moved into a much more influential position.
DW: Still, even with enough time, is it possible for a middle
manager to influence his whole company?
EG: Yes. But of course, such a person will need a lot of stamina and
patience.
DW: What makes you so sure that it is possible at all?
EG: What evidence will convince you that it is possible?
DW: Give me an example of a middle level manager working
for a large company who has succeeded in institutionalizing
the usage of the know-how written in The Goal. I mean institu-
tionalizing it across the board.
EG: Given that General Motors is the largest manufacturing company
in the world, you should get an outstanding proof by interviewing
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Kevin Kohls. (Eli Goldratt interview to be continued.)
Interview with Kevin Kohls General Motors
Director of Throughput Analysis and Simulation for North
American Assembly Plants.
DW: What drove you to seek help from The Goal?
KK: It goes back almost 15 years, when I was starting off as a controls
engineer at the Cadillac Detroit-Hamtramck assembly plant, just re-
turning from Purdue University after completing a masters degree in
electrical engineering. When I left a year and half earlier, the plant
was just starting production. When I returned, they had yet to hit
their production targets; in fact they were far short. As you might
imagine, everyone was frustrated about not hitting these targets, and
there was a lot of effort being expended to improve the system, with
minimal results.
I was frustrated as well. The solutions I was putting in place rarely had
a significant impact on the production of the plant, and it wasn't clear
why. About that same time, Dave VanderVeen from GM Research
made a presentation to Larry Tibbetts, who was then plant manager.
Dave was promoting a research tool that he said would help improve
throughput in the plant. Larry was very impressed, and asked me
to go see Dave to find out if we could use this tool at Hamtramck.
When I went down to the Research Building at the GM Tech Center
in Warren, Dave explained what a bottleneck was and how his tool
identified it. He handed me a copy of The Goal and said if you want to understand bottlenecks and how to improve throughput, this is the
book to read.
I took the book home and started to read it right away. The first thing
that surprised me was that it was written in novel format. The second
was how much I could identify with what was happening in Alex's
plant. I finally had to put it down at 2 A.M. so I could get some sleep,
but I finished it the next day. I wanted to apply the concepts immedi-
ately, so I began collecting data from the systems we had, and putting
it into the bottleneck program. After about a week of effort, I was
fairly
certain I had found the bottleneck. The scary part is that it was not 20
feet away, on the production line right outside my office!
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DW: What was the problem?
KK: It was an operation where they were installing the fuzzy, felt-like
material that goes in the ceiling of the car—very big and very clunky.
Our data said that the mean cycles between failures was about five
minutes, and the mean time to repair was about a minute. I was
amazed that the line was stopping that often, and thought maybe the
data was wrong, so we went and looked for ourselves. Sure enough,
we watched the operator run for five cycles, stop the line, walk away,
pick up five more of these big, bulky items—they weren't heavy but
they were big—drag them back, restart the line, and continue to install
them. Every five cycles she would stop the line. Was it considered
a major problem before we looked at it? No. It's not like we were
losing an hour straight of production because something had broken
down. We were only losing one minute. But it was happening every
five cycles.
We could see immediately why the material wasn't closer to the
line. There was a supervisor's office in the way. We found out there
had been a request made some time ago to move the office, but it
was considered very low priority and it wasn't getting done. So I got
the office moved, and lo and behold, throughput of the entire plant
went up, which was a surprise, because my experience told me that
I couldn't expect that. Then we used the software to find the next
bottleneck and continued on with that process until we were making
our throughput goals very steadily, every day. That was a real change
in the way that plant operated.
DW: Did you take your insights to other GM plants?
KK: Yes. We demonstrated the process when central office manage-
ment visited the plant, and it became apparent a lot of plants in GM
weren't hitting their throughput targets. Eventually, I left Detroit-
Hamtramck and went to a central office position to help start a divi-
sional group to implement this solution. Seventeen years later, I'm an
executive at GM who owns the process for all of the North American
plants, and it has been expanded to include the simulation of future
manufacturing designs.
DW: And this is all TOC related?
