Thoughts about and quotes from the book The Goal by Eliyahu Goldratt.
Productivity is brining a company closer to its goal.... Every action that does not bring a company closer to its goal is not product.
Was your plant able to ship even more more product per day as a result of what happened in the department where you installed the robots... if your inventories haven't gone down ... and your employee expense was not reduced.. And if your company isn't selling more products--which obviously it can't, if you're not shipping more of them--then you can't tell me these robots increased your plant's productivity.
Productivity is the act of bringing a company closer to its goal... productivity is meaningless unless you know what your goal is.
How do you keep the overall goal for the company in mind, but still make it relevant and measurable for each level of the organization? ... There is more than one way to express the goal... The goal stays the same, but we can state it in different ways...
A balanced plant is essentially what every manufacturing manager in the whole western world has struggled to achieve. It's a plant where the capacity of each and every resource is balanced exactly with demand from the market.
A bottleneck is a resource whose capacity is equal to or less than the demand placed upon it. And a non-bottleneck resource is any resource whose capacity is greater than the demand placed on it.
Make sure the bottleneck works only on good parts by weeding out the ones that are defective. If you scrap a part before it reaches the bottleneck, all you have lost is a scrapped part. But if you scrap the part after it's passed the bottleneck, you have lost time that cannot be recovered.
To increase the capacity of the plant is to increase the capacity of only the bottlenecks.... The bottlenecks stay bottlenecks. What we must do is find enough capacity for the bottlenecks to become more equal to demand.
The cause was that the bottleneck parts were held up by this non-bottleneck machine running non-bottleneck parts.... But he didn't know any better ... He couldn't distinguish between an important batch of parts and an unimportant one.... Nobody told him.
You should balance capacity with demand. What you need to do instead is balance flow of product through the plant with demand from the market... The idea is to make the flow through the bottleneck equal to demand from the market.
With faster turnaround on orders, customers get their orders faster... Not only that, but with shorter lead times we can respond faster.
What you claim is that we have moved from the ‘cost world' to the throughput world.
Striving to constantly activate all resources all the time is not a recipe for effective operations. On the contrary, the exact opposite is true; to reach effective operations, local efficiencies must be abolished.
Most of the struggle for high efficiencies is taking you in the opposite direction of your goal... A plant in which everyone is working all the time is very inefficient.
We are always talking about the organization as a whole-- not...about one department... We are not concerned with local optimums.
Making an employee work and profiting from that work are two different things.
When you make a non-bottleneck do more work than this machine you are not increasing productivity. On the contrary, you are doing exactly the opposite. You are creating excess inventory, which is against the goal.
Since we began withholding materials from the floor until the bottlenecks are ready for them, the non-bottlenecks now have idle time. It's perfectly okay to have more setups on non-bottlenecks, because all we're doing is cutting into time the machines would spend being idle.
Now, even though we've cut batch sizes, work is flowing through the plan more smoothly than ever.
What's happening isn't an averaging out of the fluctuations in our various speeds, but an accumulation of the fluctuations. And mostly it's an accumulation of the slowness--because dependency limits the opportunities for higher fluctuations.
In a linear dependency of two or more variables, the fluctuations of the variables down the line will fluctuate around the maximum deviation established by any preceding variables.
If you result to expediting now, you'll have to expedite all the time, and the situation will only get worse.
The key this time is we make sure the bottlenecks are processing parts for those late orders according to the same priority.
Making the bottlenecks more productive has put more demand on the other work centers. If the demand on another work center has gone above one hundred percent, then we've created a new bottleneck.
Whenever the constraint is broken it changes conditions to the extent that it is very dangerous to extrapolate from the past.