that stand in the way of having more of what you want. If these interferences/obstacles did not exist, then achieving the goal would be easier. With the interferences defined, you should be able to counter the seemingly negative effect of the obstacles/interferences with an Injection/Intermediate Objective (IO). This action can be accomplished by asking the question: “What must exist so that the interference no longer exists?” Whatever your answer might be is the Injection/Intermediate Objective to overcome the negative impact of the interference. Continue working your way down the list and create an Injection/Intermediate Objective for each Inference/Obstacles listed. The items on Injection/Intermediate Objectives list are the things that must be accomplished to reduce, or eliminate the negative effects of the inferences. If not, then consider revising your Injection/Intermediate Objective list until the answers are sufficient to remove the obstacles/interferences. With the addition of Injections/Intermediate Objectives the list should provide sufficient “ideas” to move you closer to the objective/goal you have established. With the list in place you have now preciously defined “What to change to.”

Obstacles/ Interferences Intermediate Objective/Injections

1. Parts not available to work .                               1. Parts are kitted and ready for use.

2. Operator in on break/lunch.                                2. Train an alternate crew or person.

3. Operator has to find his own parts.                     3. Parts delivered to operator.

4. Operator is looking for the Supervisor.               4. Supervisor notification system.

5. Operator is looking for paperwork.                    5. Paperwork follows job through the system.

6. Machine is broken.                                            6. Preventive maintenance (priority #1).

Figure 1 presents an example of what a completed Interference Diagram might look like for our example. The circle contains the objective and each of the interferences is listed around a circle. The direction of the arrows makes no difference because these arrows are based on the ID user’s intuition and not necessity or sufficiency logic.

Figure 1 – Completed Interference Diagram (ID)

Notice in the figure that the interference times have been added to each interference identified. This allows for a quick visual of the time impact.

When using the Pareto analysis you should base it on available machine time. This will succinctly show the impact of the interferences. If the available machine time for the XYZ machine is considered to be 8 hours, for one shift, then the available time is 480 minutes (60 min X 8 hours = 480 minutes) during an 8 hour period. When you use the 480 minutes as the baseline to measure the impact of the interferences, the results will show the conflict between the time available to work and the time the machine actually spends working. Figure 2 shows an example setup of the Excel input sheet to show the interference description, total minutes the interference consumes, and the percentage impact on the total minutes available. As you can see the leading time impact comes from not having parts available at the machine to work on. Fixing this interference alone could provide an additional 90 minutes of throughput time every day.

Figure 2 The Simple Excel Set-up

 

From this spreadsheet setup you can display two additional charts that help drive the point home for the impact of the interferences. With the interference percentage calculated you can create a pie-chart to visually display the breakout and “Interference Impact.” Figure 3 displays the Interference Impact for our example.

Figure 3. The “Interference Impact.”

Figure 3 shows that only 36% of the total time available is actually used to make parts on this machine. The other 64% of the time is consumed by the interferences. Figure 4 displays the interferences in a Pareto analysis to show the intrinsic (descending) order of improvement. Those interferences listed highest on the list should be reduced or eliminated first, if possible, to gain the most benefit.

Figure 4. Pareto distribution of Inferences

When the ID is used to analyze and exploit a constraint it can be a quick and effective tool to generate good ideas quickly. This method, when used in conjunction with Pareto analysis, can quickly provide the visual tool to determine the impactful interferences and provide the focus and leverage on those few important actions that will provide the highest levels of improvement.

In my next posting I will demonstrate how we can use the Interference Diagram for strategy development.

Focus and Leverage Part 56

Since I couldn't figure out how to insert a link to Bruce Nelson's white paper linking the Interference Diagram (ID) and the Intermediate Objectives Map (IO Map), I've decided to post a bit of it at a time.  The next four posting will be done so until the full paper is presented.  My thanks to Bruce for these postings.
Bob Sproull

Developing a Simplified Improvement Strategy

From Dilemmas to Solutions

By Bruce H. Nelson,

Jonah, Jonah’s Jonah

TOCICO Board Certified

Lean

Introduction

When Eli Goldratt1 first exposed the world to his then radical Systems Thinking Processes he presented them as the logical tools to express, and document, logical thinking in a very structured format. The improvement quest was centered on the ability to answer three questions:

1. What do I change? (What problem are you trying to solve?)

2. What do I change to? (What is the best solution to solve the problem?)

3. How do I cause the change to happen? (Implementing the solution into reality.)

Goldratt developed the five systems thinking tools to accomplish the necessary thinking tasks to succinctly solve a problem. Each of the five thinking tools aids the user with the ability to apply the tool as a singular component, or to use the tools in a sequential combination to strengthen the logical analysis even more. The five systems thinking tools are:

1. Current Reality Tree (CRT)

2. Evaporating Cloud (EC)

3. Future Reality Tree (FRT)

4. Perquisite Tree (PRT)

5. Transition Tree (TT)

Today, these five tools still remain as the foundational cornerstone of the Thinking Processes for the Theory of Constraints (TOC). These thinking tools have, through time, proven their worth to better understand and analyze simple, as well as, complex problems. For any of you who have been through a Systems Thinking Processes course and learned how to use these tools properly and effectively, you understand the “how” and “why” a good analysis can command a rigorous and sometimes sustained effort to accomplish the task. In others words, developing a useful and solid analyses using the Thinking Process tools can take some considerable effort. In some respects the time commitment required to do a good systems analysis has been a downside to using the thinking tools and has, in turn, caused many people to ignore the tools and turn their heads to the real power and usefulness they can provide.

