The Goal

'Singapore,' he says.

'Oh.'

'By the way, from my hotel I'm watching the sun r ise ,' Jonah says. 'Alex, I wouldn't have called you at home, but I'm not going to be able to talk to you again for a few weeks.'

'Why not?'

'Well, it's a long story and I can't go into it now,' he says. 'But I'm sure we'll have a chance to discuss it some time.'

'I see...' I wonder what's going on, but say, 'That's too bad. It puts me in a kind of a bind, because I was just about to ask for your help again.'

'Has something gone wrong?' he asks.

'No,' I tell him. 'Everything is generally going very well from an operations standpoint. But I just had a meeting with my division vice president, and I was told the plant has to show an even bigger improvement.'

'You're still not making money?' he asks.

I say, 'Yes, we are making money again, but we need to accelerate the improvement to save the plant from being shut down.'

I hear the trace of a chuckle on the other end of the line, and Jonah says, 'If I were you, I wouldn't worry too much about being shut down.'

'Well, from what the head of the division has told me, the possibility of a shut-down is real,' I tell him. 'And until he says otherwise, I can't afford to take this lightly.'

'Alex, if you want to improve the plant even more, I'm with you all the way,' Jonah says. 'And since I won't have the oppor- tunity to speak to you for awhile, let's talk about it now. Bring me up to date on what's happening.'

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So I do. Then, wondering if we've reached some theoretical limit by now, I ask him if there is anything else we can try.

'Anything else?' he says. 'Believe me, we have only begun. Now, here's what I suggest...'

Early the next morning, I'm in my office at the plant consid- ering what Jonah told me. Outside is the dawn of the day he's already seen in Singapore. Stepping out to get a cup of coffee, I find Stacey at the coffee machine.

'Hello there,' she says. 'I hear everything went fairly well for us at headquarters yesterday.'

'Well, not bad,' I say. 'I'm afraid we still have a way to go before we convince Peach we're good for the long term. But I talked to Jonah last night.'

'Did you tell him about our progress?' she asks.

'Yes,' I say. 'And he suggested we try what he called 'the next logical step.''

I see her face take on a nervous grin. 'What's that?'

'Cut our batch sizes in half on non-bottlenecks,' I say.

Stacy takes a step back as she thinks about this. 'But why?' she asks.

I say with a smile, 'Because in the end we'll make more money.'

'I don't understand,' she says. 'How is that going to help us?'

'Hey, Stacey, you're in charge of inventory control,' I tell her. 'You tell me what would happen if we cut our batch sizes in half.'

Thinking, she sips her coffee for a moment. Her brow com- presses in concentration. Then she says, 'If we cut our batch sizes in half, then I guess that at any one time we'd have half the work- in-process on the floor. I guess that means we'd only need half the investment in work-in-process to keep the plant working. If we could work it out with our vendors, we could conceivably cut all our inventories in half, and by cutting our inventories in half, we reduce the amount of cash tied up at any one time, which eases the pressure on cash flow.'

I'm nodding each time she says a sentence, and finally I say, 'That's right. That's one set of benefits.'

She says, 'But to reap those benefits fully, we'd have to have our suppliers increase the frequency of deliveries to us and re- duce the quantity of each delivery. That's going to take some

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negotiating through purchasing, and I'm not sure all the vendors will go for it.'

I tell her, 'That's something we can work on. Eventually they'll go for it because it's to their advantage as well as ours.'

'But if we go to smaller batch sizes,' she says, squinting at me in cynicism, 'doesn't that mean we'll have to have more set- ups on equipment?'

'Sure,' I say, 'don't worry about it.'

'Don't- ?'

'Yeah, don't worry about it.'

'But Donovan-'

'Donovan will do just fine, even with more setups,' I say. 'And, meanwhile, there is another set of benefits, aside from what you said, that we can have almost immediately.'

'What's that?' she asks.

'You really want to know?'

'Sure, I do.'

'Good. You set up a meeting with the other functions and I'll tell everyone at the same time.'

For dumping that little chore of the meeting arrangements on her, Stacey pays me back in kind by setting the meeting for noon at the most expensive restaurant in town-with lunch bill- able to my expense number, of course.

'What could I do?' she asks as we sit down at the table. 'It was the only time everybody was available, right, Bob?'

'Right,' says Bob.

I'm not mad. Given the quality and quantity of work these people have done recently, I can't complain about picking up the tab for lunch. I get right down to telling everybody what Stacey and I had talked about this morning, and lead up to the other set of benefits.

Part of what Jonah told me last night over the phone had to do with the time a piece of material spends inside a plant. If you consider the total time from the moment the material comes into the plant to the minute it goes out the door as part of a finished product, you can divide that time into four elements.

One of them is setup, the time the part spends waiting for a resource, while the resource is preparing itself to work on the part.

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Another is process time, which is the amount of time the part spends being modified into a new, more valuable form.

A third element is queue time, which is the time the part spends in line for a resource while the resource is busy working on something else ahead of it.