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James R. Holt, Ph.D., PE., is an Associate Professor of Engineering Management at Washington State University - Vancouver. He teaches Organizational Behavior, Operations Research, Statistics, Engineering Economics, Simulation, Information Systems, Constraints Management and other special topics. He was a Principal Consultant with Management Advisory Group, Inc. and a Certified Associate of the Avraham Y. Goldratt Institute. Prior to his consulting work, he was Department Head, Engineering and Environmental Management at the Air Force Institute of Technology, Wright-Patterson AFB, Ohio. Dr. Holt retired from the Air Force with 20 years experience in engineering, computer and technology management. He has published several articles on project management, maintenance and artificial intelligence. He holds a BS in Mechanical Engineering (Utah State University), an MS in Facilities Engineering (Air Force Institute of Technology) and a Ph.D. specializing in Industrial Engineering / Business Administration (Texas A&M University).

Every system can be characterized as a chain of interlocking activities or a network of interdependent events. The operation or productivity of such a linkage is limited by its weakest link. The Theory of Constraints provides powerful tools for analyzing such complex networks based not on the individual links but on the linkages. The TOC Thinking Process finds the problem, creates breakthrough solutions, and plans the implementation of the solution. This course examines specific proven solutions developed by TOC and their application in a broad variety of management problems.

The TOC solutions, generated logically, are valid in a large number of real world problems. The proven solutions offer innovative, successful solutions much superior to previous methods. They are simple (implementable) but not simplistic. While EM 526 Constraints Management teaches how to create your own breakthrough solution for your own environment, this course focuses on how to implement previously discovered solutions in your environment.

 Five Focusing Steps: The five focusing steps are one of Eli Goldratt's major contributions to the management of physical processes. They simplify and summarize Operations Research into back of the envelope steps: 1. Identify the constraint, 2. Exploit the constraint, 3. Subordinate all else to the constraint, 4. Elevate the constraint, 5. If the constraint moves, start over at step 1.

 Drum-Buffer-Rope: Drum-Buffer-Rope proves over and over to be the best method to manage physical processes. DBR offers maximum Throughput, shortest flow times, excellent predictability and minimum inventory. DBR focuses management’s attention on what needs to be managed and allows the rest of the system to subordinate itself to the constraint. DBR is a controlled Push-Pull manufacturing flow that greatly reduces managerial stress and simplifies system planning and decision making. Students learn how to apply the Five Focusing Steps of the Theory of Constraints, how to schedule the constraint, how to buffer the constraint and how to control inventory flow. The study of DBR uses a manual and computer simulation programs to teach the elegant simplicity of Constraint Management. Students also learn Buffer Management as the key operational measures. Students gain understanding and are able to apply DBR to ‘A’, ‘I’, ‘T’, and ‘V’ type plants.

 Project Management-Critical Chain (Single Project): Anytime you have a task that requires the cooperative effort of interdependent set of activities and resources coupled with a high level of uncertainty, you have a project. Typically, any task that requires a diagram to describe the precedence and other interrelationships between activities and resources is a project. Projects differ from Job Shop production only in variability, duration and scope. Where production estimates are in minutes and hours, project activity estimates are in days and weeks. There is much more variability in projects and greater chance in any individual activity. In projects, activities are often first-time events, the process is not well known, activity durations are not certain, and there are frequent resource conflicts. Even the stated precedence constraints are often open to judgment. At the same time, the measures of success (quality, time and cost) all conflict with each other. In other words, project management is the most difficult management challenge any manager can face. When the additional factors of statistical fluctuation and human behavior are included, project management become a continual juggling act. It is no wonder most projects are late, over budget and provide less than the desired outcome.

Until recently, little had changed since PERT/CPM techniques developed during the 1950s helped us structure and plan projects. Now, thanks to the Theory of Constraints, we have a new approach. The concept of Critical Chain blends together activities and resources in joint consideration. The statistics of serial and parallel, dependent operations are well understood. The behavior of individuals and organizations is exposed. And, the impact of multiple demands for common resources is considered. Taken together, it is easy to justify any project management failure. It is not the project manager who causes/allows the failure, it is the systemic factors that prevent success.

