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Chapter 22
Themes
Key
LitCharts assigns a color and icon to each theme in The Goal: A Process of Ongoing Improvement, which you can use to track the themes throughout the work.
The Importance of Goal-Setting
Working with Constraints
Ineffective vs. Effective Business Metrics
Efficiency vs. Optimization
The Cost of Corporate Success
Summary
Analysis
Alex sits in his office and thinks back to his date with Julie on Saturday night. They had fun together, and they’ve been meeting a couple of times per week since. Alex is tired, but happy with the arrangement. At that moment, Ted Spencer, who supervises the heat-treating machine, angrily tells Alex that Ralph is causing him trouble and asking for all sorts of data and reports. When Alex asks Ralph about it, Ralph tells him that he noticed that the heat-treating machine was sitting idle for hours because the operators were busy with other things. Ralph simply wants to collect data on actual operation times, so they can see where they’re losing time and money due to bottlenecks. Alex is frustrated to hear about the idle bottlenecks and encourages Ralph to collect data for both the heat-treating machine and the NCX-10.
Although Alex and his staff were able to identify their bottlenecks without sufficient data, Ralph’s desire to collect data to measure the bottlenecks’ efficiency indicates that such data collection is still useful, especially amid a complex system. However, Ted Spencer’s anger at being questioned about metrics and data collection demonstrates that management not only involves finances and processes, but also solving interpersonal conflicts between employees.
Themes
Alex meets with Bob to discuss the problem, and Bob tells him that since both the heat-treating machine and the NCX-10 take hours to process a batch, the operators are left with nothing to do, so they find other projects. Alex decides that they need to assign foremen to both machines full-time, even though those foremen will have a lot of idle time on their hands. Bob agrees to do it but warns Alex that they’re individual efficiencies will appear to go down, on paper. The next day, Bob presents his plan to move some machinists around so that there are always operators attending the heat-treating machine and the NCX-10, who will eliminate any time that either machine spends idle. Bob also plans to set some machinists up on the three machines that can help the NCX-10 do its work.
The operators’ decision to look for other work during idle hours seems reasonable—they want to remain efficient and work hard, so they keep themselves busy. However, the fact that they cause delays on the bottlenecks and cost the plant money reiterates Jonah’s assertion that individual efficiency is not the same thing as optimization—by focusing on keeping each person and machine efficient, a manager can actually lose money rather than save it. Ironically, idle workers may actually be a sign that the system is well-optimized and operating efficiently overall.
Themes
Bob puts his new plan into practice. Over the next week, Ralph notes that one foreman, Mike Haley, consistently manages to process 10 percent more parts through the heat-treating machines than anyone else. Alex visits Mike during his shift, and Mike shows him how his workers pre-sort the batches that are about to be heat-treated, which cuts down on the time it takes to load each furnace and fits a few more parts in per batch. Mike also thinks that he could build a table that could be pre-stacked with parts and inserted into the furnace by a forklift, which would save several hours of loading time each day. Alex congratulates Mike on his ideas and tells him they’ll turn his ideas into official processes. Alex wants Mike to keep innovating.
Just as Bob increases the capacity of the NCX-10 bottleneck by reusing old machines, Mike demonstrates that a bottleneck’s capacity can be subtly increased by creating better operating procedures, especially when that bottleneck requires human input. Because the bottlenecks’ capacity determines the productive capacity of the entire system, Mike’s innovations will ultimately increase the plant’s throughput and earn more money.
Themes
In addition, since the plant only heat-treats metal parts when they become brittle from cutting and shaping, Bob determines that by slightly adjusting the way they cut some parts, they can eliminate the need for heat-treating about 20 percent of all the parts that currently run through the furnace.
Bob’s innovation effectively increases the capacity of a bottleneck by allowing some parts to sidestep it altogether, That is, allowing some parts to bypass the bottleneck is the same thing as increasing that bottleneck’s capacity.
Themes
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