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
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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
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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.'
'I can crank something out in no time,' said Ralph, 'but I'm not going to promise it'll work.'
I told him, 'Relax; as long as we ease the load on the milling machines, we'll be okay for the short haul. That'll give you the time to get something basic in place.'
'You may feel you have the time now to relax,' said Jonah, 'but I have to catch a plane for Chicago in thirty- five minutes.'
'Oh, shit,' I muttered, automatically glancing at my watch. 'I guess we'd better move.'
It was not a graceful parting. Jonah and I ran out of the building, and I broke numerous speed limits-without incident- getting him to the airport.
'I have, shall we say, a special interest in plants like yours,' said Jonah. 'So I'd appreciate it if you'd keep me informed of what happens.'
'Sure,' I told him. 'No problem. In fact, I'd planned on it.'
'Good,' said Jonah. 'I'll be talking to you.'
And with that he was out of the car and, with a wave, was
sprinting through the terminal doors. I didn't get a call, so I
suppose he made it.
When I go to work the next morning, we have a meeting about how to implement this approach. But before we can get down to talking about it, Bob Donovan starts waving a red flag at us.
'You know, we could be walking into a big problem,' says Bob.
'What's that?' I ask.
'What happens if efficiencies all over the plant go down?' he asks.
I say, 'Well, I think that's a risk we'll have to take.'
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'Yeah, but it sounds like we're going to have a lot of people idle around here if we do this,' says Bob
'Yeah, we might have some people idle from time to time,' I admit.
'So are we just supposed to let everyone stand around out there?' asks Bob.
'Why not?' asks Stacey. 'Once the somebody is already on the payroll, it doesn't cost us any more to have
