The case AGAINST new Technology – beware at IMTS!

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Technology is Necessary but Not Sufficient
Job-shop-scheduling-technology

Technology typically allows us to do more stuff faster. And generally that can be a good thing. But it does not necessarily lead to:
• more sales;
• reduced operating expenses; or
• reduced inventory.

And these are the things that determine how much money we make.

This is true whether we are talking about new machines, a new ERP system or any other technology. Technology is necessary, but it is not always sufficient to help you make more money. Which is why we have a saying in Theory of Constraints — Technology is necessary but not sufficient. And of course Eliyahu M Goldratt also has a book by the title Necessary But Not Sufficient.

So read on and I will give you 4 questions to ask about any technology purchase your considering.

Technology can bring benefits, if and only if, it diminishes a limitation.

• This does NOT mean that if technology diminishes a limitation it necessarily brings benefits – only that it can or may bring them.
• Even if the limitation is NOT recognized (you aren’t aware of it), the statement holds true.

Long before the availability of a technology, we developed modes of behavior, policies, procedures, measures and rules to help us accommodate whatever limitations we have in our system. Our systems do a nice job of accommodating existing limitations.

So, what benefit will any technology bring if we neglect to change the rules? If we keep doing things the same way only faster – what benefit will there be? And sometimes, many times – the answer is none. If we obey the same rules, we are acting as if the limitation is still there and hence, still being limited.

• How many companies do you know that have implemented technology of some kind and as a result of this technology their profits have increased substantially?
• And, how many do you know that have implemented and have had no results?
• Which is more common?

If you want to make sure that your technology investments payoff, there are 4 questions we can ask to ensure that good technology – once implemented will bring bottom-line benefits?

1. What is the main power of the technology?
2. What limitation does this technology diminish?
3. What rules helped us to accommodate the limitation?
4. What rules should we use now (with this new technology)?

We must answer these 4 questions to fully understand and gain the potential benefit of any technology we are considering.
Let’s look at an example using Velocity Scheduling System as the technology. (Note – that as you read on, I’m being a little extreme in an attempt to add humor.)

1. What is the main power of the technology?  (In this case the Velocity Scheduling System)

• It provides a system to reduce and control WIP which reduces time through the shop.
• It is a visual scheduling and priority system, so that at a glance we can see which jobs are the highest priority jobs and everyone knows what to work on.
• It provides a focus on flow which further reduces time through the shop.
• It teaches you how improve shop communications and the communications between manufacturing and sales.
• It includes a planning component to help us determine the release order of jobs and when we need to add capacity to ensure due date performance now and in the future.
• It includes a continuous improvement component so that our Velocity gets faster and faster and so that we know what 1 improvement project we should be doing.
• It includes key operational and financial metric monitoring (6 metrics total) to ensure that our Throughput is growing faster than our Operating Expenses while maintaining or improving our lead-times and due date performance.

2. What limitation does this technology diminish?

• The need to constantly update and redo our shop schedule and/or change our promised due dates.
• The need to add capacity before we have fully leveraged what we have because we don’t really know what we need.
• The need to call customers and change due dates or beg for forgiveness.
• The need to improve everywhere because we don’t know where to improve to have the biggest bottom-line effect.
• The need to have a ka-zillion key indicators.
• The need limit our profits by what we can get out the door. Or the need to limit the new business we go after because we can’t deliver what we’ve got on-time.
• The need to sound just like our competitors because we don’t really have a competitive advantage.

3. What rules helped us to accommodate the limitation?

• Just keep everyone and/or every machine busy all the time and that will maximize the use of our resources and our efficiencies. And if we are efficient – we’re doing the best we can.
• To increase the likelihood that everyone has something to do, make sure that all orders are available to be worked on.
• When an important customer calls or an important job is in jeopardy of being late – change priorities in the shop. Also run around and create lots of chaos and stress for everyone.
• Whenever we have a little cash – buy new machines. We like new machines. (I have been in a number of shops where if they get a little cash, they buy equipment. I’m not saying YOU do this, but it does happen.)
• Reduce waste (apply Lean) everywhere. Reduce variability (apply Six Sigma) everywhere. And/Or brainstorm a long list of improvement projects.
• Detail schedule. Schedule when every job will be on every piece of equipment, then reschedule and reschedule as you get hit with the reality and complexity of running a custom job shop.
• Measure as much as possible. Track time on every task on every job. Collect tons of bad data. (If we just had more data we could improve our scheduling and get more on-time.)
• Sell more by focusing on the quality of work we do.

