Essay on Operations Analysis The Goal Week 6

Operations Analysis: The Goal
Chapters 26 - 30
Alphonso Grant
Averett University
BSA-523
30 July 2014

The Goal, by Eliyahu Goldratt, demonstrates the theory of constraints (TOC) in an interesting manner. It portrays clearly what the goal of a business is and suggests a number of methods that could be applied in both manufacturing and service companies - methods that are fascinating practical and logical. Throughout the book, especially in chapters 26 - 30, Goldratt raises a number of issues concerning management decisions and key issues that need to be considered. Goldratt emphasizes the fact that the society itself is a source of information where flows and relationships can be applied in the business world, i.e. the hiking experience. Furthermore, it encourages managers to use common sense and always consider alternative ways of doing things. Managers should be able to identify the need for change, know what to change and how to cause the change. Goldratt suggests that conventional approaches are conceptually flawed in that they focus on the “local” instead of the “global” picture. “Tell me how you measure me and I’ll tell you how I behave” to illustrate that by measuring workers through ‘milestones’ motivates them to insert slack time before each ‘milestone’ (Goldratt, 2004). However, some of the illustrated points are contradicting conventional business assumptions. First, the flow should be balanced with demand and not capacity. Secondly, it is the actual constraint of the system that will determine the activity that can generate profit and not individual potential. Thirdly, activating a resource and utilizing is not the same thing. Finally, an hour lost at the bottleneck is an hour lost by the system as a whole when the same thing but for a non-bottleneck is not worth considering (Meredith & Shafer, 2013). As in the Goal, unconventional thinking says, the next logical step is to reduce the batch sizes to reduce the total capital commitment used during production. Reduction in batch sizes also reduces the total time spent in work-in-process. Less time spent in production increases the speed of throughput as well as a faster turn-around on customer orders. Shorter lead times result in better response to the market demands. The four primary time components include: setup time, process time, queue time (associated with bottlenecks where parts wait for a machine to become free), and wait time (associated with non-bottlenecks when a part waits for another part to continue processing). Time saved at a non-bottleneck is imaginary because when non-bottlenecks are being set up, the time spent is taken away from idle time, not production time. Economic batch quantities are calculated based upon the whole system and not the bottlenecks themselves. As a result, most batch sizes are not optimized to the stations most affected by them -- the bottlenecks (Goldratt, 2004). Accepting the above unconventional assumptions can produce a number of conclusions. Money is a more significant issue for management than efficiency. Cost accounting and the conventional way of evaluating inventory costs is an enemy for productivity as a number of cost sources is not considered fully. He therefore suggests that slack time and ‘milestones’ should not be attached to individual activities but rather the project as a whole should be protected through the use of a “buffer” at project level. Goldratt claims that just as there are three mechanisms to add slack time to projects there are three mechanisms to waste the additional time. The author holds that: “A delay in one step is passed, in full, to the next step. An advance made in one step is usually wasted” (Goldratt 2004). Dependencies between project activities cause delays to accumulate whereas even if an activity is finished before or on time the next activity is unlikely to commence until the previously scheduled date (Meredith & Shafer, 2013). There

Show More

Essay about Coleman Managerial Report

Essay on business plan

Managing Strategy And Change

Essay on Hp Case Report - Operations Management

Essay about Bus 599 Week 11 Bus599 Week 11

Strategic Planning Essay

UG Operations 01 Introduction Essay

Circuit Board Fabricators, Inc. Case Analysis Week 3 Essay

Essay on Google Adwords

Essay on Cango Week 2 Video Analysis