capacity that it takes an enormous increase in throughput before
this happens. We've only had a twenty percent increase. When I
had talked to him by phone, he thought it unlikely a new bottle-
neck would have occurred.
What happened was that even as throughput increased, we
continued loading the plant with inventory as if we expected to
keep all our workers fully activated. This increased the load
dumped upon the milling machines and pushed them beyond
their capacity. The first-priority, red-tagged parts were pro-
cessed, but the green-tagged parts piled up. So not only did we
get excess inventory at the NCX-10 and at heat-treat, but due to
the volume of bottleneck parts, we clogged the flow at another
work center and prevented non-bottleneck parts from reaching
assembly.
When he's finished, I say, "All right, I see now the error of
E.M. Goldratt
The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
218
our ways . Can you tell us what we should do to correct the prob-
lem?"
"I want you all to think about it as we walk back to your
conference room and then we'll talk about what you should do,"
says Jonah. "The solution is fairly simple."
E.M. Goldratt
The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
219
26
Just how simple the solution is doesn't become apparent to
me until I'm home that night. I'm sitting at the kitchen table with
a pad of paper and a pencil thinking about what was suggested
today when Sharon comes in.
"Hi," she says as she sits down.
"Hi," I say back. "What's up?"
"Not much," she says. "Just wondered what you were do-
ing."
"I'm working," I tell her.
"Can I help?" she asks.
"Well ... I don't know," I say. "It's kind of technical. I
think you'll probably be bored by it."
"Oh," she says. "Does that mean you want me to leave?"
Guilt strikes.
"No, not if you want to stay," I tell her. "Do you want to try to solve a problem?"
"Okay," she says, brightening.
I say, "All right. Let me think of how to put this to you. Do
you know about the scout hike Dave and I were on?"
"She doesn't, but I do!" says Dave, racing into the kitchen.
He skids to a stop on the smooth floor and says, "Sharon doesn't
know anything about the hike. But I can help you."
I say, "Son, I think there is a career for you in sales."
Sharon indignantly says, "Yes, I d o know about the hike."
"You weren't even there," says Dave.
"I've heard everybody talk about it," she says.
"Okay, b o th of you can work on this," I say. "Here's the problem: We've got a line of kids on a hike in the woods. In the
middle of the line, we've got Herbie. We've already taken the
pack off Herbie's back to help him go faster, but he's still the
slowest. Everybody wants to go faster than Herbie. But if that
happens, the line will spread out and some of the kids will get
lost. For one reason or another, we can't move Herbie from the
middle of the line. Now, how do we keep the line from spread-
ing?"
They both become thoughtful.
E.M. Goldratt
The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
220
I say, "All right, now both of you go into the other room. I'll
give you ten minutes, and then we'll see which one of you comes
up with the best idea to keep everyone together in the line."
"What does the winner get?" asks Dave.
"Well . . . anything within reason."
"Anything?" asks Sharon.
"Within reason," I repeat.
So they leave and I get about ten minutes of peace and quiet.
Then I see the two faces looking around the corner.
"Ready?" I ask.
They come in and sit down at the kitchen table with me.
"Want to hear my idea?" asks Sharon.
"My idea is better," says Dave.
"It is not!" she tells him.
"Okay, enough!" I say. "What's your idea, Sharon?"
Sharon says, "A drummer."
"Pardon me?"
"You know . . . like in a parade," she says.
"Oh, I know what you mean," I say, realizing what she has in
mind. "There aren't any gaps in a parade. Everybody is marching
in step."
Sharon beams. Dave gives her a dirty look.
"So everybody's marching in step ... to a beat," I say,
thinking out loud. "Sure. But how do you keep the people in
front of Herbie from setting a faster pace?"
"You have Herbie beat the drum," says Sharon.
I think about it and say, "Yeah, that's not bad."
"But my idea is better," says Dave.
I turn to him. "Okay, wise guy, what's your idea?"
"Tie ropes to everyone," says Dave.
"Ropes?"
"You know, like mountain climbers," he says. "You tie everyone together at the waist with one long rope. So, that way, no one
could get left behind, and nobody could speed up without every-
body speeding up."
I say, "Hmmm . . . that's very good."
It would mean that the line—which would translate to the
total inventory in the plant—could never be longer than the
rope. And the rope, of course, could be of a pre-determined
length, which means we could control it with precision. Everyone
E.M. Goldratt
The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
221
would have to walk at the same speed . I look at Dave, a little in awe of his creativity.
