In This Issue

• "AGI Applies AIRSpeed Methodology to CVN 21 Design"
  
• TOC World^® 2006 Scheduled
  
• Letter to the Editor
  
• Upcoming Open Courses
  
• Strategic Financial Decisions Workshop in Singapore
  
• "How Fast Can a Charity Raise Money?" by Jake Dell
  
• "Dollar Days"
  
• Remembering Charlie Fried
  
  

AGI Applies AIRSpeed Methodology to CVN 21 Design

The following article was released by the Navy Public Affairs Office for publication.

ONBOARD USS HARRY S. TRUMAN (CVN 75). The CVN 21 Program is designing the next class of aircraft carriers for the 21st century. The lead ship of the class, designated CVN 78, will incorporate many new technologies and features which provide more capability for the warfighter, enabling the ship and embarked air wing to operate with 1200 fewer people than today’s aircraft carriers. Designing the next class of aircraft carrier is no small feat and to ensure this design is as efficient and functional as possible, the men and women on USS Harry S. Truman were asked for their input.

CVN 78 will be capable of sustaining a higher Sortie Generation Rate than carriers today based on improved systems of ordnance handling, aircraft handling and aircraft fueling. A new propulsion and electric plant will provide nearly three times the ship’s service electrical generating capacity, which allows the Electromagnetic Aircraft Launching System (EMALS) to replace the steam catapults we use today. These new systems are designed to be operated with fewer watchstanders, and with reduced maintenance in mind. There are plans for many new technologies to increase the efficiency of the ship and to enable Sailors to meet future mission requirements. Automated Information Technology (AIT) along with Radio Frequency Identification Devices (RFID) are being explored as a way to improve asset visibility and accountability while also significantly reducing the man-hours required to inventory stores. Wireless technologies such as hand-held personal digital assistants (PDAs) may also be used to perform aircraft troubleshooting, display maintenance manuals, facilitate communication between the flight deck and maintenance control, update maintenance transactions and collect maintenance data.

Realizing the value of our Sailors’ quality of life, the Navy stresses the importance of continuing education. Some of the improvements envisioned in CVN 78 are increased and dedicated bandwidth for professional training and advanced education including video teleconferencing. CVN 78’s current design replaces the three-tiered bunks with two-tiered bunks arranged in smaller-sized berthing compartments, all with direct access to washroom facilities. Auxiliary systems will be all electric, for ease of operation and maintenance.

Members of the Aviation Maintenance and Support (AM&S) Integrated Product Team, who came aboard Truman in late February, work for NAVAIR’s Aviation/Ship Integration Team, in partnership with NAVSEA’s Program Executive Office Aircraft Carriers (PEO Carriers). The AM&S Team represents the Naval Aviation Enterprise (NAE), which consists of Commander Naval Air Forces, NAVAIR, NAVSUP, and PEO Carriers. One of the team’s charter elements was to develop and refine a prototype design for aviation maintenance and aviation supply support spaces aboard CVN 78 using Enterprise AIRSpeed methodologies. These methodologies include the Theory of Constraints, Lean and Six Sigma across the NAE; from organizational level maintenance to depot level maintenance and from retail to wholesale supply.

The team members are:

• CDR Ken Nation, NAVSUP, Afloat Supply Department of the Future (ASDOF)
• LT Dave Spurlock, NAVAIR, Aviation/Ship Integration Team
• AVCM Pat Hawkins, NAVAIR, Aviation/Ship Integration Team
• SKC Arleen Granada, COMNAVAIRFOR, N4113T Force Supply
• Steve Simpliciano, The Avraham Y. Goldratt Institute (NAVAIR, Enterprise AIRSpeed)
• Kevin Boissonneault, NAVAIR, AIR 4.10 Warfare Analysis Division

Sponsored aboard by the Truman’s Supply Officer (SUPPO), Cmdr. John King, Aircraft Intermediate Maintenance Department Officer (AIMDO), Cmdr. Christopher Kennedy and Carrier Air Wing Maintenance Officer (CAGMO), Lt. Cmdr. John Wood, the team swept through the Air Wing, AIMD, Supply, and Ordnance Departments interviewing personnel; mapping aviation maintenance, supply and ordnance processes; and asking for the Sailor’s ideas on how to do things better. The data collected will be crucial in ensuring that the CVN 78 design will achieve the Key Performance Parameters for Sortie Generation Rate, reduced manpower, and improved Weight and KG (KG refers to the center of gravity for a ship). According to Lt. Dave Spurlock, the CVN 21 Team Lead: “Capt. Frank Nichols, the NAVAIR Program Manager for Aviation/Ship Integration, said he would not approve any design inputs unless first accepted by the Fleet” and “Any initiatives discovered during this visit - that could be proven to decrease cost while sustaining readiness, that were blessed by the Fleet, and approved by the "Air Boss", Vice Admiral Zortmann, Commander Naval Air Forces - could also be retroactively applied to in-service carriers.” For example, the AIMDO and the Combat Systems Officer (CSO), Cmdr. Frank Sherman, have chartered an AIRSpeed Improvement Project to study and design the most efficient shipboard 2M organization. Lt. Jim Belmont (IM4) and Lt. Dan Robinson (IM2) led a combined team from the Combat Systems and AIMD Microminiature Repair centers on this project. Both officers were certified as "Lean Champions" by Lean Pathways during an initial effort sponsored by the Office of Naval Research. CVN 21 AM&S team member Steve Simpliciano mentored both lieutenants in applying AIRSpeed methodologies to this virtual design for optimized CS/AIMD 2M operations. Although the team did not make any changes underway, the design process will be continued once back in port which will hopefully lead to efficiencies and improvements to the onboard 2M Program.

