The Goal by Dr. Elihayu M. Godratt introduces the theory of constraints through the fascinating story of a plant manager faced with an operational crisis. The story begins with Alex Rogo, a plant manager at UniCo, who is faced with a situation where his manufacturing plant is losing money. He is given an ultimatum by his boss, Bill Peach; either he can revitalize his plant in three months or his unprofitable plant will be closed. At first Alex is totally depressed and is sure that he would not be able to meet the production requirements due to the limited time available as he has no idea where to even start. Luckily, Alex remembers meeting his old physics professor, Jonah, who introduces him to a new way of thinking about his situation with the Socratic inductive reasoning method. With Jonah's guidance, Alex and his team apply the basic principles of the theory of constraints and manage to turn the plant into a source of money. The Goal had developed five stages of the improvement process in which 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, defined as any resource that limits the plant's productivity where its demand is greater than its capacity. Alex and his team called the bottleneck Herbie. From Alex's past experience on the Boy Scout hike, he has found that Herbie, probably the slowest hiker in the group, determines the group's performance. Herbie's increased throughput translates into an increased troop throughput that is similar to the effects of the bottleneck phenomenon described by Jonah. To determine Herbie's presence in the plant, Alex and his team first compared all the data... to the middle of the paper... if equilibrium is reached, the company will have a pile of inventory piled up. This is due to the event dependent and statistical fluctuation phenomenon. From the Boy Scouts' hiking experience and Hilton Smyth's order demonstration, they learned that the downstream operation should have more capacity. With the suspicion of the presence of constraints of the new system, Jonah proves that busy does not equal efficient as the efficiency of a local system is different with the whole system efficiency. Therefore, it is recommended to run non-constraints at the same speed as constraints and leave them idle for some time. Additionally, Jonah also illustrated that reducing batch sizes can help reduce inventory and time spent in-house on products. Although this approach leads to an increase in setup time for non-binding systems, the time wasted in the non-binding system is illusory.
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