E Goldratt - The Goal

Anyway, I turn over the microphone to Donovan and he tells them how we're going to prioritize all materials in the plant so everybody knows what to work on.

"By the end of today, all work-in-process on the floor will be marked by a tag with a number on it," he says and holds up some samples. "The tag will be one of two colors: red or green.

"A red marker means the work attached to it has first prior- ity. The red tags go on any materials needing to be processed by a bottleneck. When a batch of parts with that color marker arrives at your work station, you are to work on them right away."

Bob explains what we mean by "right away." If the employee is working on a different job, it's okay to finish what he's doing, as long as it doesn't take more than half an hour. Before an hour has passed, certainly, the red-tagged parts should be getting at- tention.

"If you are in the middle of a setup, break the setup immedi- ately and get ready for the red parts. When you've finished the bottleneck parts, you can go back to what you were doing before.

"The second color is green. When there is a choice between working on parts with a red marker and parts with a green marker, you work on the parts with the red marker first. So far,

most of the work-in-process out there will be marked by green. Even so, you work on green orders only if you don't have any red ones in queue.

"That explains the priority of the colors. But what happens when you've got two batches of the same color? Each tag will have a number marked on it. You should always work on the materials with the lowest number."

Donovan explains some of the details and answers a couple of questions, after which I wrap it up.

I tell them, "This meeting was my idea. I decided to take you away from your jobs, mostly because I wanted everyone to hear the same message at the same time, so that-I hope-you'll have a better understanding of what's going on. But another reason is that I know it's been a long time since most of you have heard any good news about the plant. What you've just heard about is a beginning. Even so, the future of this plant and the security of your jobs will only be assured when we start making money again. The most important thing you can do is to work with us... and, together, we'll all be working to keep this plant work- ing."

Late that afternoon, my phone rings.

"Hi, this is O'Donnell. Go ahead with the new policy on lunch and coffee breaks. We won't challenge it."

I relay the news to Donovan. And with these small victories, the week ends.

At 7:29 on Saturday evening, I park the washed, waxed, buffed and vacuumed Mazda in the Barnett driveway. I reach for the bouquet of flowers beside me on the seat, and step out onto the lawn wearing my new courting duds. At 7:30, I ring the door- bell.

Julie opens the door.

"Well, don't you look nice," she says.

"So do you," I tell her.

And she does.

There are a few stiff minutes spent talking with her parents. Mr. Barnett asks how everything is going at the plant. I tell him it looks like we may be on our way to a recovery, and mention the new priority system and what it will do for the NCX-10 and heat- treat. Both of her parents look at me blankly.

"Shall we go?" suggests Julie.

Joking, I tell Julie's mother, "I'll have her home by ten o'clock."

"Good," says Mrs. Barnett. "We'll be waiting."

"There you have it," says Ralph.

"Not bad," says Stacey.

"Not bad? It's a lot better than not bad," says Bob.

"We must be doing something right," says Stacey.

"Yeah, but it isn't enough," I mutter.

A week has passed. We're grouped around a computer ter- minal in the conference room. Ralph has extracted from the com- puter a list of overdue orders that we shipped last week.

"Isn't enough? At least it's progress," says Stacey. "We shipped twelve orders last week. For this plant, that's not bad. And they were our twelve most overdue orders."

"By the way, our worst overdue order is now only forty four days late," says Ralph. "As you may recall, the worst one used to be fifty eight days."

"All right!" says Donovan.

I step back to the table and sit down.

Their enthusiasm is somewhat justified. The new system of tagging all the batches according to priority and routing has been working fairly well. The bottlenecks are getting their parts promptly. In fact, the piles of inventory in front of them have grown. Following bottleneck processing, the red-tagged parts have been getting to final assembly faster. It's as if we've created an "express lane" through the plant for bottleneck parts.

After putting Q.C. in front of the bottlenecks, we discovered that about five percent of the parts going into the NCX-10 and about seven percent going into heat-treat did not conform to quality requirements. If those percentages hold true in the fu- ture, we'll effectively have gained that time for additional throughput.

The new policy of having people cover the bottlenecks on lunch breaks has also gone into effect. We're not sure how much we've gained from that, because we didn't know how much we were losing before. At least we're doing the right thing now. But I have heard reports that from time to time the NCX-10 is idle- and it happens when there is nobody on break. Donovan is sup- posed to be looking into the causes.

The combination of these has allowed us to ship our most critical orders and to ship a few more of them than normal. But I know we're not going fast enough. A few weeks ago we were limping along; now we're walking, but we ought to be jogging.

Glancing back toward the monitor, I see the eyes are upon me.

"Listen... I know we've taken a step in the right direc- tion," I explain. "But we have to accelerate the progress. It's good that we got twelve shipments out last week. But we're still having some customer orders become past due. It's not as many, I'll grant you, but we still have to do better. We really shouldn't have any late orders."

Everyone walks away from the computer and joins me around the table. Bob Donovan starts telling me how they're planning some refinements on what we've already done.

I say, "Bob, those are fine, but they're minor. How are we coming on the other suggestions Jonah made?"

Bob glances away.

"Well... we're looking into them," he says.

I say, "I want recommendations on offloading the bottle- necks ready for our Wednesday staff meeting."

Bob nods, but says nothing.

"You'll have them for us?" I ask.

"Whatever it takes," he says.

That afternoon in my office, I have a meeting with Elroy Langston, our Q.C. manager, and Barbara Penn, who handles employee communications. Barbara writes the newsletters, which are now explaining the background and reasons for the changes taking place in the plant. Last week, we distributed the first issue. I put her together with Langston to have her work on a new project.

After parts exit the bottlenecks, they often tend to look al- most identical to the parts going into the bottlenecks. Only a close examination by a trained eye will detect the difference in some cases. The problem is how to make it easy for the employee to tell the two apart... and to make it possible for the employee to treat the post-bottleneck parts so more of them make it to assem- bly and are shipped as quality products. Langston and Penn are in my office to talk about what they've come up with.

"We already have the red tags," says Penn. "So that tells us

the part is on a bottleneck routing. What we need is a simple way to show people the parts they need to treat with special attention -the ones they need to treat like gold."