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Delivered at Agile Africa 2013 - edited for online viewing. Abstract: The phrase "optimise globally, not locally" is used often. So is the phrase "sleeping like a baby". As with the second phrase, the first one isn't appreciated fully. "Sleeping like a baby" means to wake up screaming every hour requiring a nappy change. Coincidentally, a local optimisation in spite of the global need has exactly the same effect.
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@danierouxThroughput AccountingAgile Africa 2013
Tuesday 17 September 13
THIS PRESENTATION WAS EDITED TO BE MORE “ONLINE FRIENDLY”.
i.e. it has many, many more words on many more slides.
Tuesday 17 September 13
MISSION: MAKE THE BEST COFFEE I CAN AT HOME
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FIRST: EQUIPMENT
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CAN I MAKE COFFEE?
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NO
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AWESOME MACHINE AND BEANS YIELDS ...
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WHICH IS NOT ...
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OPTIMISED FOR THE WRONG THING!
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OPTIMISED FOR THE BEST MACHINE
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WHICH DOES NOT AFFECT THE OUTPUT
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WHAT MATTERS IS WHAT YOU START WITH
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WHAT MATTERS IS WHAT FLOWS THROUGH
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WHAT MATTERS IS THE GLOBAL OPTIMISATION
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THE COFFEE GRINDER MATTERS MORE
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CAN I MAKE COFFEE?
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THE BEST COFFEE I POSSIBLY CAN?
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YES, MAYBE
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AT THE BEST POSSIBLE PRICE?
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NO
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OPTIMISING GLOBALLY GOT US FROM:
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TO
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AND ULTIMATELY TO
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TELL ME HOW YOU MEASURE ME, AND I WILL
TELL YOU HOW I WILL BEHAVE.
Dr Eliyahu Goldratt -The Haystack Syndrome (1990)
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THROUGHPUT ACCOUNTING
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Return on Investment
Net Profit=
Investment
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= Throughput - Operating Expense
Net Profit
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= Revenue - Totally Variable Costs
Throughput
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= Revenue - Totally Variable Costs
Throughput
= Rate the system makes money
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= Revenue - Totally Variable Costs
Throughput
= Rate the system makes money= WTF
Tuesday 17 September 13
= Revenue - Totally Variable Costs
Throughput
= Rate the system makes money= WTF (Working Tested Features)
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ROI = NP / I
NP = T - OE
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ROI =T - OE
I
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WHAT DOES THIS MEAN?
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Increase in Throughput
Decrease in Investment
Decrease in Operating Expenses
In Order, Optimise For
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WHEN NEXT YOU SEE INSIPID COFFEE ...
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ASK: HOW CAN WE OPTIMISE GLOBALLY?
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@danierouxdanie@danieroux.com
The Principles of Product Development Flow: Second Generation Lean Product Development
- Donald G. Reinertsen
The Goal- Eliyahu M. Goldratt
Tuesday 17 September 13
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