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Plant payback period is usually 3 years, marginally 5 years. Uncertainty is major cause of mismanagement in projects. For every step in the project there is a time estimate; the length of time, we estimate, it will

take from the start of that step until completion of that step.

"The difference between the median of the probability distribution and the actual estimate isthe safety we put in."

Many times a step appearing on the chart of the project leader actually represents many tasksdone by many different people."

"Financially, the overruns are much less important than the overdue," "Gantt charts, unlike PERT diagrams, involve decisions," "If we start a path on its late start," I wonder aloud, "then that path doesn't have any time slack.

Which means that any delay on that path will also cause a delay in the project."

"Controlling cost and protecting throughput. Two absolutely necessary conditions. We cannotbe satisfied with one without the other.

It implies that any local improvement automatically translates into an improvement of theorganization--- which is not the case in fact!

"Most of the local improvements do not contribute to the global!" Focusing: We have come to know it as the Pareto principle. Focus on solving twenty percent of

the important problems, and you'll reap eighty percent of the benefits.

Twenty-eighty rule applies only to systems composed of independent variables; it applies onlyto the cost world where each link is managed individually.

Bottleneck, a type of resource that does not have enough capacity to meet the demand. Which means that if we decided to do something in one link, we have to examine the

ramifications on the other links.

A problem is not precisely defined until it can be presented as a conflict between two necessaryconditions."

"This is probably the most daring assumption of TOC. One of its foundations is that wheneverwe witness a conflict, it is a clear indication that someone has made a faulty assumption, a faulty

assumption that can be corrected, and by doing so the conflict removed.

"Tell me how you measure me and I'll tell you how I'll behave." Real-life systems have one, maximum two, constraints. The most important contribution of TOC is the research methods it introduces. that it is likely that an early finish will not be reported. "A delay in one step is passed, in full, to the next step. An advance made in one step is usually

wasted."

"In sequential steps our deviations do not average out. Delays accumulate, while advances donot. This can explain how so much of our safety disappears."

The safety is wasted in the connection between one step and another. "The students' syndrome," Brian says. "First fight for safety time. When you get it, you have

enough time, so why hurry.

"Mufti-tasking is probably the biggest killer of lead time," I say. "And we all suffer from it.

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Three mechanisms to waste that safety. One we called the student syndrome, there is no rushso start at the last minute. The second is multi-tasking. The third involves the dependencies

between steps; these dependencies cause delays to accumulate and advances to be wasted.

A system having two constraints results in only unstable solutions. "It depends on the magnitude of the breakdowns, not less on the frequency of the breakdowns,

and, of course, the amount of the stock you allow or want to build in front of X. "If the first row consumes raw materials," Johnny continues, "and the last row releases finished

goods, the distance between the first and last rows is work-in-process inventory. In this analogy

we can see the inventory visually."

"It's apparent that assembly lines and JIT do not follow the five steps. Not only don't they startwith identifying the bottleneck, they are not even considering the existence of a bottleneck at

all.

"It forces work centers to work at less than their maximum local efficiency. the chains actually symbolize a restriction on the amount of inventory allowed to be

accumulated locally,"

In production we protect a work center with inventory, in projects we protect a step with safetytime."

buffer. Usually a good rule of thumb is to take the current production lead time and cut it inhalf.

"So, in engineering, the desired performance is not quantity but?..." "Finishing the developmenton time."

Without subordination, "we are unable to protect the constraint from losing time due toproblems occurring elsewhere."

most problems that impact the critical path do not occur on the critical path itself. The 'feeding buffer' protects the critical path from delays occurring in the corresponding

noncritical paths.

Highest in importance are steps that reduce the project buffer, One. Persuading the various resources to cut their lead time estimates; Two. Eliminating

milestones or, in other words, eliminating completion due dates for individual steps, and Three.

Frequent reporting of expected completion times."

a vendor can be persuaded to trade lead time for money, and that a vendor does not insist onexact starting times, and definitely not on a delivery date.

resource-buffers don't change the elapsed time of the project "We put feeding buffers only where a noncritical path merges into the critical path. Changing

the critical path will necessitate changing the location of many feeding buffers."

"As a matter of fact, from the point where the two merge until the end of the project, they arethe same. I see. So the only exposure is from step N up to, but not including, the step wherethey merge.

critical path," I say confidently. "The longest chain of dependent steps, the longest in time. "Dependencies between steps can be a result of a path or a result of a common resource. "the longest chain will be composed of sections that are path dependent and sections that are

resource dependent."

constraint is the longest chain of dependent steps.

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that in projects we are not dealing with determinate numbers," Assuming the time estimation of each step contains safety, the project buffer is about one

quarter of the lead time.

the critical chain is longer than the critical path. That's to be expected. CRITICAL CHAIN "removes resource contention within a project. It does not address resource

contention between projects at all." "Payback calculations do not properly take into account the most important factor, the scarcity

of money."

the need to choose arises only when availability of money is a constraint."