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The Goal (Goldratt E M)

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"Because if you keep it equal to demand and the market demand goes down, you'll lose money," says Jonah. "But that's a fine point. Speaking fundamentally, the bottleneck flow should be on a par with demand."

Bob Donovan is now making various noises, trying to get into the conversation.

"Excuse me, but I thought bottlenecks were bad," says Bob. "They ought to be eliminated where possible, right?"

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"No, bottlenecks are not necessarily bad-or good," says Jo- nah, "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."

That makes sense to me as I'm listening, because I'm remem- bering how I used Herbie to control the troop during the hike.

"Now I have to run," says Jonah, "because you caught me during a ten-minute break in a presentation."

I jump in. "Jonah, before you go-!"

"Yes?"

"What's our next step?"

He says, "Well, first of all, does your plant have any bottle- necks?"

"We don't know," I tell him.

"Then that's your next step," he says. "You have to find this out, because it makes an enormous difference in how you manage your resources."

"How do we find the bottlenecks?" says Stacey.

"It's very simple, but it would take a few minutes to explain. Look, try to figure that out for yourselves," says Jonah. "It's re- ally easy to do if you think about it first."

I say, "Okay, but..."

"Good- bye for now," he says. "Call me when you know if you have a bottleneck."

The speaker phone issues a click, followed by a fuzzy hum.

"Well... what now?" asks Lou.

"I guess we look at all our resources," I say, "and compare them against market demand. If we find one in which demand is greater than capacity, then we'll know we've got a bottleneck."

"What happens if we find one?" asks Stacey.

"I guess the best thing to do would be what I did to the scout troop," I say. "We adjust capacity so the bottleneck is at the front of production."

"My question," Lou says, "is what happens if our resource with the least capacity in fact has a capacity greater than what market demand calls for?"

"Then I guess we'd have something like a bottle without a neck," I say.

"But there would still be limits," says Stacey. "The bottle would still have walls. But they'd be greater than the market de- mand."

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"And if that's the case?" asks Lou.

"I don't know," I tell him. "I guess the first thing to do is find out if we've got a bottleneck."

"So we go look for Herbie," says Ralph. "If he's out there." "Yeah, quick, before we talk ourselves to death," says Bob.

I walk into the conference room a few days later and there's paper everywhere. The main table is covered with computer print-outs and binders. Over in the corner, a data terminal has been installed; next to it, a printer is churning out even more paper. The wastebaskets are full. So are all the ashtrays. The litter of white styrofoam coffee cups, empty sugar packets and creamer containers, napkins, candy bar and cracker wrappers, and so on is scattered about. What has happened is the place has been turned into our headquarters in the search for Herbie. We have not found him yet. And we're getting tired.

Sitting at the far end of the main table is Ralph Nakamura. He and his data processing people, and the system data base they manage, are essential to the search.

Ralph does not look happy as I come in. He's running his skinny fingers through his thinning black hair.

"This isn't the way it's supposed to be," he's saying to Stacey and Bob.

"Ahh, perfect timing," says Ralph when he sees me. "Do you know what we just did?"

"You found Herbie?" I say.

Ralph says, "No, we just spent two and a half hours calculat- ing the demand for machines that don't exist."

"Why'd you do that?"

Ralph starts to sputter. Then Bob stops him.

"Wait, wait, wait a minute. Let me explain," says Bob. "What happened was they came across some routings which still listed some of the old milling machines as being part of the processing. We don't use them-"

"Not only don't we use them, just found out we sold them a year ago," says Ralph.

"Everybody down in that department knows those machines aren't there anymore, so it's never been a problem," says Bob.

So it goes. We're trying to calculate demand for every re- source, every piece of equipment, in the plant. Jonah had said a bottleneck is any resource which is equal to or less than the mar-

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ket demand placed on it. To find out if we've got one then, we concluded we first would have to know the total market demand for products coming out of this plant. And, second, we would have to find out how much time each resource has to contribute toward filling the demand. If the number of available hours for production (discounting maintenance time for machines, lunch and breaks for people, and so on) for the resource is equal to or less than the hours demanded, then we know we've found our Herbie.

Getting a fix on the total market demand is a matter of pull- ing together data which we have on hand anyway-the existing backlog of customer orders, and the forecast for new product and spare parts. It's the complete product mix for the entire plant, including what we "sell" to other plants and divisions in the com- pany.

Having done that, we're now in the process of calculating the hours each "work center" has to contribute. We're defining a work center as any group of the same resources. Ten welders with the same skills constitute a work center. Four identical machines constitute another. The four machinists who set up and run the machines are still another, and so on. Dividing the total of work center hours needed, by the number of resources in it, gives us the relative effort per resource, a standard we can use for com- parison.

Yesterday, for instance, we found the demand for injection molding machines is about 260 hours a month for all the injec- tion 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. We're coming up with bills of material that don't match the routings, routings that don't have the current run-times-or the correct machines, as we just found out-and so on.

"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.

"Hell, with engineering changes, shifting labor around, and all that happening all the time, it's just plain tough to keep up with it no matter what," says Bob.

Ralph shakes his head. "To double-check and update every piece of data relevant to this plant could take months!"

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