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Chapter 24
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 picks Jonah up from the airport once again and brings him to the plant to meet with Stacey, Bob, Ralph, and Lou. Stacey explains that they have new bottlenecks, but Jonah suggests these new delays might not be bottlenecks at all. They go out into the plant and see that the NCX-10 has at least a month’s worth of parts waiting to go through it. Talking to a machinist, they gather that since the tagging system prioritizes bottleneck parts, the majority of what the machinists at other machines work on are only the bottleneck parts. Non-bottleneck parts are deprioritized and thus never get processed.
The plant’s new delays result from over-prioritizing bottlenecks at the expense of everything else. This suggests that although a manager needs to focus on the bottlenecks and maximize their capacity, they cannot neglect rest of the system either. By tagging bottleneck parts as more important than any other parts, Alex and his staff unwittingly halt production on all the pieces that do not need to be processed by a bottleneck.
Themes
Jonah realizes that he needs to explain more about the nature of bottleneck and non-bottleneck parts. He reminds Alex of his earlier statement that a busy plant is not necessarily an efficient or optimized plant. Drawing a diagram on the floor, Jonah demonstrates that in a system with bottlenecks, if all the non-bottleneck machines keep running all the time just to appear efficient, the plant inevitably runs into excesses of some parts and shortages of others. This creates excess inventory and thus reduces the plant’s throughput.
Jonah’s observations imply that although Alex allows for idle workers on the bottleneck machines, the rest of his factory is still operating according to traditional ideas of efficiency, doing unnecessary work in order to keep busy. Again, Jonah’s observations imply that individual efficiency is not the same as optimizing the entire system.
Themes
Although Bob argues for keeping their efficiencies high, Alex thinks about their warehouses of excess inventory and realizes Jonah is right. Letting some non-bottleneck machines or workers stand idle is less counterproductive than forcing everyone to work, but creating inventory problems and wasting money. Ralph summarizes the point, saying, “making an employee work and profiting from that work are two different things.” They need to work within the “constraints” of the system, rather than try to override them.
Ralph and Alex’s realizations suggest that, ironically, busy workers may be less productive than idle workers, since their busyness may burden the system as a whole. Ralph’s statement implies that only by working within the system’s constraints can they ensure that all work an employee performs is productive and profitable and encourages their overall goal.
Themes
Jonah states that by creating more parts than the system can turn into products, they are turning some machines into unnecessary bottlenecks. Instead, they should aim to “utilize” each machine or resource—producing exactly the amount that the system can take all the way through the manufacturing process and turn into sellable product, or throughput. As they walk back to the conference room, Jonah tells Alex and his staff to consider how they will solve their problem as they walk back to the conference room.
Jonah effectively argues against any unnecessary work whatsoever, even if that work creates spare inventory that may be used later. Within his metrics of throughput, inventory, and operating expense, excess inventory represents money that is trapped in the system rather than existing as cash, and it thus decreases throughput.
Themes
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