The ultimate objective of Enterprise AIRSpeed is to achieve Cost-Wise Readiness while supporting the warfighter in the war on terrorism. This is best accomplished through continuing improvements using AIRSpeed processes in conjunction with continual Fleet inputs. Initial CVN 21 ideas have been gathered from NAS Oceana and NAS Lemoore and will soon include inputs from NAS North Island and NAS Norfolk. Truman’s highly successful experiences operating in Operation Iraqi Freedom and its dedication to excellence made it an ideal model for design inputs for the CVN 21 Program.

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TOC World^® 2006 will make its return to the exciting Mohegan Sun in Uncasville, Connecticut, March 29-31, 2006, with a Pre-conference session on March 28th.

Why go to TOC World^® 2006? Whether you’re a TOC veteran or relatively new, this conference is the place to hear in-depth case studies from companies using TOC. You will understand what they did, how they achieved their results and most importantly, the lessons they learned in order to help YOU in your strive for success.

There will be numerous breakout sessions that will provide hands-on learning in TOC; evening receptions where the emphasis is on networking and interacting over food and drinks, allowing each participant to learn from the experts and presenters in a relaxed atmosphere; Pre-Conference workshop sessions and more!

Don’t miss out! Pencil in these dates on your calendar now – TOC World^® 2006 – March 28-31, 2006.

We want to hear from you! Let us know what YOU would like to see offered at TOC World^® 2006 – email us at: robbin.seipold@goldatt.com or sylvia.ebbson@goldratt.com.

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Letter to the Editor

January 31, 2005

Steve,

Thanks for the feedback. I have to confirm a substantial improvement in quality of life since the move. I am enjoying the support of the number 1 and 2 guys in the company, have the authority necessary to make things happen, and am finding the workforce hungry and excited about the vision I share. I’m living the advantages of a top-down implementation, and it does have its benefits!

As I mentioned in my last message, we began with a big problem area: A huge work package, approximately 40 day span and 3500 discrete tasks. Half a dozen discrete resource types, with as we found, hidden skills within each type. We had been doing OK on these - until the customer begged us to add one more plane into our already loaded system. Performance tanked, schedules slid, budgets suffered, and the customer was NOT happy.

Focused software training was held for the project manager and the 'business planner' who updates the project information and generates reports. This was accomplished in one hour on Thursday and one hour on Friday before the Monday start. We (the TOC Office) stood by during updates until the process was established and the user stated his comfort and confidence in the process and his use of the software. This effort required one visit the first day and one visit the second day, total time of about one hour. Brief, infrequent discussions with the PM several times per week addressed any questions and served to reinforce the clearly different direction.

Beginning with a skeleton crew, the project was managed by judiciously applying scarce resources where the buffer and resource reports indicated the best leverage. In daily status meetings, it was apparent something was different. From the first few days’ reports, the project was clearly performing much, much better than any previous effort of the same scale. Significant challenges and delays arose late in the project, particularly key skilled resource conflicts with other higher priority projects. These challenges prevented an early delivery; however this one delivered on time with a perfect test flight – high quality, no write ups, and re-set the bar for cost performance by an impressive margin. Happy customer! Skeptics challenged that ‘he got lucky’ and ‘it was a clean airplane’ – but performance on this line has improved substantially since TOC PM began, regardless of manager. Now performance here in the ‘problem area’ is on par or better than the other areas. We’re now implementing TOC PM across the company.

Also, we’re working with a top mid-west university, combining their interest in TOC with our interest in their undergrad interns and graduates. Much more to share, but another time.

Learning a lot more and having fun doing it. Talk to you again soon.

All the best,
Dave
David K. Christ
Director, TOC PM

David K. Christ was a presenter at TOC World^® 2004, and is the author of the Boeing White Paper, available on our website. He recently provided us with this update since taking a position in another organization.

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Upcoming Open Courses

Open courses are held in four countries. Below are the courses scheduled through June. A complete list for 2005 is available at www.goldratt.com/openschedules.htm. For more information on individual classes or to register for programs in North America, please contact us at info@goldratt.com, 1.203.624.9026 or 1.800.394.GOAL. In the Asia Pacific region, please contact us at asia.pacific@goldratt.com.

