“The Goal” by Goldratt is a book about the Theory of Constraints, TOC. It is about the behavior of manufacturing facilities. It deals with bottlenecks that are the manufacturing constraints and the variability that creates them. The book states that a manufacturing organization cannot run at 100% and that you cannot balance the assembly line. It seems that your efforts for efficiency must be focused on the worst bottleneck. The loss caused by a bottleneck is a loss for the entire system. Focusing on improving the throughput of the bottleneck increases the flow for the entire manufacturing line. If there is a bottleneck, then all other areas are capable of excess capacity. Don’t try to improve non-bottlenecks, as it is a waste of time and effort. The TOC integrates into Total Quality Management, TQM, except for one main theory. TQM supports continuous improvement of the system while the TOC does not support continuous improvement of every process. The TOC says that we must focus on the constraint.
Q: What is the Theory of Constraints about?
A: Developed by Dr. Eliyahu M. Goldratt, TOC states that any system has at least one constraint. Otherwise, it would be generating an infinite amount of output. Bearing this in mind, TOC is easily explained through use of the “chain” analogy – “a chain is only as strong as its weakest link.” If we look upon our organization as a chain, where each department is a “link” in the chain, what constrains our organization from achieving its goal? Only through addressing the weakest link, the constraint, can substantial improvements be made. In other words, if the constraint dictates the pace of an organization’s ability to achieve it’s goal, it makes sense that addressing the constraint will allow the organization to achieve a substantial rate of throughput faster.
There are five steps in applying TOC:
1.Identify the system’s constraints. Of necessity this included prioritization so that just the ones that really limit system progress toward the goal.
2.Decide how to exploit the system’s constraints. Once we have decided how to manage the constraints within the system, how about the majority of the resources that are not constraints? The answer is that we manage them so that they just provide what is needed to match the output of the constrained resources. We NEVER let them supply more output than is needed because doing so moves us no closer to the goal.
3.Subordinate everything else to the above decision in Step 2. Since the constraints are keeping us from moving toward our goal, we apply all of the resources that we can to assist in breaking them. Constraints are not acts of God. In practically all cases their limiting impact can be reduced or eliminated.
4.Elevate the system’s constraints. If we continue to work toward breaking a constraint (also called elevating a constraint) at some point the constraint will no longer be a constraint. The constraint will be broken.
5.If the constraint is broken, return to Step 1. When that happens, there will be another constraint, somewhere else in the system that is limiting progress to the goal.
To analyze the process of improvement is to look at reality; think logically
and precisely about what is going on around us. Eli Goldratt uses “The Goal” to explain how simple improvement can be. The message is delivered in a Socratic way. Socrates’ way of assisting people was spontaneous and specifically suited to the particular needs of the individual as he saw them. Socrates is famous for his method of asking questions in especially effective ways. He is very careful not to take for granted what the answers of the other person will be; but he always waits for the response and occasionally repeats a simple question, not to gain a contradiction, but so that the argument can move consecutively. He does not wish to get into a habit of anticipating the other’s thoughts, but prefers that the person develop his own views in his own way, whatever they may be. Therefore we have Jonah, the physicist who helps Alex Rogo, the plant manager at UniCo. Jonah’s way of leading to the answers, his Socratic approach is very effective at peeling away the layers of common practice.
Alex was born and raised in Bearington and is very proud to have “come back home” to work for one of the factories in his hometown. The plant is running but not turning a profit, therefore facing the threat of being closed. The book follows Alex and his team as they use principles such as benchmarking and the theory of constraints to transform their mediocre plant into a money making machine. Before this transformation, the division Vice President, Bill Peach, tells Alex that he has three months to turn the plant around. Now it’s time to sit back and analyze what Alex is or is not doing for his plant to make a change.
The central premise of The Goal can best be summarized as CHANGE. I state this in contradiction to what many will believe is the real premise. It is easy to get a message of focus on what’s important’ from the book. Most believe the story attempts to get readers to focus on making money. If you focus your activities only on those that make money and eliminate those activities that do not make money, you will eliminate waste and constraints. Another focus would be of constant improvement. Continuous improvement is seen throughout the book, when non-bottleneck machines seem to become new bottlenecks, but this really stuck out to me at the end when everything seems to be going smoothly only to find that more problems have come up. But neither of these focuses produces permanent results unless there is change. As you read the book, the constant theme that is replayed over and over is one of change. Previous assumptions must be changed to allow processes to be changed to allow interactions to change. Yes, the chain analogy exists even in my description here as well as does the need to discover the core constraint. If the Union contract was the constraint that kept Bob from changing lunch hours so the set-up process on the NCX-10 could be changed so that smaller lots could be run so that increased throughput could occur, Rogo addressed it (the constraint) to accomplish the change. I use this as an example to show that change is the focus of the book. To further support my position, look at chapters 33 through 40. I dare you to try to count the number of times change’ appears.