"Come to think of it, the rope makes it sound like having
physical links between all the equipment," I tell him, "which is like an assembly line."
"Yeah, an assembly line," says Dave. "Didn't you tell me once that an assembly line is supposed to be the best way to make
things?"
"Well, yes, it's the most efficient way to manufacture," I say.
"In fact, we use that approach when we do the final assembly for
most of our products. The problem is that an assembly line won't
work throughout the whole plant."
"Oh," says Dave.
"But those are both good ideas you two thought up," I tell
them. "In fact, if we changed each of your ideas just a little bit
we'd almost have the solution suggested to us today."
"Like how?" asks Sharon.
"See, to keep the line from spreading, it actually wouldn't be
necessary to keep everyone marching to exactly the same step or
to keep everyone tied to the rope," I tell them. "What we really have to do is just keep the kid at the front of the line from walking faster than Herbie. If we can do that, then everybody will stay
together."
"So we just tie the rope from Herbie to the kid at the front,"
says Dave.
"Or, maybe Herbie and the boy at the front of the line have
signals," says Sharon. "When the boy in front goes too fast,
Herbie tells him to wait or slow down."
"That's right," I say. "Both of you figured it out."
"So what do we both win?" asks Sharon.
"What do you
want?" I ask. "A pizza with everything? A
night at the movies?"
They're quiet for a moment.
"The movies sound good," says Sharon, "but what I'd really
like is if you could get Mom to come home again."
Now it gets very quiet.
Dave says finally, "But if you can't, we'll understand."
"Well, I'm doing my best," I say. "Meanwhile, how about the movies?"
After the kids have gone to bed, I sit up wondering for the
hundredth time whether Julie will come back. Compared with
E.M. Goldratt
The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
222
my marital difficulties, the inventory problem at the plant seems
simple—or at least it seems simple now. I guess every problem is
easy once you've figured it out.
We are, in effect, going to do what my two kids came up with.
The Herbies (the bottlenecks) are going to tell us when to let
more inventory into the system—except we're going to use the
aid of computers instead of drums and ropes.
After we returned to the conference room in the office build-
ing today, we started talking, and we all agreed that we're obvi-
ously releasing too much material. We don't need five or six
weeks of inventory in front of the bottleneck to keep it produc-
tive.
"If we can withhold materials for red parts, instead of push-
ing them out there as soon as the first non-bottleneck has nothing
to do," said Stacey, "the milling machines will then have time to work on the green parts. And the parts we're missing will reach
assembly with no problem."
Jonah nodded and said, "That's right. What you have to do
is find a way to release the material for the red parts according to
the rate at which the bottlenecks need material—and strictly at
that rate."
Then I said, "Fine, but how do we time each release of mate-
rial so it arrives at the bottleneck when it's needed?"
Stacey said, "I'm not sure, but I see what you're worried
about. We don't want the opposite problem of no work in front of
the bottleneck."
"Hell, we got at least a month before that happens, even if
we released no more red tags from today on," said Bob. "But I
know what you mean. If we idle the bottleneck, we lose
throughput."
"What we need," I said, "is some kind of signal to link the bottlenecks with the release-of-materials schedule."
Then Ralph, to my surprise, spoke up and said, "Excuse me,
this is just a thought. But maybe we can predict when to release
material by some kind of system based on the data we've kept on
both the bottlenecks."
I asked him what he was getting at.
He said, "Well, since we started keeping data on the bottle-
necks, I've been noticing I'm able to predict several weeks in
advance what each bottleneck will be working on at a particular
time. See, as long as I know exactly what's in queue, I just take
E.M. Goldratt
The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
223
the average setup and process times for each type of part, and
I'm able to calculate when each batch should clear the bottleneck.
Because we're only dealing with one work center, with much less
dependency, we can average the statistical fluctuations and get a
better degree of accuracy."
Ralph went on to say that he knows from observation it takes
about two weeks, plus or minus a day or two, for material to
reach the bottlenecks from the first operations.
"So by adding two weeks to the setup and process times of
what's in queue at the bottleneck," said Ralph, "I know how long it will take until the bottleneck is actually working on material we
release. And as each batch leaves the bottleneck, we can update
our information and calculate a date when Stacey should release
more red-tag material."
Jonah looked at Ralph and said, "that's excellent!"
"Ralph," I said, "that's terrific. How accurate do you really think we can be with this?"
"I'd say we'd be accurate to within plus or minus a day," he
said. "So if we keep, say, a three-day stock of work-in-process in
front of each bottleneck, we should be safe."
