The Goal: A Process of Ongoing Improvement, Third Revised Edition
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we've been living together for fifteen years and we have no clear
understanding of what our marriage is supposed to do ... or
become ... or anything!" I sputter. "We're just coasting along,
doing 'what everyone else does.' And it turns out the two of us
have some very different assumptions of what our lives are sup-
posed to be like."
"My parents have been married for thirty-seven years," she
says, "and they never asked any questions. Nobody ever asks
'What is the goal of a marriage?' People just get married because
they're in love."
"Oh. Well, that explains everything, doesn't it," I say.
"Al, please don't ask these questions," she says. "They don't have any answers. And if we keep talking this way, we're going to
ruin everything. If this is your way of saying you're having second
thoughts about us—"
"Julie, I'm not having second thoughts about you. But you're
the one who can't figure out what's wrong with us. Maybe if you
tried to think about this logically instead of simply comparing us
to the characters in a romance novel—"
"I do not read romance novels," she says.
"Then where did you get your ideas about how a marriage is
supposed to be?" I ask her.
She says nothing.
"All I'm saying is we ought to throw away for the moment all
the pre-conceptions we have about our marriage, and just take a
look at how we are right now," I tell her. "Then we ought to
figure out what we want to have happen and go in that direc-
tion."
But Julie doesn't seem to be listening. She stands up.
"I think it's time we walked back," she says.
On the way back to the Barnett house, we're as silent as two
icebergs in January, the two of us drifting together. I look at one
side of the street; Julie looks at the opposite. When we walk
through the door, Mrs. Barnett invites me to stay for dinner, but
I say I've got to be going. I say goodbye to the kids, give Julie a
wave and leave.
I'm getting into the Mazda when I hear her come running
after me.
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"Will I see you again on Saturday?" she asks.
I smile a little "Yeah, sure. Sounds good."
She says, "I'm sorry about what happened."
"I guess we'll just have to keep trying until we get it right."
We both start smiling. Then we do some of that nice stuff
that makes an argument almost worth the agony.
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The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
235
28
I get home just as the sun is starting to set. The sky is rosy
pink. As I'm unlocking the kitchen door, I hear the phone ring-
ing inside. I rush in to grab it.
"Good morning," says Jonah.
"Morning?" Outside the window, the sun is almost below the
horizon. I laugh. "I'm watching the sun set. Where are you calling from?"
"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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The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
237
; 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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The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
238
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.
The fourth element is wait time, which is the time the part
waits, not for a resource, but for another part so they can be
assembled together.
As Jonah pointed out last night, setup and process are a
small portion of the total elapsed time for any part. But queue
and wait often consume large amounts of time—in fact, the ma-
jority of the elapsed total that the part spends inside the plant.
For parts that are going through bottlenecks, queue is the
dominant portion. The part is stuck in front of the bottleneck for
a long time. For parts that are only going through non-bottlenecks,
wait is dominant, because they are waiting in front of assembly for
parts that are coming from the bottlenecks. Which means that in
each case, the bottlenecks are what dictate this elapsed time.
Which, in turn, means the bottlenecks dictate inventory as well as
throughput.
We have been setting batch sizes according to an economical
batch quantity (or EBQ) formula. Last night, Jonah told me that
although he didn't have time over the phone to go into all the
reasons, EBQ has a number of flawed assumptions underlying it.
Instead, he asked me to consider what would happen if we cut
batch sizes by half from their present quantities.
If we reduce batch sizes by half, we also reduce by half the
time it will take to process a batch. That means we reduce queue
and wait by half as well. Reduce those by half, and we reduce by
about half the total time parts spend in the plant. Reduce the
time parts spend in the plant, and. . . .
"Our total lead time condenses," I explain. "And with less
time spent sitting in a pile, the speed of the flow of parts in-
creases."
"And with faster turn-around on orders, customers get their
orders faster," says Lou.
"Not only that," says Stacey, "but with shorter lead times we can respond faster."
"That's right!" I say. "If we can respond to the market faster, we get an advantage in the marketplace."
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"That means more customers come to us because we can
deliver faster," says Lou.
"Our sales increase!" I say.