Now these factors are well known, we can describe the minimal set of management actions that must be in place to succeed in project management. These actions include: Scheduling activity times at median times (eliminating individual buffering), buffering the whole project against variability along the Critical Chain, buffering sub activities from the Critical Chain activities, buffering resources, eliminating milestones, committing capability, communicating time remaining, and Buffer Management. These techniques applied in isolation or incorrectly cannot not achieve the desired result. But, when correctly applied in concert, they can dramatically reduce expected project duration and cost, increase quality, maintain scope and simultaneously improve management oversight.

 Project Management-Critical Chain (Multiple Projects): The Critical Chain Project Management methods applied to single projects also apply to multiple project environments. In addition, it is necessary to combine projects in such a way to avoid common resource conflict. Usually, it is necessary to select a strategic resource for scheduling purposes. And, Buffer Management takes a much more important role.

Multi-project environments are a version of Job Shops with large variability. The grouping of individual design projects, managing a project team, producing large products, directing repetitive service activities, and special order work all fall within the multi-project management model. Students learn how to schedule such complex processes and how to focus management attention. Properly managed variation minimizes schedule changes, eases management decisions and improves predictability.

In both single and multi-project environments, students learn how to create a project structure based on necessity. They learn to rapidly create simplified project plans that include the information necessary for management without being distracted by unnecessary detail. They learn how to challenge project elements such as precedence constraints, resource conflicts, duration times, milestones and cost of resources. They learn how to break systemic conflict that block improvement. As a result, overall multi-project duration times are greatly reduced to ½ or less of the typical (yet nearly unachievable) estimate. And, project scope, quality and costs are not jeopardized – they are probably even enhanced.

 Financial Management:  When money is the constraint, we should focus our attention totally upon it. Our present tools for financial management assume money is just another resource. The Time-Value-of-Money falls woefully short in this respect. The Theory of Constraints focuses ten times the management importance on the constraint as any non-constraint. In addition to the TOC measures of Throughput, Inventory and Operating Expense, financial decisions should be based on ‘Flush’. Flush is related to Opportunity Lost measures. However, it becomes a very simple measure and powerful tools in selecting between viable alternatives where money is the constraint.

 Distribution Management: For the last fifty years, we have optimized our distribution systems based on transportation costs alone. Facility location, warehouse size, transportation methods, inventory levels and even product mix were determined by localized cost measures developed form economic order quantity information. The world has changed. The Theory of Constraints Replenishment Solution is a proven success in retail/distribution models. Students learn how to determine the right way to deliver goods, the appropriate location and level of inventory and appreciate the interaction between system elements. Individual performance measures and cooperative inter-business interaction improves delivery flow time and reduces inventory levels well below any other system.

 Supply Chain Management: A supply chain is a network of cooperating companies or non-cooperating business units that interact to convert some raw material into a finished good for the end customer. Supply Chain Management integrates everything from the raw material supplier to the retailer. The core conflict in the supply chain is between doing what is best for the link versus doing what's best for the chain. The solution shares profits and risk to align all members of the supply chain to the same goal.

 Critical Chain, Eliyhau M. Goldratt, North River Press, ISBN 0-88427-153-6, 1997.

The Goal, Eliyahu M. Goldratt and Jeff Cox, North River Press, ISBN 0-88427-061-0, Second Revised Edition 1992

Necessary But Not Sufficient, by Eliyahu M. Goldratt, Eli Schragenheim and Carol A. Ptak, North River Press, ISBN 0-88427-170-6, 2000

 Project Management in the Fast Lane: Applying the Theory of Constraints, Robert C. Newbold, St. Lucie Press/APICS Series on Constraints Management, ISBN 1-57444-195-7, 1998

Manufacturing at Warp Speed, Eli Schragenheim and H. William Detttmer, St. Lucie Press, ISBN 1-57444-293-7, 2001.

