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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