"And so do our bonuses!" says Stacey.
"Whoa! Whoa now! Hold up here a minute!" says Bob.
"What's the matter?" I ask him.
"What about setup time?" he says. "You can batch sizes in
half, you double the number of setups. What about direct labor?
We got to save on setups to keep down costs."
"Okay, I knew this would come up," I tell them. "Now look,
it's time we think about this carefully. Jonah told me last night
that there was a corresponding rule to the one about an hour lost
at a bottleneck. You remember that? An hour lost at a bottleneck
is an hour lost for the entire system."
"Yeah, I remember," Bob says.
I say, "The rule he gave me last night is that an hour saved at a non-bottleneck is a mirage."
"A mirage!" he says. "What do you mean, an hour saved at a non-bottleneck is a mirage? An hour saved is an hour saved!"
"No, it isn't," I tell him. "Since we began withholding materials from the floor until the bottlenecks are ready for them, the
non-bottlenecks now have idle time. It's perfectly okay to have
more setups on non-bottlenecks, because all we're doing is cut-
ting into time the machines would spend being idle. Saving set-
ups at a non-bottleneck doesn't make the system one bit more
productive. The time and money saved is an illusion. Even if we
double the number of setups, it won't consume all the idle time."
"Okay, okay," says Bob. "I guess I can see what you mean."
"Now Jonah said, first of all, to cut the batch sizes in half.
Then he suggested I go immediately to marketing and convince
them to conduct a new campaign which will promise customers
earlier deliveries."
"Can we do it?" asks Lou.
I tell them, "Already, our lead times have condensed consid-
erably over what they were before thanks to the priority system
and making the bottlenecks more productive. We have reduced
lead time of about three to four months down to two months or
even less. If we cut our batch sizes in half, how fast do you think
we can respond?"
There is an eternity of hemming and hawing while this is
debated.
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Captured by Plamen T.
240
Finally, Bob admits, "Okay, if we cut batch sizes in half, then
that means it ought to take half the time it does now. So instead of
six to eight
weeks, it should take about four weeks . . . maybe
even three weeks in a lot of cases."
"Suppose I go to marketing and tell them to promise cus-
tomers deliveries in three weeks?" I say.
"Whoa! Hold on!" says Bob.
"Yeah, give us a break!" says Stacey.
"All right, four weeks then," I say. "That's reasonable, isn't it?"
"Sounds reasonable to me," says Ralph.
"Well . . . okay," says Stacey.
"I think we should risk it," says Lou.
"So are you willing to commit to this with us?" I ask Bob.
Bob sits back and says, "Well . . . I'm all for bigger bonuses.
What the hell. Let's try it."
Friday morning finds the Mazda and me again hustling up
the Interstate toward headquarters. I hit town just as the sun hits
the glass of the UniCo building and reflects a blinding glare.
Kind of pretty actually. For a moment, it takes my mind off my
nerves. I've got a meeting scheduled with Johnny Jons in his
office. When I called, he was quite willing to see me, but sounded
less than enthusiastic about what I said I'd like to talk about. I feel
there's a lot riding on my ability to convince him to go along with
what we want to do. So I've found myself biting a fingernail or
two during the trip.
Jons doesn't really have a desk in his office. He has a sheet of
glass on chrome legs. I guess that's so that everyone can get a
good look at his Gucci loafers and silk socks—which he exposes as
he leans back in this chair, interweaves his fingers and puts them
behind his head.
He says, "So . . . how is everything going?"
"Everything is going very well right now," I say. "In fact, that's why I wanted to talk to you."
Jons immediately dons an impassive face.
"All right, listen," I tell him, "I'm going to lay my cards out for you. I'm not exaggerating when I say everything is going well.
It is. We've worked off our backlog of overdue orders, as you
know. At the beginning of last week, the plant began producing
strictly to meet projected due dates."
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Captured by Plamen T.
241
Jons nods and says, "Yes, I've noticed my phone hasn't been
ringing lately with complaints from customers missing their or-
ders."
"My point," I tell him, "is that we've really turned the plant around. Here, look at this."
From my breifcase, I take the latest list of customer orders.