1. A Process of Ongoing Improvement Eliyahu M. Goldratt and Jeff Cox
The Goal
A Process of Ongoing Improvement
Eliyahu M. Goldratt and Jeff Cox

2. The Goal Dependent events – Statistical Fluctuations
Q. - Where does Alex first come to grips with this (i.e. sees this first hand)?
A. – During the boy scout hike.

3. Analyzing the boy scout hike
The Goal
Analyzing the boy scout hike
Observations:
the walking speed of individuals fluctuate
All may have the same average walking speed, but gaps continue to lengthen, why?
There is no limit to how much an individual can slow down, but your top speed is dependent on the person in front.
Fluctuations are accumulating over time, and the slow fluctuations tend to accumulate faster because they are not limited like the fast ones.

4. Boy scout hike –> Manufacturing Plant
The Goal
Boy scout hike –> Manufacturing Plant
Observations:
Each boy is an operation
The product is “walk the trail”
Each boy/operation is dependent on the one in front.
A “sale” is when the last operation/boy walks the trail.
Throughput is the rate at which the last person walks the trail.
Operating expense is the energy output of each boy.
Inventory (material inside the plant) is the distance between the first and last boy.
Fluctuations in operating speed is causing inventory to increase and causing throughput to decrease. Attempting to reduce gaps is increasing operating expense.

5. See Game Variations on Next Slide
The Goal
Play the matches game?
Setup: 5 operators, 5 bowls, matches, 1 die
Dump all matches in bowl #1
Roll one die (starting with player #1) and pass that many matches from your bowl to the next person down the line
Pass die to next player who rolls die and moves that number of matches from their bowl to next player, cannot pass more matches than what is in your bowl.
Continue for each player, with last player handing die back to player #1.
Recorder records number produced by last operator each round, and the WIP at operation at the end of the game.
What is the average number rolled on a die?
After 20 rounds, how many matches should the last player “produce”?
See Game Variations on Next Slide

6. The Goal Play the matches game?
Variation 1: 5 operators and 1 recorder, 20 rounds
1 die per operator
Expected output?
Variation 2: 5 operators and 1 recorder, 20 rounds
2 die per operator, except for 1 die at last operator
Variation 3: 5 operators and 1 recorder, 20 rounds
2 die per operator
Variation 4: 11 operators and 1 recorder

7. Back to the Boy scout hike
The Goal
Back to the Boy scout hike
After lunch the boy scouts “self-arrange” so that the fastest is up front and so on until Herbie is at the rear.
Q. What was the result?
A. Line got even longer.
Q. Did throughput improve (completing more miles)?
A. No, completed miles still dependent on last scout walking the trail, plus “inventory” has increased.
Observation: however, everyone is always walking (no one is idle). But goal is not being achieved.

8. Continuing with the Boy scout hike
The Goal
Continuing with the Boy scout hike
Q. How does Alex fix the boy scout hike?
A. Puts kids in order from slowest first to fastest last. The line then stays compressed (i.e. inventory has gone down and progress has improved because Herbie is setting the pace and doesn’t have to exert energy to catch up).
Q. How do they further improve throughput?
A. Off-loaded Herbie’s backpack. In oherwords, they improved Herbie’s throughput so the entire boy troop’s throughput improved.

9. Alex’s First Chance to Test the Boy Scout Theory
The Goal
Alex’s First Chance to Test the Boy Scout Theory
Hilton Smyth’s order
needs 100 parts by end of day
Parts require 2 operations, fabrication then weld by robot
Each department averages 25 units per hour, with robot working at almost exactly 25 unit pace.
Start fabrication at noon, transferring parts on the hour, every hour.
Fabrication
(25/hour)
Transfer
(once/hour)
Weld
(25/hour)

10. Alex’s First Chance to Test the Boy Scout Theory
The Goal
Alex’s First Chance to Test the Boy Scout Theory
Expectation:
Hourly Part Count
Fabrication
(25/hour)
Transfer
(once/hour)
Weld
(25/hour)
noon
1:00
2:00
3:00
4:00
Fabrication 25
Welding

11. Alex’s First Chance to Test the Boy Scout Theory
The Goal
Alex’s First Chance to Test the Boy Scout Theory
Realization:
100 90
Hourly Part Count
Fabrication
(25/hour)
Transfer
(once/hour)
Weld
(25/hour)
noon
1:00
2:00
3:00
4:00
Fabrication 19 21 28 32
Welding 25

12. The Goal Q. So what have they learned to this point?
A. Have more capacity at downstream operations.

13. The Goal Q. What does Jonah suggest they do next?
A. Distinguish between bottleneck and non-bottleneck resources.
Definition:
Bottleneck – any resource whose capacity is equal to or less than the demand placed upon it.
Non-bottleneck – any resource whose capacity is greater than the demand placed upon it.

14. The Goal
Jonah then suggests balancing the flow of product through the plant with demand from the market. Not to balance the capacities of operations with demand.
Q. What determines the flow of product through the plant.
A. The bottleneck resources.

15. The Goal
The next step for Alex and company is to identify the bottlenecks (i.e. find Herbie).
Q. So how do you find a bottleneck in a manufacturing plant?
A. Go out on the floor and find the operation with the most inventory sitting in front of it.
Q. Is having a bottleneck a bad thing?
A. Not necessarily, all plants have to have a bottleneck.

16. The Goal
The next step for Alex and company is to identify the bottlenecks (i.e. find Herbie).
Q. Once the bottleneck is identified, can you simply move the machines/operations around like Herbie was moved to the front of the line?
A. No, production steps often cannot be reorganized.
Q. So how do you solve the problem of “moving Herbie to the front”?
A. Find more capacity for the bottleneck, don’t try to move them. Have enough capacity to meet demand.

17. The Goal
The next step for Alex and company is to identify the bottlenecks (i.e. find Herbie).
Q. How do you find more capacity?
Make sure it is never idle (focus your attention on it).
Increase cycle time on the machine
Add another duplicate machine
Outsource to another vendor
Reduce the demand (process change)
Inspect part quality before bottleneck (make sure bottleneck only works on good parts)
Ensure process controls on bottleneck are good so bad parts aren’t produced
Don’t let it work on parts that aren’t needed.

18. The Goal Back to the story:
Q. Where does Alex and company find the bottleneck?
They find two bottlenecks, NCX-10 and Heat Treat
Q. What is thier first approach to improving the flow through the bottlenecks and ultimately improving productivity.
1. Move QC in front of bottlenecks.
2. Make a list of all late jobs and what components from those jobs flow through the bottleneck machines. They then create a schedule/list in due date order and instruct the bottleneck operators to only work on those jobs in that order.