 Its Not Luck, Eliyhau M. Goldratt, North River Press, ISBN 0-88427-115-3, 1994.

The Race, Eli Goldratt and Robert Fox, North River Press, ISBN 0-88427-062-9, 1986.

Critical Chain Project Management, Lawrence P. Leach. Artech House Professional Development Library, ISBN 1-58053-074-5 , 2000.

ERP: Tools, Techniques and Applications for Integrating the Supply Chain, Carol A. Ptak and Eli Schragenheim, St. Lucie Press, ISBN 1-57444-270-8, 2000.

OTHER RELATED TEXTS:

Managing the Design Factory: A Product Developer's Toolkit, Donald G. Reinertsen, ISBN 0-684-83991-1, The Free Press, 1997.

 SOFTWARE

There is no required software for this course. However, students will receive limited distribution draft software for Project Management review to evaluate the impacts of different elements of project management. A student copy of ProChain will be available to run on Microsoft Project (4.0 or better). A student version of Scitor's PS8 software is also available for review.

EM 430 (Undergraduate Students)

20% 1. Perform the Dice Game (10%) and Job Shop Game (10%) as assigned in class and report your findings.

20% 2. Write a short report (2-5 pages) about your discoveries running the Self-Learning Kit (Production Simulators Models 310, 350).

15% 3. Investigate and summarize the planning, execution and final progress of a completed project. This effort may be on a project related to work or at an alternate location were some data are available.

20% 4. Reschedule an existing project using Critical Chain Project Management (single project approach) on a current project or in the planning of a future project. Report on the process, any results, impact, changes in attitude, performance measures (if possible).

20% 5. Create a three project multi-project schedule (actual or artificial) using Critical Chain Project Management. Demonstrate proper scheduling of the Strategic Resource. Create a Status Report of your multi-project schedule at some partially complete stage and include the correct buffer reports.

5% 6. Describe a distribution system an area related to your work environment. Report on the process and how the Replenishment Solution could be implemented to improve performance.

EM 530 (Graduate Students)

10% 1. Perform the Dice Game (5%) and Job Shop Game (5%) as assigned in class and report your findings.

10% 2. Write a short report (2-5 pages) about your DBR discoveries when running the more complex A plant and V plant assigments in a manual simulation (310, 312, 350, 360, 390).

20% 3. Find (research) an article reporting a DBR success or failure and write a short (2-4 pages) report supporting or challenging the article.

10% 4. Investigate and summarize the planning, execution and final progress of a previously completed project. This effort may be on a project related to work or at an alternate location were some data and managers are available.

20% 5. Reschedule an existing project using Critical Chain Project Management (single project approach) on a current project or in the planning of a future project. Report on the process, any results, impact, changes in attitude, performance measures (if possible).

20% 6. Create a three project multi-project schedule (actual or artificial) using Critical Chain Project Management. Demonstrate proper scheduling of the Strategic Resource. Create a Status Report of your multi-project schedule at some partially complete stage and include the correct buffer reports.

10% 7. Describe a distribution system an area related to your work environment. Report on the process and how the Replenishment Solution could be implemented to improve performance.

GRADE ASSIGNMENTS

Range	Grades
95-100+	A
90-94	A-
85-89	B+
80-84	B
75-79	B-
65-74	C
Below 65	F

Content Sequence: The sequence of study is recommended to follow the topics shown in the table below. As such, the Office Hour discussions will generally follow the sequence outlined. However, since all of the course material is available at any time, students may choose to work at their own rate (faster or slower than the planned course sequence) or in a different order.

DO NOT depend upon the Office Hour to teach you all you need to know to understand the course material! The Office Hour is to answer questions and clarify materials the student studies on their own as part of this on-line course. The Office Hour also encourages students to avoid the student syndrome.

