Instead of going to the office this morning, I stopped at my favorite park. Making my way to the edge of the pond, I wiped the dew off the bench and sat down. A few birds flying around and they dipped their beaks into the water only to take off again into the clear, blue sky. A loon swam and its head surveying the surroundings. The trees were springtime green and a cool breeze moved their leaves in a shimmering kaleidoscope.
Taking a deep, relaxing breath, and another, I looked out at the calm lake. I had made a good decision to be here. I smiled. The air was morning fresh. I was lucky to be alive. I was grateful to be able to spend time in this beautiful place. I was calm as I left the past and the worries about the future behind.
But, I couldn’t help starting to think about what the CEO wanted. He wants the ability to deliver orders in half the current industry standard lead time. For our customized products, the industry standard lead is about 12 weeks. We know this from the meetings Alice and her quote department have been having with our customer’s procurement agents.
We say we will be on par with all other parameters of an order. Not only do we promise to deliver on time, but the industry standard lead time needs to be in the ball park with other bids. If a parameter is out of line, Alice finds out, and the necessary adjustments are made.
As you can imagine, it’s not normal for procurement agents to be open and honest. Alice has a personality which gets folks to open up, but procurement agents in our industry don’t always reciprocate. As far an I know, the procurement agents are convinced of the value our on-time delivery brings. This encourages them to make sure we didn’t submit quotes which were out of line somehow. If we were out of line, we won’t get the order and they won’t get the benefits.
The things they tell us now are not only if we are in-line with other competitors lead times, but they tell us if our prices are too high. I’m surprised. Some customers even tell us if our prices are too low. And, in some cases, we add or subtract certain features or adjust our warranty period to be in-line with the competitors bids.
Because of our CCPM implementation and the software we use to support it, we almost never have an issue adjusting our standard lead times to be in line with our competitor’s bids. During the planning stage of a project, we can make adjustments to resources and task durations to make the project fit within the promised lead time. If something is way out of order, we share our planning with the customer and explain the reasons for the longer lead time. Adjustments can still be made.
But, the question remains––can we deliver some orders in less than the industry standard lead time? It was time to head to the office and see what I could work out. I took one more deep breath and stood up. I looked around the pond one more time and headed for my car.
Back on the highway the calm of the pond disappeared like a mirage in the desert. Rush hour around here was getting worse and worse it seemed. I moved into the left hand lane behind a white box truck with the logo of the company and its phone number in big, red letters. ‘If you can’t see my mirrors, I can’t see you’ a small sign read. I couldn’t see its mirrors nor could I see past the truck.
Creeping along, the opening to the HOV lane came into view on my left. I had placed my electronic tracker on my windshield a few weeks ago, but I never planned to use the HOV lane because I didn’t see the need. The times I went to the office were rarely as busy as things were now. But, since I had stopped at the park, my timing was off.
The HOV exit appeared and I instinctively jerked the wheel to the left and left the white box truck behind. Picking up speed, I was passing cars on my right and had a clear road in front of me. “Suckers,” I thought to myself. After a few minutes, my exit came into view. I wasn’t going to be that late after all.
On my way to get some coffee, I stepped into Jim’s office. Jim and Alice were sitting at the side table. Jim had his laptop open and was concentrating on something on the screen.
Alice looked up and said, “We’re putting the finishing touches on a “project” for the quotation process.” She raised her hands and used two fingers on each hand to quote the word project.
Jim looked up and said, “That’s right. There are five, main tasks, we added three more resources, and entered the first quote project into our main portfolio of projects.”
I said, “Good job! Will you be using this project to base the actual quote “projects” on?” I raised my hands and used two fingers on each hand to quote the word project.
Jim said, “Yes, that’s what were are going to work on next. Alice has about 25 quotes in process we need to create “projects” for.” He raised his hands and used two fingers on each hand to quote the word project.
Jim and Alice chuckled. I smiled at our silly use of hand gestures.
I said, “That sounds like a lot of quotes. How many do you usually have in process?”
Alice said, “Usually, about 10-15 at any one time. Whatever sales has been doing lately must be working. I’ve never seen this many quotes around this time of year.”
Sales has not been doing anything different other than letting me take the lead during their sales meetings.
But, I had to work on the quick delivery lane issue and would have to find a way to have the sales folks deliver the reliability offer. And, soon. I haven’t visited that many customers and there were many more to visit and present our offer to.
I said to Alice, “Would you mind if I worked with Jim this morning? I promise to send him over to you as soon as I’m done.”
Alice stood and said, “No problem, I need to go see what’s going on in my department anyway. I’ve got a person out sick and with all the quotes we need to get out I’m afraid to let things get too out of hand. If they aren’t already.”
