The Goal – Chapter 20 – Bob Donovan Coaches Change, Julie Rogo Waffles

Rogo starts at the plant and then travels to meet with his wife in another tempt to recognize. You’re at Chapter 20 of 40 – 1/2 way done!

Highlight

“Why don’t we go ahead with the easier things right away and see what kind of effect they have while we’re developing the others.”

Small initial success with change sets the scene for future success.

Page by Page

P162 – “If you hadn’t neglected her all these years, you wouldn’t be in this situation,” she says.

This comment from Rogo’s Mother in Law is painful, but accurate.

P163 – “Why don’t we go ahead with the easier things right away and see what kind of effect they have while we’re developing the others.”

Bob Donovan speaks wisdom on change.

P164 – “Build inventory to maintain efficiencies.”

Our problem is our backlog of overdue orders.

P165 – “Nothing else takes priority over this.”

Rogo makes it clear to his team what his priorities are.

P166 – “If you want to talk to Julie, you can do it through her lawyer,” says Ada.

Wow. Julie has escalated quickly.

P167 – “Everyone except me knows what I should do.”

If you’re in this situation – then just do those things until you figure out your plan. Stopping to take a break or flee from the problems is rarely the right move.

P168 – “The longer you stay away, the more we’re going to drift apart from each other and toward a divorce.”

Like the deadline he got from Peach – Rogo might as well state his options.

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The Goal – Chapter 19 – Change

Rogo begins the chapter at home and picks Jonah up from the airport.

Highlight

“Alex, there are two ways that the ideas I’m giving you won’t work. One is if there isn’t any demand for the products your plant makes.”

“I also can’t help you if you’re determined not to change.”

These situations are difficult to fix:

  • No product demand,
  • Culture prevents change.
  • Avoid them.
  • Page by Page

    P149 – “We found out we’ve got some problems at the plant which we might not be able to solve.”

    Double constraints.

    P150 – “But you have to learn how to run your plant by its constraints.”

    “Alex, there are two ways that the ideas I’m giving you won’t work. One is if there isn’t any demand for the products your plant makes.”

    “I also can’t help you if you’re determined not to change.”

    P151 – “Most manufacturing plants do not have bottlenecks. They have enormous excess capacity.” Spoken by Jonah to Alex at airport.

    “To increase the capacity of the plant is to increase the capacity of only the bottlenecks.”

    P152 – “And I suggest that first of all we go into your plant and see for ourselves exactly how you are managing your two bottlenecks.”

    Spoken by Jonah to team – a manufacturer’s products come from the plant floor. Solve problems where they live.

    “The six of us put on the safety glasses and hats and go into the plant.”

    Safety first!

    “I notice Jonah’s eyes measuring the stacks of inventory piled everywhere.”

    Inventory status and hand kept statistical process control graphs are great ways to understand a plant.

    P153 – Jonah says, “So talk to them. They have a stake in this plant. They’re not stupid. But you have to make them understand.”

    NCX-10 is a constraint, but it is being left idle during union lunch breaks.

    P154 – “There are,” says Stacey, “but going outside would increase our cost-per-part.”

    The expression on Jonah’s face says he’s getting a little bored with this stonewalling.

    Jonah asks about external sourcing for heat treat.

    Goldratt’s 9 Layers of Resistance is a great way to tackle objections like Stacey raises around heat treat.

    P155 – “I’ll put my question differently: how many products are you unable to ship because you are missing the parts in that pile?”

    Rogo is asking, “what specific parts constrain revenue?”

    P156 – “One million dollars,” I say with awe. “On one condition!” says Jonah. “That you get these parts in and out of heat-treat and shipped as a finished product before your customers get tired of waiting and go elsewhere!”

    P157 – I ask, “You mean we should put Q.C. in front of the bottlenecks?”

    “Every time a bottleneck finishes a part, you are making it possible to ship a finished product.”

    Thinking through quality control is a common way to free up capacity at a constraint.

    P158 – “The true cost is the cost of an hour of the entire system.”

    P159 – “First, make sure the bottlenecks’ time is not wasted,” he says.

    P160 – I say, “Well, actually, you and the kids were on the right track at dinner.” “We were?” asks Dave. “We need to make the Herbies go faster,” I say.

    Julie is off – listening to violin music in the background like Scoobie Doo.

