goal

The Goal by Dr. Elihayu M. Godratt introduces the theory of constraints through a fascinating story of a plant manager who faced an operational crisis. The story begins with Alex Rogo, who is a plant manager for UniCo is facing a situation where his production plant is losing money. He is given an ultimatum by his boss, Bill Peach ; either he manages to revitalize his plant in three months’ of time or his unprofitable plant would be shut down. In the beginning, Alex is totally depressed and certain that he would not meet the output requirement due to the limited amount of time available as he even has no idea where to start with. Fortunately, Alex remembers running into his old physics professor, Jonah who introduces Alex a new way of thinking about his situation with the Socratic inductive reasoning method. With guidance of Jonah, Alex and his team apply the basic principles of the theory of constraints and manage to turn around the plant into a money maker.

The Goal had developed five steps of the improvement process where Alex, Alex’s team or Jonah were used to overcome a demand constraint. The first step is to identify system constraints otherwise known as bottlenecks which defined as any resources that limits the throughput of the plant where its demand is greater than its capacity. Alex and his team called the bottleneck as Herbie. From Alex past experience in Boy Scout hike, he found out that Herbie who probably the slowest hiker in the troop determines the troop’s throughput. Increasing Herbie throughput results in an increase in troop throughput which is similar to the bottleneck phenomenon effects as described by Jonah. In order to figure out the presence of Herbie in plant, Alex and his team first compared all the reso...

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...f the balance is achieved, the company will have stack of inventory piled up. This is due to the dependant event and statistical fluctuation phenomenon. From Boy Scout hike experience and Hilton Smyth’s order demonstration, they learned that the downstream operation should have more capacity.

With the suspicion of presence of new system’s constraints, Jonah demonstrate that busy not equal to efficient as a local system efficiency is different with entire system efficiency. Hence, it is recommended to run the non constraints at the same rate as constraints and left for idle for some of the time. In addition, Jonah also illustrated that reduction of batch size can help to reduces inventory and product spending time in company. Although this approach leading an increases in setup time for non constraint systems, the wasted time in non constraint system is illusive.