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The Goal (Goldratt E M)

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"Guess what!" she says.

"I give up," I say.

"Mommy called on the phone," Sharon says.

"She did!" I say.

I glance up at my mother. She shakes her head.

"Davey answered the phone," she says. "I didn't talk to her."

I look down at Sharon. "So what did Mommy say?"

"She said she loved Davey and me," says Sharon.

"And she said she would be away for a while," adds Davey. "But that we shouldn't worry about her."

"Did she say when she would be coming back?" I ask.

"I asked her that," says Davey. "But she said she couldn't say right now."

"Did you get a phone number so I can call her back?" I ask him.

He looks down at the floor.

"David! You were supposed to ask her for the number if she called!"

He mumbles, "I did, but... she didn't want to give it to me."

"Oh," I say.

"Sorry, Dad."

"It's okay, Dave. Thanks for trying."

"Why don't we all sit down to dinner," my mother says cheerily.

This time the meal is not silent. My mother talks, and she does her best to cheer us up. She tells us stories about the Depres- sion and how lucky we are to have food to eat.

Tuesday morning is a little bit more normal. Joining efforts, my mother and I manage to get the kids to school and me to


work on time. By 8:30, Bob, Stacey, Lou, and Ralph are in my office, and we're talking about what happened yesterday. Today, I find them much more attentive. Maybe it's because they've seen the proof of the idea take place on their own turf, so to speak.

"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."

Lou and Ralph are examining the two charts we made yes- terday. "What would have happened if the second operation hadn't been a robot, if it had been some kind of job with people?" asks Lou.

"We would have had another set of statistical fluctuations to complicate things," I say. "Don't forget we only had two opera- tions here. You can imagine what happens when we've got de- pendency running through ten or fifteen operations, each with its own set of fluctuations, just to make one part. And some of our products involve hundreds of parts."

Stacey is troubled. She asks, "Then how can we ever control what's going on out there?"

I say, "That's the billion-dollar question: how can we control the fifty-thousand or-who knows?-maybe it's fifty-million vari- ables which exist in this plant?"

"We'd have to buy a new super computer just to keep track of all of them," says Ralph.

I say, "A new computer wouldn't save us. Data management alone isn't going to give us more control."

"What about longer lead times?" asks Bob.

"Oh, you really think longer lead time would have guaran- teed our ability to ship that order to Hilton Smyth's plant?" I ask him. "How long had we already known about that order before yesterday, Bob?"

Bob wiggles back and forth. "Hey, all I'm saying is that we'd have some slop in there to make up for the delays."

Then Stacey says, "Longer lead times increase inventory, Bob. And that isn't the goal."

"Okay, I know that," Bob is saying. "I'm not fighting you. The only reason I mention the lead times is I want to know what we do about all this."

Everybody turns to me.

I say, "This much is clear to me. We have to change the way we think about production capacity. We cannot measure the ca-


pacity of a resource in isolation. Its true productive capacity de- pends upon where it is in the plant. And trying to level capacity with demand to minimize expenses has really screwed us up. We shouldn't be trying to do that at all."

"But that's what everybody else does," says Bob.

"Yes, everybody does. Or claims to. As we now can see, it's a stupid thing to try," I say.

"So how do other manufacturers survive?" asks Lou.

I tell him I was wondering that myself. What I suspect is that as a plant comes close to being balanced through the efforts of engineers and managers doing the wrong things, events head toward a crisis and the plant is very quickly un balanced by shift- ing workers or by overtime or by calling back some people from layoff. The survival incentive overrides false beliefs.

"Okay, but again, what are we going to do?" asks Bob. "We can't hire without division approval. And we've even got a policy against overtime."

"Maybe it's time to call Jonah again," says Stacey.

And I say, "I think maybe you're right."

It takes Fran half an hour to locate the area of the world where Jonah happens to be today, and another hour passes be- fore Jonah can get to the phone to talk to us. As soon as he's on the line, I have another secretary round up the staff again and corral them in my office so we can hear him on a speaker phone. While they're coming in, I tell Jonah about the hike with Herbie where I discovered the meaning of what he was telling me, and what we've learned about the effects of the two phenomena in the plant.

"What we know now," I tell him, "is that we shouldn't be looking at each local area and trying to trim it. We should be trying to optimize the whole system. Some resources have to have more capacity than others. The ones at the end of the line should have more than the ones at the beginning-sometimes a lot more. Am I right?"

"You're on the money," says Jonah.

"Good. Glad to hear we're getting somewhere," I say. "Only the reason I called is, we need to know where to go from here."

He says, "What you have to do next, Alex, is distinguish between two types of resources in your plant. One type is what I call a bottleneck resource. The other is, very simply, a non-bottle- neck resource."


I whisper to everybody to start taking some notes on this.

"A bottleneck," Jonah continues, "is any resource whose ca- pacity 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?"

"Right," I tell him.

"Once you have recognized these two types of resources," says Jonah, "you will begin to see vast implications."

"But, Jonah, where does market demand come in?" Stacey asks. "There has to be some relationship between demand and capacity."

He says, "Yes, but as you already know, you should not bal- ance capacity with demand. What you need to do instead is bal- ance the flow of product through the plant with demand from the market. This, in fact, is the first of nine rules that express the relationships between bottlenecks and non-bottlenecks and how you should manage your plant. So let me repeat it for you: Bal- ance flow, not capacity."

Stacey is still puzzled. She says, "I'm not sure I understand. Where do the bottlenecks and non-bottlenecks come into the pic- ture?"

Jonah says, "Let me ask you: which of the two types of re- sources determines the effective capacity of the plant?"

"It would have to be the bottleneck," she says.

I say, "That's right. It's like the kid on that hike last weekend -Herbie. He had the least capacity and he was the one who actually determined how fast the troop as a whole could move."

"So where should you balance the floor?" asks Jonah.

"Oh, I see," says Stacey. "The idea is to make the flow through the bottleneck equal to demand from the market."

"Basically, yes, you've got it," says Jonah. "Actually, the flow should be a tiny bit less than the demand." " "How come?" asks Lou.

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