Treatment of Sensitive Material: The students of this class come from many companies. While you will be amazed how often different companies suffer from the same types of problems, some companies are reluctant to make public their concerns and breakthrough solutions. In addition, some students may be dealing with sensitive or propietary materials within their company. We have academic freedom within the classroom, we do not mean to embarass any student. And academic freedom does not mean we have a secure environment even with password protection. If you have sensitive material that should not be shared publicly, please do not discuss it in class or other class communications channels.

If you indicate you have sensitive material in your homework submissions, I will not share that information with any other people. Some firms desire a non-disclosure agreement in this cases. Such agreements are easily possible for sensitive work. However, most of the time, a simple "sensitve material" statement is all you need.

Incomplete Policy:Occationally, events beyond the students control prevent the student from completing all the required work for the Major Application Project. This project is represents the meat of the course and demonstrates the student has adequately learned the course material. If a student has completed at least through the FRT (representing more than 50% of the course material) but has not completed the full project by the time grades are do, the student will be awarded an 'I' - Incomplete grade. Students recieving an Incomplete should try to complete their project within the following semester.

Disability: Reasonable accommodations are available for students who have a documented disability. Please notify the course instructor during the first two weeks of class of any accommodations needed for the course. Late notification may cause the requested accommodations to be unavailable. All accommodations must be approved through the Associate Director of Student Services.

Plagerism: Cases of academic dishonesty shall be processed in accordance with the Academic Integrity Policy, as printed in the Student Handbook and the Faculty Manual and as available from the Office of Student Affairs.http://www.studentaffairs.wsu.edu/hb_standards.asp.

Office Hour Session	Suggested Reading	Subject	Additional Discussion Topics
1	The Goal 1-6	Introduction to Constraint Management in Physical Processes (Dice Game)	Development of Drum-Buffer-Rope
2	The Goal 7-10	Dealing with Variability Managing Physical Processes PQ Financial Model	Job Shop Game
3	The Goal 11-14   Necessary But Not Sufficient 10-11	Applying DBR to Different Manufacturing Structures	The A Plant and V Plant Manual Simulations
4	Critical Chain 1-6 Critical Chain PM 3	DBR in the Project World Discovering the Project Management Limitations (Thru-Put Simulator)	Project Management Simulator
5&6	Critical Chain 7-9 Critical Chain PM 4,5	Discovering the Basic Solution (Physics and Statistics of Projects) (Policies, Measurements, Behaviors) Cutting Activity Times, Buffering the Chain (Eliminating the negative effects)	Advanced Manual Simulations (ProChainPlus Software)
7	Critical Chain 10-16 Critical Chain PM 6,7	How to Manage the Solution Buffer Management in Detail (DBR in Projects)	Buffer Reporting/Tracking
8	Critical Chain 17-22 Critical Chain PM 7,8	Managing in Multiple Project (Throughput Operating Strategy)	Establishing the Strategic Resource
9	Critical Chain 23-25 Critical Chain PM 9	Building the Project Structure by Necessity More Financial Models (What to Do When Money is the Constraint-Flush)	Re-sequencing work Selecting Between Viable Alternatives
10	Critical Chain PM 10,11	Multi Project Chains Building CCPM Intuition
11	Necessary But Not Sufficient 12-17	Distribution and Replenishment (Supply Chain Game)	Understanding the Supply Chain I-Cosmetics Case Study from Its Not Luck
12		Determining Inventory Location and Quantity (Manual Line Simulator)	Resolving Conflict
13		Supply Chain Management (Separate Businesses or Non-Cooperating Business Units)	Understanding Relationships between Non-Cooperating Units (Supply Chain Game)
14	Optional Reading (Its Not Luck 6-18)	The Throughput Operating Strategy Revisited (Creating Effective Strategy to leverage the physical constraint)	Connecting Non-Cooperating Units: Sharing the Profits and the Risks

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 URL: http://www.vancouver.wsu.edu/fac/holt/em530/530syl.htm