Everyone was telling Ralph how impressed they were when
Jonah said, "But, in fact, Ralph, you can do much more than that
with the same information."
"Like what?" asked Ralph.
Jonah said, "You can also attack the inventory problems in
front of assembly."
"You mean we not only can do something about excess in-
ventory on the bottleneck parts, but on the non-bottleneck parts
as well?" I asked.
"Exactly," said Jonah.
But Ralph said, "Sorry, folks, I'm not sure how I'd do that."
Then Jonah explained it to him—and all of us. If Ralph can
determine a schedule for releasing red-tag materials based on the
bottlenecks, he can also determine a schedule for final assembly.
Once he knows when the bottleneck parts will reach final assem-
bly, he can calculate backwards and determine the release of the
non-bottleneck materials along each of their routes. In this way,
the bottlenecks will be determining the release of all the materials
in the plant.
I said, "You know, that's going to produce the same effect as
E.M. Goldratt
The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
224
moving the bottlenecks to the head of production, which is what
I'd intended for us to do."
"Yeah, it sounds good," said Ralph. "But I have to warn you, I can't say how long it'll take before I can do all that. I mean, I can
have schedule for the red-tagged materials worked out in a fairly
short order. The rest of it will take awhile."
"Aw, come on, Ralphie," said Bob, "a computer wiz like you
ought to be able to crank that out in no time."
"I can crank something out in no time," said Ralph, "but I'm not going to promise it'll work."
I told him, "Relax; as long as we ease the load on the milling
machines, we'll be okay for the short haul. That'll give you the
time to get something basic in place."
"You may feel you have the time now to relax," said Jonah,
"but I have to catch a plane for Chicago in thirty-five minutes."
"Oh, shit," I muttered, automatically glancing at my watch.
"I guess we'd better move."
It was not a graceful parting. Jonah and I ran out of the
building, and I broke numerous speed limits—without incident—
getting him to the airport.
"I have, shall we say, a special interest in plants like yours,"
said Jonah. "So I'd appreciate it if you'd keep me informed of
what happens."
"Sure," I told him. "No problem. In fact, I'd planned on it."
"Good," said Jonah. "I'll be talking to you."
And with that he was out of the car and, with a wave, was
sprinting through the terminal doors. I didn't get a call, so I
suppose he made it.
When I go to work the next morning, we have a meeting
about how to implement th
is approach. But before we can get
down to talking about it, Bob Donovan starts waving a red flag at
us.
"You know, we could be walking into a big problem," says
Bob.
"What's that?" I ask.
"What happens if efficiencies all over the plant go down?" he
asks.
I say, "Well, I think that's a risk we'll have to take."
E.M. Goldratt
The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
225
"Yeah, but it sounds like we're going to have a lot of people
idle around here if we do this," says Bob .
"Yeah, we might have some people idle from time to time," I
admit.
"So are we just supposed to let everyone stand around out
there?" asks Bob.
"Why not?" asks Stacey. "Once the somebody is already on
the payroll, it doesn't cost us any more to have him be idle.
Whether somebody produces parts or waits a few minutes doesn't
increase our operating expense. But excess inventory . . . now
that ties up a lot of money."
"Okay," says Bob, "but what about the reporting system?
Seems to me that at the end of the month, when old Bill Peach is
ready to decide if we stay open or if we close down, he's not going
to be awfully positive about us if he sees our efficiencies have
taken a dive. I hear they do tend to frown upon that at headquar-
ters."
There is quiet in the room. Then Lou says, "He does have a
point, Al."
I listen to the hum of the air conditioning for a moment.
"All right, look," I say finally. "If we don't go ahead with a system to withhold inventory and release it according to the bottlenecks, we'll be missing a major opportunity to improve perfor-
mance and save the plant. And I'm not about to stand by and let
that happen just to maintain a standard that obviously has more
impact on middle management politics than it does on the bot-
tom line. I say we go ahead with this. And if efficiencies drop, let
them."
After those brave words, so reminiscent of Admiral Farragut
and his Damn-the-Torpedoes speech, the others are a little misty-
eyed.
"And, ah, Bob," I tell Donovan, "if there is a lot of idle time out there, don't hassle anybody—just make damn sure it doesn't
show up in the efficiency reports next month, okay?"
"Gotcha, boss."
E.M. Goldratt
The Goal: A Process of Ongoing Improvement
Captured by Plamen T.
The Goal: A Process of Ongoing Improvement, Third Revised Edition Page 29