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    The Goal – Chapter 18

    We start with grandma Rogo and move back to the plant for some inspection and review of lines and products.

    Highlights

    “I don’t know. We’ve never done it that way before.”

    Planning for a new product often identifies an optimal or near – perfect approach. But that is seldom put into place. Rarely does the planning to figure out ‘perfect’ happen. Rarer still is this implemented. Just do that. Even if it isn’t perfect – often that attempt is close enough!

    Page by Page

    P136 – She tells us stories about the Depression and how lucky we are to have food to eat.

    P137 – “This combination of dependency and fluctuations is what we’re up against every day,” I tell them. “I think it explains why we have so many late orders.”

    An operations team that only plans for best case outcomes will often disappoint their customers.

    P138 – “We should be trying to optimize the whole system.” On phone to Jonah.

    “A bottleneck,” Jonah continues, “is any resource whose capacity is equal to or less than the demand placed upon it. And a non-bottleneck is any resource whose capacity is greater than the demand placed on it. Got that?”

    The wisdom here is to focus on the system output, rather than a single step. Know your goal. Know how a current step advances you to the Goal.

    P139 – “What you need to do instead is balance the flow of product through the plant with demand from the market.”

    “No, bottlenecks are not necessarily bad—or good,” says Jonah, “they are simply a reality. What I am suggesting is that where they exist, you must then use them to control the flow through the system and into the market.”

    Constraints and bottlenecks are present – they just exist! Any forced ranking of process speeds will have winners and losers. No need to punish the constraint – because their must be a constraint.

    P140 – “I guess we look at all our resources,” I say, “and compare them against market demand.”

    P141 – “It’s the complete product mix for the entire plant, including what we “sell” to other plants and divisions in the company.”

    For those familiar with The Lean Startup – these are Vanity erp and Oracle metrics.

    P142 – Yesterday, for instance, we found the demand for injection molding machines is about 260 hours a month for all the injection molded parts that they have to process. The available time for those machines is about 280 hours per month, per resource. So that means we still have reserve capacity on those machines.

    But the more we get into this, the more we’re finding that the accuracy of our data is less than perfect.

    “The problem is, we’ve been under the gun so much that a lot of the updating has just fallen by the wayside,” says Stacey.

    There is a Texas saying – You can either do it, or get credit for it.

    All systems struggle with accurate and consistent measurement. Effort can either drive results or reporting, but there is always a trade off.

    P143 – Can’t we come up with some other faster way to isolate the bottleneck—or at least identify the candidates?

    “If we’ve got a Herbie, it’s probably going to have a huge pile of work-in-process sitting in front of it.”

    Bingo! Stop and look around. The Herbie is probably obvious to the team on the floor.

    P144 – “But this is supposed to be one of our most efficient pieces of equipment,” I say.

    … supposed to be…

    Again, we find ourselves at the NCX-10. There is another story within the Goal where the sunk cost fallacy is explored. It is okay to make one bad decision – not okay to make a second one.

    P145 – This one looks more like what you might think of in terms of an industrial Herbie. It’s dirty. It’s hot. It’s ugly. It’s dull. And it’s indispensable.

    [And similar processes live in every plant.]

    P146 – “What’s the problem here—we need bigger furnaces?” I ask. Bob says, “Well . . . yes and no. Most of the time these furnaces are running half empty.”

    Common sense questions are getting candid, but wrong, answers. This topic will come back.

    P147 – “Okay, but if we filled the furnace every time, would we have enough capacity to meet demand?” I ask. Bob laughs. “I don’t know. We’ve never done it that way before.”

    If there is an obvious clear “right way” and no one has ever done it – give it a shot. This is a common occurrence. Do the obvious right thing.

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    The Goal – Chapter 17

    We start at the Rogo home, then move to the plant where a subassembly needed by Smyth requires attention.

    Page by Page

    P124 – “Even I know how to make pancakes.”

    Sharon to Davey – it’s hard not to like good sibling rivalry. This statement also illustrates the importance of training!

    P125 – “Because I’m not going to have my people do two setups for final assembly on account of your lateness.”

    This is poor team behavior based on Goldratt’s definition of team seen in Chapter 15. If multiple setups eases the constraint – do it!

    P126 – “But how do you know these things are really going on out there in the plant?”

    Fluctuations and dependency – covered in Chapter 11 – are apparent everywhere once the concepts have been explained.

