The Goal

'Wait a minute. How do you know it's really a bottleneck?' asks Jonah.

She says, 'Well, since the parts are held up, I just figured it had to be...'

'Before we jump to conclusions, let's invest half an hour to go into the plant so we can find out what's happening,' Jonah says.

So we parade into the plant, and a few minutes later we're standing in front of a group of milling machines. Off to one side are big stacks of inventory marked with green tags. Stacey stands there and points out the parts that are needed in final assembly. Most of the missing parts are right here and all bear green tags. Bob calls over the foreman, a hefty guy by the name of Jake, and introduces him to Jonah.

'Yeah, all them parts been sittin' here for about two, three weeks or more,' says Jake.

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'But we need them now,' I say. 'How come they're not being worked on?'

Jake shrugs his shoulders. 'You know which ones you want, we'll do 'em right now. But that goes against them rules you set up in that there priority system.'

He points to some other skids of materials nearby.

'You see over there?' says Jake. 'They all got red tags. We got to do all of 'em before we touch the stuff with green tags. That's what you told us, right?'

Uh- huh. It's becoming clear what's been happening.

'You mean,' says Stacey, 'that while the materials with green tags have been building up, you've been spending all your time on the parts bound for the bottlenecks.'

'Yeah, well, most of it,' says Jake. 'Hey, like we only got so many hours in a day, you know what I mean?'

'How much of your work is on bottleneck parts?' asks Jo- nah.

'Maybe seventy-five or eighty percent,' says Jake. 'See, ev- erything that goes to heat-treat or the NCX-10 has to pass through here first. As long as the red parts keep coming-and they haven't let up one bit since that new system started-we just don't have the time to work on very many of the green-tag parts.'

There is a moment of silence. I look from the parts to the machines and back to Jake again.

'What the hell do we do now?' asks Donovan in echo to my own thoughts. 'Do we switch tags? Make the missing parts red instead of green?'

I throw up my hands in frustration and say, 'I guess the only solution is to expedite.'

'No, actually, that is not the solution at all,' Jonah says, 'be- cause if you resort to expediting now, you'll have to expedite all the time, and the situation will only get worse.'

'But what else can we do?' asks Stacey.

Jonah says, 'First, I want us to go look at the bottlenecks, because there is another aspect to the problem.'

Before we can see the NCX-10, we see the inventory. It's stacked as high as the biggest forklift can reach. It's not just a mountain, but a mountain with many peaks. The piles here are even bigger than before we identified the machine as a bottle- neck. And tied to every bin, hanging from every pallet of parts is

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a red' tag. Somewhere behind it all, its own hugeness obscur ed from our view, is the NCX-10.

'How do we get there from here?' asks Ralph, looking for a path through the inventory.

'Here, let me show you,' says Bob.

And he leads us through the maze of materials until we reach the machine.

Gazing at all the work-in-process around us, Jonah says to us, 'You know, I would guess, just from looking at it, that you have at least a month or more of work lined-up here for this machine. And I bet if we went to heat- treat we would find the same situation. Tell me, do you know why you have such a huge pile of inventory here?'

'Because everyone ahead of this machine is giving first pri- ority to red parts,' I suggest.

'Yes, that's part of the reason,' says Jonah. 'But why is so much inventory coming through the plant to get stuck here?'

Nobody answers.

'Okay, I see I'm going to have to explain some of the basic relationships between bottlenecks and non- bottlenecks,' says Jo- nah. Then he looks at me and says, 'By the way, do you remem- ber when I told you that a plant in which everyone is working all the time is very in efficient? Now you'll see exactly what I was talking about.'

Jonah walks over to the nearby Q.C. station and takes a piece of chalk the inspectors use to mark defects on the parts they reject. He kneels down to the concrete floor and points to the NCX-10.

'Here is your bottleneck,' he says, 'the X-what-ever-it-is ma- chine. We'll simply call it 'X.' '

He writes an X on the floor. Then he gestures to the other machines back down the aisle.

'And feeding parts to X are various non-bottleneck ma- chines and workers,' he says. 'Because we designated the bottle- neck as X, we'll refer to these non-bottlenecks as 'Y' resources. Now, for the sake of simplicity, let's just consider one non-bottle- neck in combination with one bottleneck...'

With the chalk, he writes on the floor:

Y -' X

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Product parts are what join the two in a relationship with each other, Jonah explains, and the arrow obviously indicates the flow of parts from one to the other. He adds that we can consider any non-bottleneck feeding parts to X, because no matter which one we choose, its inventory must be processed at some subse- quent point in time by X.

'By the definition of a non-bottleneck, we know that Y has extra capacity. Because of its extra capacity, we also know that Y will be faster in filling the demand than X,' says Jonah. 'Let's say both X and Y have 600 hours a month available for production. Because it is a bottleneck, you will need all 600 hours of the X machine to meet demand. But let's say you need only 450 hours a month, or 75 percent, of Y to keep the flow equal to demand. What happens when Y has worked its 450 hours? Do you let it sit idle?'

Bob says, 'No, we'll find something else for it to do.'

'But Y has already satisfied market demand,' says Jonah.

Bob says, 'Well, then we let it get a head start on next month's work.'

'And if there is nothing for it to work on?' asks Jonah.

Bob says, 'Then we'll have to release more materials.'

'And that is the problem,' says Jonah. 'Because what hap- pens to those extra hours of production from Y? Well, that inven- tory has to go somewhere. Y is faster than X. And by keeping Y