Comments on _Critical Chain_, ch 14 & 15

Chapter 14

We find out that the professor didn't get tenure and was being let go. He met with the president to try to save his job/tenure. He suggests the idea of him bringing in more MBA students (acting as a sales man). He thinks he can do it cuz he made some progress on advancing the field of project management. She agrees to extend him one more year if he brings in 10 students.

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Chapter 15

ideas:

• in order to maximize throughput of a process that has a series of steps whereby each step in the series is dependent on the previous one finishing, each step must be preceded by a step that has more capacity than it (which means that the last step is designed to be the bottleneck). so capacity goes down as you move from earlier step to later step. 
• the extra capacity at a step needs to be enough such that the next step is 100% fully supplied by its supplying step.
• one major point here is that the bottleneck should be the last step.
• interesting thing: regarding the whole company, the last step is customer demand. that makes sense. customer demand should be the bottleneck.
• this reminds me of some basic business logic I learned a long time ago: don't do marketing when you're not even doing well at converting new customers into lifetime customers. why? I'll explain in two ways. 
• the old way is this: if your company's rate of converting new customers to lifetime customers is low or zero (let's use zero for easy math), then your marketing efforts are being used as a way to get one transaction from each customer. but instead if your rate of converting new customers to lifetime customers is high (let's use 100% for easy math), then your marketing efforts are being used as a way to get an entire lifetime's worth of transactions from a customer. so your marketing money per unit transaction is much lower with the second way. so the idea is to first build up the supply side of your company such that when you do spend marketing dollars, you get the most amount of effectiveness (profit) from it.
• the new way is this: first note that your bottleneck is not customer demand and instead your bottleneck is somewhere in the supply side (for example, something related to customer relations). so if you increase capacity at the demand point of the process, you're making an improvement that has little to no effect on throughput (profit). if you instead fix that bottleneck first, and then fix all the other bottlenecks that pop up after that, probably still on the supply side, then the bottleneck will be customer demand. and only then should you focus on marketing in order to increase capacity at that new bottleneck.
• safety = extra work-in-progress stock waiting before each production step = extra lead time before each project step
• the safety of a step allows for dependent steps to always be ready to start
• the safety of a step is there to protect against delays in the steps before it.