The Goal

144

I whisper to everybody to start taking some notes on this.

"A bottleneck," Jonah continues, "is any resource whose ca- pacity is equal to or less than the demand placed upon it. And a non-bottleneck is any resource whose capacity is greater than the demand placed on it. Got that?"

"Right," I tell him.

"Once you have recognized these two types of resources," says Jonah, "you will begin to see vast implications."

"But, Jonah, where does market demand come in?" Stacey asks. "There has to be some relationship between demand and capacity."

He says, "Yes, but as you already know, you should not bal- ance capacity with demand. What you need to do instead is bal- ance the flow of product through the plant with demand from the market. This, in fact, is the first of nine rules that express the relationships between bottlenecks and non-bottlenecks and how you should manage your plant. So let me repeat it for you: Bal- ance flow, not capacity."

Stacey is still puzzled. She says, "I'm not sure I understand. Where do the bottlenecks and non-bottlenecks come into the pic- ture?"

Jonah says, "Let me ask you: which of the two types of re- sources determines the effective capacity of the plant?"

"It would have to be the bottleneck," she says.

I say, "That's right. It's like the kid on that hike last weekend -Herbie. He had the least capacity and he was the one who actually determined how fast the troop as a whole could move."

"So where should you balance the floor?" asks Jonah.

"Oh, I see," says Stacey. "The idea is to make the flow through the bottleneck equal to demand from the market."

"Basically, yes, you've got it," says Jonah. "Actually, the flow should be a tiny bit less than the demand." " "How come?" asks Lou.

"Because if you keep it equal to demand and the market demand goes down, you'll lose money," says Jonah. "But that's a fine point. Speaking fundamentally, the bottleneck flow should be on a par with demand."

Bob Donovan is now making various noises, trying to get into the conversation.

"Excuse me, but I thought bottlenecks were bad," says Bob. "They ought to be eliminated where possible, right?"