The Goal Discussion Questions & Answers Chapters 1-25

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- At one point during the hiking tour, the tour guide admonished the troops: “Now listen up! ……….Nobody passes anybody. Everybody just tries to keep with the person in front of him. Herbie will lead”. This announcement by the tour guide confounded everyone since Herbie was the slowest member of the group. Explain how Herbie affected the hiking time of the group? Considering this effect, was the tour guide’s directive misguided? Explain.

When Herbie was the last in line there were constant gaps that had to be made up. When Herbie was moved to the front of the line, the gaps disappeared, but then everyone started complaining that the line was moving too slow. It wasn’t until they realized that Herbie had packed more supplies than everyone else, some of which were extremely heavy items like cans of food, a skillet and tent stakes.

If you look at the Herbie as a bottleneck, the Tour Guide’s direction was accurate. True bottlenecks are any resource whose capacity is equal to or less than the demand placed upon it. And a non-bottleneck is any resource whose capacity is greater than the demand placed on it. Bottlenecks are not necessarily bad - or good, they are simply a reality and must be evaluated to determine if they help or hinder overall system throughput. The capacity of the activity (whether it is plant activity or a hike) is equal to the capacity of its bottlenecks. By changing the line formation of the hikers, its effect on the others lead to the discovery that Herbie had too much in his back which was slowing him down. Distributing the contents of back pack equally distributed the weight and everyone was then moving at the same speed. This not only quickened the hike, it also prevented the gaps in between hikers. As Goldratt states, “Inventory is down. Throughput is up.”

- What is a bottleneck? Discuss how a non-bottleneck can become a bottleneck.

A bottleneck is a phenomenon where the performance or capacity of an entire system is limited by a single or limited number of components or resources. A non-bottleneck is any resource whose capacity is greater than the demand placed upon it. It is important to balance flow, not capacity in relation to demand. If bottleneck capacity is kept equal to demand, and demand drops, costs will go up resulting in a loss of money. The objective is to maintain capacity at slightly less than demand. Total plant capacity equals the bottleneck capacity. Bottlenecks should be optimized by eliminating time wasted through idle bottleneck time, processing defective parts, or producing parts which do not contribute to throughput.

- “Excuse me, but I thought bottlenecks were bad”, says Bob. “They ought to be eliminated where possible” (page 139). Are bottlenecks necessarily bad? Discuss different strategies for minimizing the adverse impact of a bottleneck station in a multi-stage service operation.

Suppose there are three business units working together to create a horizontal value chain. If Business Unit A becomes more efficient (e.g., reducing its cycle time from 5 seconds to 2 seconds), it may actually be detrimental to the overall process. Yet quite often, Business Unit A’s improvements will be rewarded since there is a tendency to measure results vertically in silos. Additionally sometimes the work that an entity does is non-value-added.

- Jonah argues that increasing the capacity of the plant does not require increasing capacity from one end of the plant to the other; rather it requires increasing the capacity only at the bottlenecks (Chapter 19). Do you agree? Explain.

Jonah tells Alex that a plant without bottlenecks would have enormous excess capacity. Every plant should have bottlenecks. Alex is confused. What is needed is to increase the capacity of the plant? The answer is more capacity at the bottlenecks. More machines to do the bottleneck operations might help, but how about making them run more effectively. Jonah tells them that they have hidden capacity because some of their thinking is incorrect. Some ways to increase capacity at the bottlenecks are not to have any down time within the bottlenecks, make sure they are only working on quality products so not to waste time, and relieve the workload by farming some work out to vendors. Jonah wants to know how much it cost when the bottlenecks (X and heat treat) machines are down. Lou says $32 per hour for the X machine and $21 per hour for heat treat. How much when the whole plant is down? Around $1.6 million. How many hours are available per month? About 585. After a calculation, Jonah explains that when the bottlenecks are down for an hour, the true cost is around $2,735, the cost of the entire system. Every minute of downtime at a bottleneck translates into thousands of dollars of loss throughput, because without the parts from the bottleneck, you can’t sell the product. Therefore, you cannot generate throughput.

- Alex was considering reducing the efficiency of some operations in order to make the entire plant more productive (Chapter 23). Does this strategy make sense? Explain.

I believe this strategy makes sense. They are becoming more and more efficient, but lag time arouses with the two bottlenecks because of workers being loaned out to other areas and not being at the bottlenecks when needed to process another order. It seems there was nothing to do while waiting for the bottleneck machine to finish the batch. Therefore, in keeping with the notion that everybody needs to stay busy, workers were at other areas between batches. Alex decides to dedicate a foreman at each location all the time. Then one of those dedicated foreman, the night foreman, discovers a way to process more parts by mixing and matching orders by priority, increasing efficiency by ten percent. Finally, one process being sent through a bottleneck could be accomplished through another older way and therefore free up time on the bottleneck.

- Identify the interventions that Alex Rogo’s plant introduced to eliminate bottlenecks (Chapter 24). As steps were taken to remove or reduce some bottlenecks new ones were created. Discuss how the use of the priority system contributed to this situation?

Some of the inventions that were put in place were Q.C. in front of the bottlenecks, training people to give special care to bottleneck parts, activating the three machines to supplement the NCX-10, the new lunch rules, assigning certain people to work only at bottlenecks, increasing the batch sizes going into heat treat, and implementing the new priority system in the plant. The priority system used colored tags to determine what parts should be worked first. When the highest priority colored tags (red) keep piling in, it left

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