The Goal

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"And let's just take the X machine as an example," he says. "How many hours a month did you say it's available for produc- tion?"

"About 585," says Ralph.

"The actual cost of a bottleneck is the total expense of the system divided by the number of hours the bottleneck produces," says Jonah. "What does this make it?"

Lou takes out his calculator from his coat pocket and punches in the numbers.

"That's $2,735," says Lou. "Now wait a minute. Is that right?"

"Yes, it's right," says Jonah. "If your bottlenecks are not working, you haven't just lost $32 or $21. The true cost is the cost of an hour of the entire system. And that's twenty seven hundred dollars."

Lou is flabbergasted.

"That puts a different perspective on it," says Stacey.

"Of course it does," says Jonah. "And with that in mind, how do we optimize the use of the bottlenecks? There are two princi- pal themes on which you need to concentrate...

"First, make sure the bottlenecks' time is not wasted," he says. "How is the time of a bottleneck wasted? One way is for it to be sitting idle during a lunch break. Another is for it to be pro- cessing parts which are already defective-or which will become defective through a careless worker or poor process control. A third way to waste a bottleneck's time is to make it work on parts you don't need."

"You mean spare parts?" asks Bob.

"I mean anything that isn't within the current demand," he says. "Because what happens when you build inventory now that you won't sell for months in the future? You are sacrificing pres- ent money for future money; the question is, can your cash flow sustain it? In your case, absolutely not."

"He's right," admits Lou.

"Then make the bottlenecks work only on what will contrib- ute to throughput today ... not nine months from now," says Jonah. "That's one way to increase the capacity of the bottle- necks. The other way you increase bottleneck capacity is to take some of the load off the bottlenecks and give it to non-bottle- necks."

I ask, "Yeah, but how do we do that?"