Supply Chain Management Expert Training Program
April 4-8 (week 1), April 11-15 (week 2), May 9-13 (week 3), May 23-27 (week 4)
Japan

June 13-17 (week 3), July 11-15 (week 4)
New Haven, CT, USA

TOC for Sales & Marketing
April 27-29
Singapore

Introduction to TOC Project Management
May 10-11
New Haven, CT, USA

TOC for Holistic Strategy Development
June 1-3
Singapore

TOC for Supply Chain & Operations
June 15-17
Singapore

Jonah^SM Program
June 20-24 (week 1), July 4-8 (week 2)
Japan

Introduction to TOC for Production & Operations
June 22-23
New Haven, CT, USA

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Strategic Financial Decisions Workshop in Singapore

Strategic Financial Decisions in Constraint Environment workshop will be held June 16-17 in Pan Pacific, Singapore. The workshop leader will be Dr Eric De Smet, Managing Partner, AGI Asia Pacific.

The workshop is for those individuals and organizations that have recognized the need to improve the way they manage their organizations and are ready to shift from the "cost world" to the "throughput world."

This event is presented by Executive Associates Group International, Singapore.

For more information, please download this brochure.

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How Fast Can a Charity Raise Money?
Applying the Theory of Constraints to Fundraising Operations
by Jake Dell

You've heard it countless times.

"A chain is only as strong as its weakest link; a team is only as good as its worst player."

The logic is simple, obvious, and we all agree.

But in practice, this isn't much more than a pithy saying. We don't often apply this wisdom to our everyday lives.

But we should.

At least that's what practitioners of the Theory of Constraints (TOC) would have us do.

The complete article is available in PDF.

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Dollar Days

We recently received inquiries regarding the use of the Dollar Days concepts in projects. What is written below is a summary of the concept:

In Project Management, Dollar Days has two components – Throughput Dollar Days and Investment Dollar Days. The concept of Dollar Days in projects was first developed in 1990 in the creation of the Flush final judge for projects.

The idea behind Flush (referenced by Goldratt at the end of his book Critical Chain) was that there was not a good measurement to judge the impact of changing timing in a project in conjunction with changing dollars in a project. These items have different base units. Net Present Value values the cost of tying money up as a matter of inflation and interest. But we all know that while money is tied up or when projects take longer than planned, opportunity is also lost.

This is where Investment Dollar Days come in. For each day we have each dollar invested, we accumulate an additional Investment Dollar Day (IDD). As we invest more and more each day, we accumulate IDDs for not only the dollars we just spent, but also for the dollars that remain tied up. As we earn money from our project, we begin to reduce the dollars outstanding and slow the rate of accumulating IDD. When all the money is paid back traditionally, we have the most IDD. After all the actual money we spent is paid back (also considering interest and inflation) Throughput begins to accumulate.

We gain Throughput not only for the day we receive the money, but also for each day of opportunity it brings. In other words, after we retard the rate of IDD, we begin to accumulate Throughput Dollar Days to “pay off” our Investment Dollar Days.

When all of the Investment Dollar Days have been paid back, the project Flushes – we really return the investment in both money and opportunity lost. Different project assumptions can generate different flush curves – some with more risk than others. Flush can be used as means of deciding which projects have higher precedence or which options have less risk of flushing.

The assumption underlying the Flush and dollar days concepts is that cash is a constraint. We can use Flush in not for profit environments where Throughput is not generated in monetary terms. We utilize the Investment times days and Throughput times days of the constraint that limits or gates the amount of work we take on.

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Remembering Charlie Fried

It is with great sadness that AGI announces the loss of Charles A. Fried, Executive Vice President of AGI’s parent Corporation and a Partner of the Avraham Y. Goldratt Institute. Charlie passed away at his home in Florida, at the age of 60, after a courageous and heroic battle with diabetes.

Charlie overcame many physical adversities and served as a great example to the rest of us of how positive attitude and the determination to keep going can make a difference in one’s life and those around him. Charlie was a tireless and beloved leader in countless community organizations, and was well-known throughout the country as one of the “super collectors” of Stephen King books and memorabilia. At one time, Charlie owned one of the five most important Stephen King collections in the world.

Charlie began a long-standing relationship with Dr. Eli Goldratt back in the early 1980s when they worked together at Creative Output, Inc. in Milford, CT. This was around the time when Dr. Goldratt first began to write the book The Goal. When Eli founded the Institute, he asked Charlie to come on board as one of the first Partners of the Institute. Charlie remained with the Institute, overseeing AGI’s legal, financial and administrative areas, until his retirement this past December.

Charlie is survived by his devoted wife Denise, their daughter Shari Fox and her husband Aaron, and son Marc Fried and his wife Debra. He also leaves his sister Rose Huttas, brother Brom Fried, and countless friends and co-workers, both current and past, that will cherish his memory. Donations in Charlie’s memory may be made to the American Diabetes Association.

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