How to accelerate digitalisation and simplify management at the same time with ToC and Synergetics.
It is inevitable that digitalisation will continue to advance. However, if a company sees digitisation as an opportunity and wants to use it, it quickly reaches two limits. These limits are usually accepted as given and make life unnecessarily difficult.
The first limit is capacity – most of the time, the available capacities are already fully utilised with ongoing projects. How are you supposed to manage the digitisation projects? The second limit is the existing structures and working methods. They are usually still optimised for the existing business and no longer fit the “crazy” agile world of digital. How can you free up capacities and at the same time manage the change without endangering the current business?
Our experience from over 500 projects and consulting assignments shows that most managers and companies make life unnecessarily difficult for themselves when it comes to digitalisation. But there is a way out! In recent years, two approaches have emerged and proven themselves in practice that solve both limits simultaneously and with much less effort than thought:
One is the Theory of Constraints (TOC) bottleneck management. By focusing management on the optimal use of the bottleneck, rapid throughput increases of 50% and more are possible. Secondly, it is the application of self-organisation synergetics to change processes. By consistently designing a few boundary conditions, mechanisms are activated that lead to optimising self-control of the employees without much intervention by management.
Interestingly, neither of these are reinventions of the wheel, but rather refinements of concepts based on proven management approaches such as Lean and Agile.
What is new is the combination and focus on very few effective elements. But this combination and focus make exactly the difference to achieve extraordinary results quickly and without much effort!
Of course, special boundary conditions apply in the automotive sector. These make, for example, the application of bottleneck management not possible “out of the box”. Due to years of optimisation pressure and massively distributed development, finding a bottleneck is practically impossible. Therefore, we use the concept of the virtual bottleneck – instead of a resource, a project phase is used as a bottleneck. This makes it possible to keep the bottleneck stable and enormously simplifies resource management, since only one bottleneck needs to be considered initially. Strategic decisions can thus be made with confidence in the shortest possible time.
With this combination, Mazda was able to reduce the development time of its vehicles by 50% and at the same time increase the project throughput by 50% (more information here).
Especially in the area of digitalisation and the resulting increasing focus on software, agile methods are also increasingly desired and used. However, these methods are confronted with particularly high quality requirements in the automotive sector and the associated regulations, norms, standards and tests. Furthermore, in the automotive sector, software is never self-sufficient, but always connected to electronics and hardware. This in turn has completely different cycles and dependencies. Simply transferring agile methods to the automotive environment is therefore doomed to failure. At this point, we use other concepts from bottleneck management, such as critical chain and buffer management. This enables a seamless dovetailing of agile and classic and at the same time provides clear priorities for everyone.
With this approach, several automotive suppliers were able to increase the throughput of agile and classic teams by 60%-80% and the reliability of deliveries to almost 100% in just a few weeks.
These approaches are fully compatible with many automotive standards and regulations, such as A-Spice® MAN.3 and others. So the desire for agility and reliability can be met at the same time!
In addition, companies in the automotive sector operate with permanently high resource utilisation for reasons of efficiency. Changes according to the classic model usually require many resources and a lot of time. Changes based on self-organisation are the solution here. Typically, only two parameters would have to be changed. As a result, behavioural patterns are activated in the employees (and do not have to be learned) that lead to optimisation. The effects mentioned above were usually achieved with 2-3 workshops and in a few weeks.
The list of companies using these new concepts is growing daily. First and foremost companies like Amazon, Skype, Mazda, BOSCH, Festo, Endress+Hauser, Otto-Fuchs, to name but a few.
Wolfram Müller himself has been active in over 30 companies. At start-ups, medium-sized companies and corporations with up to 6,500 employees in all industries, especially in the automotive sector, including Otto-Fuchs and BOSCH. But also related companies such as Festo, Endress+Hauser or Megger.
The results are always similar: 25-300% more projects with the same resources as well as shortening of project durations by 25-60%. And all this within a few weeks.
Wolfram Müller
Principal
+49 171 5651821
wolfram.mueller@consileon.de
Dirk Dempewolf is one of the first managers to make agile methods available for the automotive sector. Consileon is one of the “preferred suppliers” when it comes to agile coaching and support at Volkswagen, Porsche and Daimler, among others.
Dirk Dempewolf
Management and Head of Automotive Consulting
+49 172 6304740
automotive@consileon.de
You want to know what Volkswagen, BOSCH, Mazda, Festo, Amazon, Skype or Endress+Hauser are doing differently with little power? We are always available for an expert discussion.
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