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KK: Yes, but there are other disciplines involved. You have to un-
derstand simulation, and how it predicts throughput, and why it's
important to understand where the bottleneck will be for a future
design. But TOC is the basis for what we do. I still teach a two-day
course. We might go to a plant and train the whole staff in how to
use TOC concepts. I always give out copies of The Goal ahead of time and ask them to read it before the training. It's gotten to the point in
manufacturing, however, where there are not that many people left to
go through the training. My internal customers are usually very savvy
now about TOC, bottlenecks, data collection and analysis. So I rarely
have to sell the concept anymore. Demand for data collection imple-
mentation to drive the bottleneck software, for example, exceeds our
ability to install. And while I'm responsible for GM North America,
this week alone I have people in China and in Europe working on
these kinds of issues.
DW: How has your use of TOC concepts changed over the
years?
KK: What we found when we first started out is that we were dealing
with the low-hanging fruit. You look at that first example I told you
about, and it was very obvious that the office was in the way, and the
solution was just to move it. Over time, the solutions to the problems
have become a lot more difficult to find. This doesn't mean you can't
solve them, it just means you might have to use more scientific tech-
niques. Now I might have to apply st
atistical methods as opposed to
simple observation to understand what's driving the problem at a
work station.
Another thing we're doing lately is applying what we've learned from
The Goal to the design of new plants and production lines. In -effect, we're solving problems before they arise. Eli Goldratt hasn't spent
a lot of time talking about using TOC in that way, but we've taken
his concepts and adopted them to our needs. That's been the beauty
of it for me. If you understand the logic and the reason behind the
methodology, then you can apply that stuff continuously.
DW: It's interesting that a way of thinking about production
problems that you found useful 15 years ago you still find useful
today. Does that surprise you?
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KK: Yes and no. The Theory of Constraints is a very scientific, logical
process. And because of that, when the game changes you can always
go back to the logic. Originally we just had to find the bottleneck,
walk out there, ask three or four questions, and we knew what to go
and do. Now we can change the way we design whole manufactur-
ing processes to make sure they're better from the start. But the logic
behind TO C—the conflict clouds, the current reality trees, the way we
ask questions to uncover the constraint—all that still applies.
I think the problem with too many other approaches is that once the
first layer of problems goes away, and the crisis no longer exists, then
it's, "Phew! We're done!" In the TOC world, you find yourself asking,
"Where has the constraint gone, and what can I do to help break it?"
So you're never done.
I'd like to be able to tell you that as soon as I started telling people
about these concepts, the whole organization immediately changed to
the new paradigm. The fact is that it has taken years to get the process
going, and the leverage to make improvements is still significant, es-
pecially in a company as large as General Motors. It's much like the
flywheel concept discussed in Good to Great, by Jim Collins. It's taken a while to get the flywheel turning, but it's starting to go at a pretty
good clip right now!
Interview with Eli Goldratt continued...
DW: At Dow Corning it took about 5 years for TOC to spread
from one section to a whole business unit In General Motors
it took over ten years to be institutionalized throughout North
America. Does it always take years to spread from the origin
to the whole company?
EG: Not necessarily. It depends on who took the initiative. If the ini-
tiative was taken by a middle level manager, it naturally takes much
longer compared to the many cases where the initiative was taken by
a top manager. What is amazing is that the complexity of the organiza-
tion is playing almost no role. In very large and complex organizations
it takes TOC about the same time to become the dominant culture as
it takes in small, relatively simple organizations.
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DW: Can you give an example?
EG: In order to prove my point let's take an extreme example. An
example of an operation that is not only large and complex but also
dominated by large uncertainties - a repair depot of the United States
Marine Corps. This depot is overhauling helicopters. It's very large
- several thousand people. It is very complex - the helicopters are
disassembled to the smallest pieces. Even the paint is sandblasted
off. Whatever has to be repaired is repaired. Whatever has to be
replaced is replaced. And then you reassemble the whole airplane.
One has to make sure that certain parts which were taken from the
original airplane go back on the same airplane. What makes it even
more complex is the fact that two intrinsically different modes of
operation have to be synchronized. The disassembly/assembly lines
are a multi-project environment. The repair shops that feed the lines
are a production environment, and the two must work in tandem.