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    The Goal – Chapter 16 – Why hate Julie Rogo?

    The most important part of this chapter is that we learn Rogo’s daughter’s name – Sharon. Julie is not a likable character, but as someone who has experienced similar relationship issues it might be that these scenes hit too close to home.

    This is a bridge chapter like 7 and 12.

    Page by Page

    P120 – Al, I can’t handle always being last in line for you.

    [Should he prioritize her as he had the efficiency of the NCX-10 before Jonah’s teachings? /sarcasm]

    P121 – “Is Mommy still mad at me?”

    P122 – “What did you do to her?” yells her mother.

    P123 – “I’m very worried about her.”

    It is reasonable to worry about any adult that flees from a problem and sheds their obligations as a parent. This is why Julie is so unlikable.

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    The Goal – Chapter 15 – Herbie and Teamwork

    Rogo chaperones the scouts and reflects on the lessons he can apply from hiker speeds to his plant. Read 13 and 15 together. Teamwork isn’t an explicit thread in The Goal – but this chapter shows how Goldratt approaches the topic.

    The Goal of the team is to unburden the constraint. If a team doesn’t know the constraint, then finding it is the first task.

    Highlight

    “If we take some of the load off you, you’ll be able to do a better job at the front of the line.”

    This is a team activity. Share the burden of the constraint to speed up the team.

    Page by Page

    P113 – “Inside a plant, when the departments get behind and work-in-process inventory starts building up, people are shifted around, they’re put on overtime, managers start to crack the whip, product moves out the door, and inventories slowly go down again.”

    “I just thought I’d stay back here with you. This way I won’t hold anybody up.”

    Herbie is a compassionate constraint. Most constraints are. Most constraints know that they are the constraint! Rather than let the constraint suffer, it should be embraced and encouraged.

    P114 – “If this were my plant, it would be as if there were a never-ending supply of work—no idle time.”

    Each pace is optimal. Each walker goes along without thinking of the others. There is no sense of a troop or a team. In a plant – there is no sense of a common business.

    Rogo and Goldratt take the concept of team and alignment as a given. But here we see what happens when that is ignored – the troop spreads out on their hike. Each plant operation does its best, but doesn’t accomplish a common goal.

    P115 – “In fact, whoever is moving the slowest in the troop is the one who will govern throughput.”

    P116 – “Up front, you’ve got some kid who wants to set a speed record. and here you are stuck behind Fat Herbie, the slowest kid in the woods.”

    That kid, or teammate, up front doesn’t understand the goal – for everyone to finish.

    P117 – “Herbie, this thing weighs a ton,” I say. “What have you got in here?”

    P118 – “If we take some of the load off you, you’ll be able to do a better job at the front of the line.”

    This is a team activity. Share the burden of the constraint to speed up the team.

    P119 – He says, “You know, Dad, I was really proud of you today.”

    The praise from a son after a scout activity will melt the heart of any father.

    The Wonder Pets is a kids tv show where the theme song is a love story to teamwork.

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    The Goal – Chapter 14 – A Very Boring Dice Game

    Still on his scout troop, Rogo creates a very boring dice game. This was one of Goldratt’s teaching methods. It is dull. Instead of reading the chapter, play the game on your own.

    Highlight

    And the system gets further and further behind schedule.

    In finance, this is somewhat akin to a bond yield. There is an optimal yield (the fastest finish time) if all payments are made on time at the assumed rate of return. But if the debt encounters variation, then there are all kinds of other yields – each less than optimal. The calculated yield is the best – the system must look out for discounts (time extensions).

    Page by Page

    P103 – I mean, obviously, we’d all go out of business if inventory was always increasing, and throughput was always decreasing.

    P104 – Every time I roll the dice, I get a random number that is predictable only within a certain range, specifically numbers one to six on each die.

    P105 – “How many matches do you think we can move through the line each time we go through the cycle?”

    P106 – Anybody who does better than that, who averages more than 3.5 matches, doesn’t have to wash any dishes tonight.

    P107 – If both Andy and Ben had rolled five’s, you’d have five matches to pass.

    P108 – Graphic!

    P109 – Indeed, some of the inventory which had been stuck in the first three bowls had finally moved to Dave.

    P110 – If this had been an actual plant, half of our orders—or more—would have been late.

    P112 – And the system gets further and further behind schedule.

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