The Goal Summary

The Goal
1. Alex learned that the measures he was using to gauge his plants efficiency may not actually be telling him whether or not his plant is producing efficiently. His plant has the same number of workers, his inventories increased, and he has not been able to ship more products since the introduction of super efficient robots. All of these facts help Alex realizes that his measures for productivity and efficiency don’t really tell him how efficient his plant is. He also realizes that he doesn’t know the goal of his plant.

2. Alex confirms that the ultimate goal of a manufacturing organization is to make money. He also learns that at the plant level there are no measurements in place to help him gauge how he is helping the company make money. Jonah tells him that there are 3 basic factors that he must pay attention to: Inventories, Throughput, and Operating Expense. Everything in his plant will fall under one of these categories and will help his organization achieve the goal. Alex now has to figure out how these 3 measurements apply to the daily activities that happen in his plant.

3. Alex learns that he needs to stop focusing on the robots in their plants; his constant struggle for high efficiencies is actually counterproductive in trying to reach the goal. Jonah explains that a plant with everyone working is actually inefficient because they end up with an excess of inventories and manpower. The answer Alex is looking for lies in managing the capacity and aiming to have a balanced plant. Alex should be aiming to reduce operating expenses and decease inventories, but he also needs to increase the throughput. Alex needs to figure out how the two statistical phenomena of dependent events and statistical fluctuations are the key to achieving his goal.

4. Alex and his team get stumped again on how to keep pushing towards their goal, so they call Jonah. Alex had a revelation and understands that he needs to optimize the system as a whole, and not as individual components, but Jonah pushes that idea further. Alex and his team need to determine whether parts of the system are bottlenecks or non-bottlenecks, and from there, they will see more implications. Jonah emphasizes that Alex needs to balance the flow of product with market demand, not capacity. Alex learns that he should set his flow to a little bit less than demand. In order to start into this, Alex needs to determine his bottlenecks.

5. Upon Jonah’s visit to the plant, Alex and his group ultimately learn that the capacity of their plant is determined by the capacity of the bottleneck machines. They were unsure of how to increase their capacity after having identified the bottlenecks. The first thing Jonah points out that they must change is to keep the bottlenecks operating at all times. Losing an hour of operation time on a bottleneck machine equates to the throughput of the entire plant being decreased by an hour. They also learn that to decrease the demand on the bottlenecks, they can outsource the parts to outside vendors or bring in old machines which will help to work on the bottleneck parts. This would ease the load on the bottlenecks and decrease the inventory that has piled up in front of them. It is unnecessary to have the bottleneck machines working on parts that will only sit in further inventory or as spare parts, so bottleneck should only work on parts needed currently. Lastly, they learn to place quality control before the bottlenecks so that bottlenecks time is only spent on manufacturing parts that help increase throughput of the plant, and no time is lost working on parts that are already defective.

6. When Jonah visits the plant for the second time, Stacey believes that the problem is they have more than one bottleneck or have a new bottleneck. However, Jonah explains to them that the problem is not that they’ve created a new bottleneck, they are running the non-bottlenecks at full capacity when they should only be used

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