The real challenge is the fact that the whole operation is dominated
by high uncertainty - one doesn't know the content of the work until
the helicopter is disassembled and inspected. Surprises all over the
place. A real nightmare. Still, it took the commander less than a year
to implement TOC. An implementation that was so solid that the
process of on-going improvement continues with his successors.
Interview with Robert Leavitt, Colonel,
United States Marine Corps retired.
Manager, Sierra Management Technologies
DW: You were responsible for implementing a TOC-based
program in the Marine Corps?
RL: Yes, when I was commanding officer at the Naval Air Depot in
Cherry Point, North Carolina. I started the implementation there,
which they have continued. As a colonel I had in essence a $625
million company and 4,000 people working for me. Everybody says
the government is always the last to get the message. I don't know if
that's true. My personal belief is that the government gives guys like
me the opportunity to try things a little differently.
DW: Tell us about your implementation.
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RL: We had problems delivering H-46s on time. The H-46 is a 25-to
30-year-old Boeing helicopter used extensively in the Marine Corps
as part of their assault support role. Because the airplane is so old and
in frequent need of maintenance, anything over a single-digit number
of airplanes on our hangar deck meant that you took a shadow off
the flightline. If you took a shadow off the flightline, that meant they
didn't have an airplane to do their mission. Our negotiated norm for
turnaround time was 130 days, and on average we were somewhere
between 190 and 205 days.
DW: Sounds like you had a problem.
RL: A problem, yes. So we implemented critical chain, and ultimately
cut the number of airplanes in flow from 28 to 14. We were able to
sell that to our customers. And the turnaround time went from 200
days to about 135. Now that in and of itself is probably a significant
improvement. But at the same time we were starting the process, they
added 30 days more worth of corrosion work to be done to the cabin.
We accommodated the 30 days within that 135-day delivery. So we
went from what would have been about 230 or 240 days to 135.
DW: Why did this approach work where others had failed?
RL: We had looked at a lot of the project management solutions,
including material resource planning (MRP). TOC was the one that
worked from all dimensions; building teamwork, understanding vari-
ability, and with a grounding in scientific thought. It was a holistic
approach to solving the problems. It looked at the entire system and
said, hey, once you find the key leverage point you'll get some sig-
&n
bsp; nificant returns. And then you can go back and find the next leverage
point, or constraint.
DW: Did it take you a long time to find the constraint?
RL: No, it didn't. And within about 120 days we were already begin-
ning to see the results.
DW: What was the constraint that you found?
RL: It was the schedule—the way the schedule was developed. The
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biggest thing was the way we applied available resources; it didn't
make any sense. The estimators and evaluators really had about two
days worth of work and they were taking about 14. We figured out
what was going on—why that was a problem, why the scheduler set
that up—and then reorganized.
DW: Bottom line?
RL: Well, the way it worked with the government, we were funded
for a certain number of airplanes each year. We started burning
through the backlog and we actually produced a few extra airplanes.
I know from talking to the new commanding officer down there that
they've increased the amount of product every year as they've gone
forward.
DW: And you had another example?
RL: I also implemented TOC in the tail rotor blade cell at Sikorsky
Aircraft, the overhaul and repair division. We were averaging some-
where between 15 and 19 tail rotor blades a month. It took us about
73 days to finish a tail rotor blade and we had as many as 75 or 80 tail
rotor blades in flow. Well, we changed the flow to more than 30 tail
rotor blades in process, which means our turnaround time actually
was about 28 days.
DW: How quickly did this improvement occur?
RL: Three months. Now you can understand why I'm trying to build
a consulting practice around TOC.
Interview with Eli Goldratt continued...
DW: I'd say almost everybody I've talked to who has read The
Goal agrees with its messages. It also seems clear that many
readers believe TOC to be founded on solid common sense.
So why doesn't everybody implement TOC right away? Is it
because TOC demands that cost accounting be discarded? Do
the financial managers block the implementations?
EG: Not at all. The notion that financial managers try to protect cost
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