Additionally, look at the amount of times change’ is the subject of the sentence, paragraph, or chapter. Rogo had to change his paradigm of operations, then change his staffs’, then change operations of the factory, then change his senior management’s paradigm of success and profitability, then change his own paradigm again of how to perform his function once he moved up, and then he had to discover how to change his division for it to survive. Using the Theory of Constraints (TOC) and the Five Focusing Steps only facilitated Rogo’s being able to implement change. The book states that a manufacturing organization cannot run at 100% and that you cannot balance the assembly line. It seems that your efforts for efficiency must be focused on the worst bottleneck. The loss caused by a bottleneck is a loss for the entire system. Focusing on improving the throughput of the bottleneck increases the flow for the entire manufacturing line. If there is a bottleneck, then all other areas are capable of excess capacity. Don’t try to improve non-bottlenecks, as it is a waste of time and effort. Finally, knowing how to think about things in terms of cause and effect was hammered home throughout the book. Theory of constraints says that by knowing how to think, we can better understand the environment around us and by having a better understanding we are then able to make improvements. The key lies in the ability to transform production from the prevailing cost-world mentality into the common sense approach of the throughput-world mentality. A shift in mentality is necessary in order to deduce the mandatory procedures.
Goldratt also knew when he wrote the book that developing the ability to design and implement change was just as important. His appendix “My Saga” at the end of the book clearly addresses the need to create and implement change and the disastrous effects of improperly implemented change, even TOC.
I work at Lucent Technologies Fiber Optic Cable Plant in Norcross We manufacture fiber used for phone lines, cable lines and several other uses. The fiber starts out as a preform where certain chemicals are added to the material to make it into fiber. Several departments handle the perform before it reaches Post Draw as fiber spun on a spool. Inspections are done numerous times to find scarring and impurities. When impurities are found the preform is rejected and not sent to Draw. Like everything in life some bad preform slips through to the next phase in the process. Thus resulting in bad fiber on the Rewind/Repair floor. I digress. After the fiber is drawn and placed on 600K spools it is sent down to Rewind/Repair. We then rewind the fiber on smaller spools and send them to the Measurements department for testing. After testing is complete in four areas the fiber is sent back to the Rewind department to remove the bad fiber found during testing. The fiber is then sent back to measurements for further testing and if it passes the four test sets it goes to the cage as inventory. More times than many the fiber ends up back in rewind. A spool can start out with 75K meters on it and go back and forth from Measurements to Rewind until it is split up into several spools. When we get a spool with less than 5K meters on them the PTS systems has us run half and end up scrapping both the payout and takeup spools. I feel like this is a constraint because this spool may have gone to Measurements and back to Rewind four times only to be scrapped. This is a waste of time for the operator. Although it is a part of the process, I think spools with 5K or less of fiber on them should be automatically scrapped. There is not a instance where an order ever calls for 5K meters or less. Another example of a constraint in our department was with lunch and breaks. When I first came to the cable plant you took your breaks whenever you could within a specific window. Just as long as your machine was running and an operator on your line was to set it up if it went down, you could take your break at your convenience. A few months went by and new coaches were hired. They decided they wanted to closely monitor the operator to see when they took their breaks and for how long. The decision was made to stop the machines when you go on your break and/or lunch. The new coach obviously wanted to make a good impression and bring something new to the table. They changed our staggered breaks to scheduled breaks. The results after a few weeks showed production was down and efficiency was at a record low. It showed machines were not running at full capacity for a tour. Immediately their superiors decided we would go back to the staggered lunches and breaks. The downtime was then reduced and our departmental efficiency went up. They realized it was not as important to monitor the person, as it was to have the machine running. Now I know this does not stand up to the problems Alex and his staff faced with UniCo but this is what I face everyday. I found a case study that was used at the TOC World 2000 Seminar in St. Paul MN last year. I thought I would include it for your enjoyment