E Goldratt - The Goal

"You have Herbie beat the drum," says Sharon.

I think about it and say, "Yeah, that's not bad."

"But my idea is better," says Dave.

I turn to him. "Okay, wise guy, what's your idea?"

"Tie ropes to everyone," says Dave.

"Ropes?"

"You know, like mountain climbers," he says. "You tie every- one together at the waist with one long rope. So, that way, no one could get left behind, and nobody could speed up without every- body speeding up."

I say, "Hmmm... that's very good."

It would mean that the line-which would translate to the total inventory in the plant-could never be longer than the rope. And the rope, of course, could be of a pre-determined length, which means we could control it with precision. Everyone

would have to walk at the same speed . I look at Dave, a little in awe of his creativity.

"Come to think of it, the rope makes it sound like having physical links between all the equipment," I tell him, "which is like an assembly line."

"Yeah, an assembly line," says Dave. "Didn't you tell me once that an assembly line is supposed to be the best way to make things?"

"Well, yes, it's the most efficient way to manufacture," I say. "In fact, we use that approach when we do the final assembly for most of our products. The problem is that an assembly line won't work throughout the whole plant."

"Oh," says Dave.

"But those are both good ideas you two thought up," I tell them. "In fact, if we changed each of your ideas just a little bit we'd almost have the solution suggested to us today."

"Like how?" asks Sharon.

"See, to keep the line from spreading, it actually wouldn't be necessary to keep everyone marching to exactly the same step or to keep everyone tied to the rope," I tell them. "What we really have to do is just keep the kid at the front of the line from walk- ing faster than Herbie. If we can do that, then everybody will stay together."

"So we just tie the rope from Herbie to the kid at the front," says Dave.

"Or, maybe Herbie and the boy at the front of the line have signals," says Sharon. "When the boy in front goes too fast, Herbie tells him to wait or slow down."

"That's right," I say. "Both of you figured it out."

"So what do we both win?" asks Sharon.

"What do you want?" I ask. "A pizza with everything? A night at the movies?"

They're quiet for a moment.

"The movies sound good," says Sharon, "but what I'd really like is if you could get Mom to come home again."

Now it gets very quiet.

Dave says finally, "But if you can't, we'll understand."

"Well, I'm doing my best," I say. "Meanwhile, how about the movies?"

After the kids have gone to bed, I sit up wondering for the hundredth time whether Julie will come back. Compared with

my marital difficulties, the inventory problem at the plant seems simple-or at least it seems simple now. I guess every problem is easy once you've figured it out.

We are, in effect, going to do what my two kids came up with. The Herbies (the bottlenecks) are going to tell us when to let more inventory into the system-except we're going to use the aid of computers instead of drums and ropes.

After we returned to the conference room in the office build- ing today, we started talking, and we all agreed that we're obvi- ously releasing too much material. We don't need five or six weeks of inventory in front of the bottleneck to keep it produc- tive.

"If we can withhold materials for red parts, instead of push- ing them out there as soon as the first non-bottleneck has nothing to do," said Stacey, "the milling machines will then have time to work on the green parts. And the parts we're missing will reach assembly with no problem."

Jonah nodded and said, "That's right. What you have to do is find a way to release the material for the red parts according to the rate at which the bottlenecks need material-and strictly at that rate."

Then I said, "Fine, but how do we time each release of mate- rial so it arrives at the bottleneck when it's needed?"

Stacey said, "I'm not sure, but I see what you're worried about. We don't want the opposite problem of no work in front of the bottleneck."

"Hell, we got at least a month before that happens, even if we released no more red tags from today on," said Bob. "But I know what you mean. If we idle the bottleneck, we lose throughput."

"What we need," I said, "is some kind of signal to link the bottlenecks with the release-of-materials schedule."

Then Ralph, to my surprise, spoke up and said, "Excuse me, this is just a thought. But maybe we can predict when to release material by some kind of system based on the data we've kept on both the bottlenecks."

I asked him what he was getting at.

He said, "Well, since we started keeping data on the bottle- necks, I've been noticing I'm able to predict several weeks in advance what each bottleneck will be working on at a particular time. See, as long as I know exactly what's in queue, I just take

the average setup and process times for each type of part, and I'm able to calculate when each batch should clear the bottleneck. Because we're only dealing with one work center, with much less dependency, we can average the statistical fluctuations and get a better degree of accuracy."

Ralph went on to say that he knows from observation it takes about two weeks, plus or minus a day or two, for material to reach the bottlenecks from the first operations.

"So by adding two weeks to the setup and process times of what's in queue at the bottleneck," said Ralph, "I know how long it will take until the bottleneck is actually working on material we release. And as each batch leaves the bottleneck, we can update our information and calculate a date when Stacey should release more red-tag material."

Jonah looked at Ralph and said, "that's excellent!"

"Ralph," I said, "that's terrific. How accurate do you really think we can be with this?"

"I'd say we'd be accurate to within plus or minus a day," he said. "So if we keep, say, a three-day stock of work-in-process in front of each bottleneck, we should be safe."

Everyone was telling Ralph how impressed they were when Jonah said, "But, in fact, Ralph, you can do much more than that with the same information."

"Like what?" asked Ralph.

Jonah said, "You can also attack the inventory problems in front of assembly."

"You mean we not only can do something about excess in- ventory on the bottleneck parts, but on the non-bottleneck parts as well?" I asked.

"Exactly," said Jonah.

But Ralph said, "Sorry, folks, I'm not sure how I'd do that."

Then Jonah explained it to him-and all of us. If Ralph can determine a schedule for releasing red-tag materials based on the bottlenecks, he can also determine a schedule for final assembly. Once he knows when the bottleneck parts will reach final assem- bly, he can calculate backwards and determine the release of the non-bottleneck materials along each of their routes. In this way, the bottlenecks will be determining the release of all the materials in the plant.

I said, "You know, that's going to produce the same effect as

moving the bottlenecks to the head of production, which is what I'd intended for us to do."

"Yeah, it sounds good," said Ralph. "But I have to warn you, I can't say how long it'll take before I can do all that. I mean, I can have schedule for the red-tagged materials worked out in a fairly short order. The rest of it will take awhile."

"Aw, come on, Ralphie," said Bob, "a computer wiz like you ought to be able to crank that out in no time."