The Goal: A Process of Ongoing Improvement: Chapter 29 Summary & Analysis

In their house in Bearington, Alex lies awake next to Julie, who is sleeping. It’s four a.m., but Alex can’t stop thinking about the plant. Johnny Jons won them a host of new contracts, and the decreased batch sizes have sped the entire plant’s manufacturing process up. Although there is still some idle time for non-bottlenecks, the smaller batch sizes make everything move quicker, providing all workers and machines with more consistent work to do. Inventory is lower than ever. But there is also bad news, and Alex climbs out of bed to think about it. Julie approaches him from behind and asks him to come back to bed.

Alex tells Julie that he can’t sleep, and she intuits that it is because of his work. When she asks Alex to tell her about it, Alex is surprised that she would be interested, but he begins to explain: although their actual expenses haven’t gone up at all, because more people handle each part more often, the way that corporate headquarters wants them to do their accounting makes it appear as if their cost-per-part is swelling. The traditional metric assumes that all workers will always be fully occupied and to handle more parts they have to hire more people, but this isn’t true for Alex’s new system. Rather than dwelling on this, though, Alex opts to take Julie out for breakfast.

At the plant, Lou tells Alex that he’s found a new way to calculate cost-per-part that doesn’t make their expenses appear artificially inflated. However, it breaks with traditional corporate accounting rules, and Lou knows that Ethan Frost would never allow it if he knew about it. Alex and Lou agree to use Lou’s new method and hope that Frost doesn’t notice. Shortly after, Johnny Jons calls Alex and tells him that Bucky Burnside wants to buy from them again, but they appear to be desperate—they’re asking for 1,000 products made and shipped in two weeks. Jons tells Alex that it seems nearly impossible, but if Alex can pull it off, Burnside will make their plant his preferred supplier. Alex tells him he’ll call back this afternoon with an answer.

Alex meets with Bob, Ralph, and Stacey to discuss Burnside’s order. Alex wonders if they could cut their batch size in half again, if that would save them the time they need. However, Stacey realizes that a control module they need is currently out of stock and must be shipped from California, and the provider can’t deliver them for four to six weeks. After negotiating early partial shipments with the control module supplier, Alex calls Johnny Jons back and tells him that they could ship Burnside 250 products per week for four weeks, with the first rolling out in two weeks. Jons thinks Burnside might accept, though he thinks that it still sounds like a hard order to fill.