[What every MBA should know about The Goal.] [Link to video summary.]

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.