4. What rules should we use now (with this new technology)?

• Reduce and control WIP. STOP releasing all the work to the floor to increase the likelihood that everyone has something to do.
• Work that is waiting its turn to be released – get “full kit” for it.
• Use the rules of the Velocity Scheduling System to deal with emergencies, customer changes, etc.
• Measure FLOW, not efficiencies and don’t worry about keeping every one busy.
• Green/Yellow/Red is our one and only priority system. The Velocity Board communicates what to do.
• We do NOT detail schedule (STOP adding detail).
• We focus on finishing what we have started rather than starting more stuff.
• We use buffers to absorb and manage the variability and mix changes that occur in complex job shops.
• We track the major disruptions to flow and use those to direct our continuous improvement so that we know what 1 improvement project we should be doing. STOP brainstorming lists or trying to improve everywhere – the system will tell you where to focus your continuous improvement efforts.
• We only add capacity (buy machines) at the place that is the #1 disruption to flow (or for strategic reasons). If it’s not disrupting flow – you don’t need more or better stuff.
• FOCUS and FLOW are the name of the game – NOT efficiencies and cost.
• Sell more by selling the competitive advantages we’ve created (along with quality).

The Velocity Scheduling System is about changing the rules. It’s about thinking differently regarding how to address those limitations. You don’t need new technology, new machines or to hire people to substantially reduce your lead-times, to substantially increase your due date performance or to substantially reduce your chaos.

Typical VSS clients reduces time through their shop by half, which means they can ship twice and much and make twice as much money — assuming they can sell twice as much. And that’s where the improved due date performance comes in. It’s much easier to gain new business when you can 1) say what you are going to do and 2) do what you said – when you really do have a competitive advantage. It also doesn’t hurt to be able to deliver a little faster than the competition either.

As part of the VSS Coaching Program I walk you through how to move away from the old rules and how to embrace and start using the new rules so that you will get a bottom-line impact. But for most technology you buy – your vendors don’t do that – that’s your job. So being clear on these 4 questions can help ensure you get a bottom-line result.

Remember, if a technology does not diminish a limitation (like a disruption to flow), then you are not likely to get a bottom-line result.   So, I’m not against new technology. Velocity Scheduling System is a type of new technology. I’m against spending money on technology that does not lead to bottom-line results.

Next time I’ll give you another example for a different type of technology, so stay tuned for that.

Sign up for the next Velocity Scheduling System Coaching Program and by the time IMTS rolls around – if you need new equipment or technology – VSS will help you to see where you can get the biggest bang for your buck. And I do recommend attending IMTS even if you don’t need anything because you can become aware of limitations that you did not know you had.

Wishing you success,

Dr Lisa

P.S. If you have something you’re considering buying and you want some help applying these 4 questions, just let me know and I’ll walk you through it.

P.P.S. More info on the Velocity Scheduling System Coaching Program at www.VelocitySchedulingSystem.com and check out the free 47 minute webinar on How To Get More Jobs Done Faster.

copyright Science of Business, Inc.

By Dr Lisa Lang

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{ 4 comments… read them below or add one }

Rodney Daut

Great article Dr. Lisa. I never decided to read Goldratt’s Necessary but not sufficient but after reading your article I will now.

Thank you.

Rodney

Reply

Conrad Leiva

Great article. Thanks

Reply

Steve Murphy

An excllent summary that could easily be used as a “sanity checking” checklist.
Thanyou
Steve

Reply

Torey Heinz

I have read Necessary But Not Sufficient, and a couple other works by Eli where he talks about changing the rules. I have considered these concepts many times, but I really appreciate seeing the VSS specific answers to the four questions.

The hardest part about changing the rules is leading the people who made them, realize they need to change.

I love having people take a step back ask “regardless of the way things are, or have been, how should things really be?”

Torey

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