Lucent Technologies: Outside Plant Fiber Optic Cable Business Unit

Background
Lucent Technologies' Outside Plant Fiber Optic Cable Business Unit designs, develops, manufactures and sells Fiber Optic Cables that are used in an outside environment. Lucent's customers are large telecommunications providers around the world. The largest of these customers continually demand new designs to meet their special circumstances. Continually increasing profits depend on being able to meet these customers' needs more quickly than Lucent's major competitors.

At the time of the decision to implement TOC Project Management, Lucent's product realization cycle for Fiber Optic Cable was about the same as its competitors. A major problem was designs based on new materials took a very long time to come to market. And of course, as in many product development organizations, many of the designers were overloaded and multi-tasking on several projects simultaneously.

It was clear that to continue increasing profitability, and reduce the overload on the designers, it was necessary to markedly improve the product development process. This included significantly reducing the product introduction interval.

Implementation Process
Lucent's Learning and Performance Center offers workshops in TOC and advertises them throughout the Lucent R&D community. The Technical Manager of the Outside Plant Cable design and development group, attended a TOC Project Management Workshop and decided that the Critical Chain approach could help solve their problem. He convinced his Director, who contacted Dick Franks of the Goldratt Institute to facilitate the implementation.

Lucent began by running TOC Project Management workshops for all the members of the organization (development, engineering and product management) who would be involved in the change so

1. they would understand
   • why a change was required, and
   • why TOC Project Management seemed an appropriate way to go,

2. they could be involved in identifying
   • potential negative side effects, so the implementation could be modified to avoid them, and
   • obstacles to implementation, so the implementation could be planned in a way to overcome them.

After the people were trained, Dick Franks facilitated two project planning sessions using ProChain (software). Once projects were scheduled, it was possible to track their progress based on buffer reports. Over the next two months the group planned the rest of their projects, the TOC way, and then integrated them into a single plan based on scheduling the Drum. This first training, planning and scheduling phase took three months.

Once the projects were scheduled, weekly buffer updates and buffer tracking meetings were held with the cross-functional organizations, with Dick participating via conference call. The purpose of the meetings was both to track the projects as part of the standard development process, but also to watch the process and make modifications when problems occurred. These meetings are on going. Dick took part weekly for the first six months, then took part twice a month for another eight months.

Challenges
Early on challenges were basically convincing project team members that management really did intend to stay the course using TOC Project Management and didn't want them multi-tasking. One early buffer meeting turned up a buffer problem in a high priority project many months from completion. At first people thought it was a software bug in the buffer reporting. It turned out that in fact, a key person was multi-tasking and so not making progress on this highest priority project.

A serious challenge occurred at the time the Drum was scheduled. A reorganization transferred major pieces of the project to another manager. The Director had visibly led the effort up to that point. The new manager did not. He left the implementation and project tracking in the hands of the supervisors: the OSP Technical Manager and the Product Manager. Lack of high level support is well known to kill many TOC implementations, to the point that most consultants insist on it before agreeing to facilitate an implementation. This high-level management commitment was obvious from the initial TOC planning through the implementation stages. The reorganization made that high level commitment impossible. The OSP Technical Manager and the Product Manager did the seemingly impossible and kept the implementation together until reorganization a year later returned the technical development to the original Director

A major challenge while the Director was not the head of the organization was upper management's pressure to sometimes accept project due date's prior to project planning. The team was not able to produce TOC schedules to meet those dates. When the team couldn't prevail in getting more realistic due dates, they still used the TOC methodology for their planning. They modified their plans for other projects to account for the introduction of a higher priority project and they were occasionally forced into project completion buffers which were clearly too small. The first such project in fact was completed late. However, by continuing to insist on no multi-tasking and that people work on the highest priority tasks, the project was completed as quickly as possible and did not throw the organization into the chaos, which it could have.

Outcome
The goals of the implementation were achieved. The product introduction interval was reduced by 50%, on-time delivery was markedly improved, and the organization's capacity to develop products markedly increased. With no increase in staffing, the number of projects completed the year after implementation was more than three times what it was the year before the implementation, and the scope of the projects was similar both years.

Lucent contact: William J. Baron at wjbaron@lucent.com

This was presented as a case study at TOC World^® 2000 and is available on video (JSP-3).