As Alice left Jim’s office, I closed the door and sat down. Jim was sitting waiting on me. He pushed his laptop aside and said, “What’s up, boss?”
I said, “Our CEO needs to deliver an order in half our current industry standard lead time. He worked out some deal with the Kleinster Corp. and promised them we would deliver the order on time, too.”
Jim’s eye went wide.
I said, “I need your help figuring out how we deliver this reduced lead time order on time. And, I’m going to assume this won’t be the last time he’ll pull this stunt. We need to be ready for the next time, too.”
Jim said, “It was only a matter of time. No pun intended. Everyone wants things faster and faster. That’s nothing new.”
I said, “The first thing I would try is setting the due date of the project to half the current lead time. The software will warn us if it’s not possible. But, if there’s no alert, it means we can hit the due date, but we won’t have a full project buffer to work with.”
He said, “That’s one way to do it. When a project is launched without a full project buffer, the priorities for this project jump to the top of each resource’s task list. In this way, the work kind of skims along the top of the queue of work and moves through the process faster than everything else. But, you’re right, without a full project buffer the risks will be higher.”
I said, “Right. Either way, we can check the critical chain and see what we can do to reduce the total time and get as much buffer back as we can. I’m paranoid remember.”
He said, “But, you’re not hysterical. I know, I know.”
I said, “To open up even more capacity, I have another idea. This morning when I was stuck in rush hour traffic, I took the HOV lane. Clean sailing all the way to the exit. I had plenty of capacity. Like it was reserved for me.”
I laughed.
Jim said, “If we want an HOV lane here, we’ll need to reserve resource capacity. But, which resources? How much capacity do we reserve?”
I said, “Good questions. We can use the Dynamic Drum function to identify which resources have the least protective capacity. How much capacity we need should be in line with what percentage of these less than standard lead time orders we’re going to get.”
Jim said, “That sounds right, but as our product mix changes, the resources we need to keep an eye on may change. And, once Sales gets a whiff of the capability to deliver orders faster than standard lead times, who knows how many of these kinds of orders we’ll get.”
I said, “It feels like we are going around in circles. Someone will have to always be monitoring the load on our resources and monitoring the amount of orders which are promised in less than standard lead times.”
He said, “Monitoring the load on our resources is something I do anyway. Whenever I schedule a project and place it in the Pipeline, I run the report which shows the planned and actual load on all our resources. If there are any overloads, I double check how overloaded the resources are and how long the overload lasts. Most of the time it hasn’t been a big deal. Any delays due to overloads is usually small compared to the buffer available.”
I said, “Ok, good. It’s time to make monitoring resource capacity a formal part of our portfolio review. But, it’s the how much capacity to reserve problem which is not going to be as easy to solve.”
He said, “You can finally give me the resources I’ve been asking for.”
He laughed.
I said nothing.
In the past, adding more resources was the first reaction to try to finish project on time. Trying never worked, it only made things worse. Adding resources to the environmental chaos we lived in before using CCPM created even more multi-tasking. More resources, more multi-tasking. More multi-tasking, longer lead times. Longer lead times, fewer orders delivered when promised. No way were we going to go back to those days again.
But, if the company is getting a premium for the order, adding resource capacity will be a little easier. We’ll have the cash flow to pay for the added support. If a sub-contractor is involved, we’ll have funds to pay their expediting fees.
I said, “How about this, I’ll give you the resources the software says we need to maintain enough protective capacity. I’ll have to get Sales’ agreement to let us know of any potential less than standard lead time orders that may be out there. We’ll have to do our best to ensure we always have enough capacity. Like the HOV lane, it will always be there. Sometimes it won’t be used, but if we need it the capacity will be there.”
Jim said, “And, when it’s not needed, we can still use it to speed up regular orders, right?”
I nodded.
I said, “Opening up our own HOV lane doesn’t sound too difficult after all. We keep an eye on all actual and planned resource loading. And, we continuous watch the level of less than standard lead time orders. This should ensure there is enough protective capacity to deliver on time the less than standard lead time orders.”
Jim said, “With these two things in place, there should only be a few orders which we can’t deliver when a customer wants them. In these cases where we can’t deliver within the request lead time, the customer will have to suck it up.”
I said, “Right,” I laugh, “Those situations should be few and far between. In the meantime, I’ll email you the Kleinster Corp. order and we’ll use it to test out our assumptions.”
I sent Jim back over to Alice’s office. We had plan to get the CEO’s order to the door in half the time and had a way to deliver other future orders. Our CCPM software makes it easy to see the load on our resource pool. In real time. And, the software helps up predict what resource capacity we need for future orders.
We are making better decisions, in time, about which resource investments will make an immediate impact on our bottom line. And, all in all, I had a productive morning. But, when Jacques walked into my office, the look on his face told me that was about to change.