Over the years Global dynamics have evolved to a level of forcefulness that instant gratification is now considered the norm – put your nickel in and get something out NOW! The dynamics of this global phenomenon have pushed us all to chant the mantra of - “Better, Faster, and Cheaper!” Waiting any amount of time for something to happen no longer seems to be an acceptable option - it’s the world we live in. There are situations and problems that are not accompanied by the luxury of the required time to figure them out. This requirement to be “Better, Faster and Cheaper” has not gone unnoticed in the network of the world’s Systems Thinkers.

The Evolution of the Thinking Processes

If an idea is presented to the world, and it’s a good idea, then somebody, somewhere, somehow will improve the idea and expand it to another level. The “improved” idea will overcome some of the prior inertia of the obstacles and issues that seemed to exist. If the idea is really good and accepted by many people, then the evolution of the idea continues. Each new level of improvement removes more of the obstacles from the previous level and each new level is presented as a form of unification of ideas from the previous level(s). This unification notion becomes the idea of doing more with less, or combining for better results. For instance, instead of doing three separate tasks, now you do one task and get better and faster results. In other words, through the steps of unification an idea can now become easier and more usable by more people. Such is the case for the TOC Systems Thinking Processes - a good idea that continues to evolve.

The Apparent Problem

As a person who has taught many Systems Thinking courses I’ve had the opportunity to present the Systems Thinking tools to a wide variety of people. The intellectual levels, the passion, and the job functions have been spread over a variety of individuals and industries. Teaching these courses has also delivered a wide range of results. In some classes there was 100% completion and in other classes results were dismal with a 75-80% failure rate. Failure rate in this case, is defined as those students who did not finish the course, which was usually related to the time commitment required.

In the early days of teaching this course the preferred approach was to provide a level playing field for all students and make it as linear as possible. The desire for doing this was to reduce as much variation as possible in the learning environment. However, even after creating the utopic venue, there were some surprises. In a typical class the students would be divided into teams so that each team had a minimum of two members and, in some cases three or more, if required. Each team was given a two page write-up (case study) about a fictitious company that was having problems. The assumed linear thinking was that everyone who read the paper would discover the same problems and ALL readers would eventually reach the same conclusions for the Undesirable Effects (UDE’s). Such was not the case. In a class with ten (10) students and five (5) teams it was very predictable that these five teams would develop five different core problems when they constructed their Current Reality Tree (CRT). It is a ponderous thought to speculate how it was possible for five different teams; each analyzing the exact same problem, to come up with five different answers? It was also a surprise to discover, that in most cases, each of the five different answers could be plausible! There was also another observation – the confidence level of the students in thinking they had correctly discovered the core problem was absent. It seemed that the constant question from the group was, “Is this the right core problem?” Even when a core problem was stated (defined), the lingering question became. ”Is this REALLY the core problem?”

When you apply a truly scientific method towards problem solving then, a potpourri of answers should not be possible – only one answer should be correct! And yet, at the same time, it appeared as if more than one answer could, in fact, be correct? Why? The answers provided by the students were not the same, and yet they all seemed to be related. It seemed that what was actually being exposed was a listing of the “obstacles” or “interferences” that stopped them from achieving what they wanted! All of the answers (the perceived core problems) presented were all plausible reasons (interferences) to better understand “why” what they wanted more of could not be achieved. This epiphany created a path back to a thinking tool that I had previously used– the Interference Diagram (ID).

In my next posting, I will expand upon the Interference Diagram and begin the process of linking it with another tool, the Intermediate Objectives map or what I call the ID/IO Simplified Strategy.

Bruce Nelson

Focus and Leverage Part 55

In one of my last few blogs, I told you that I had asked Bruce Nelson to write a White Paper on something that Bruce and I have been working on for the past six months or so.  In previous blogs we have written about two TOC based tools that haven't gotten a lot of attention by the TOC community.  Bruce and I both feel that it is time that these two tools, the Interference Diagram (ID) and the Intermediate Objectives Map (IO Map), take more of a center stage.  Each of these tools used by themselves have provided both of us with some pretty amazing results, but when combined together, their true power is unleashed.

Bruce is putting the finishing touches on his white paper and when it's done I'll share it with you probably as an attached PDF file, if I can figure out how to do that.  Once I do share it, we will gladly take questions on this document that Bruce has written.  On a personal note, both Bruce and I will be pretty much tied up for the near future as we will be editing our new book entitled Epiphanized which is scheduled for publication in December or January.  But even more importantly, as I type this blog, I am awaiting a call from my daughter with news on the status of my 5th grandchild.  Sorry everyone, she will definitely be my priority.

Bob Sproull
ras8202@live.com