The Goal

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"That means more customers come to us because we can deliver faster," says Lou.

"Our sales increase!" I say.

"And so do our bonuses!" says Stacey.

"Whoa! Whoa now! Hold up here a minute!" says Bob.

"What's the matter?" I ask him.

"What about setup time?" he says. "You can batch sizes in half, you double the number of setups. What about direct labor? We got to save on setups to keep down costs."

"Okay, I knew this would come up," I tell them. "Now look, it's time we think about this carefully. Jonah told me last night that there was a corresponding rule to the one about an hour lost at a bottleneck. You remember that? An hour lost at a bottleneck is an hour lost for the entire system."

"Yeah, I remember," Bob says.

I say, "The rule he gave me last night is that an hour saved at a non-bottleneck is a mirage."

"A mirage!" he says. "What do you mean, an hour saved at a non-bottleneck is a mirage? An hour saved is an hour saved!"

"No, it isn't," I tell him. "Since we began withholding materi- als from the floor until the bottlenecks are ready for them, the non-bottlenecks now have idle time. It's perfectly okay to have more setups on non-bottlenecks, because all we're doing is cut- ting into time the machines would spend being idle. Saving set- ups at a non-bottleneck doesn't make the system one bit more productive. The time and money saved is an illusion. Even if we double the number of setups, it won't consume all the idle time."

"Okay, okay," says Bob. "I guess I can see what you mean."

"Now Jonah said, first of all, to cut the batch sizes in half. Then he suggested I go immediately to marketing and convince them to conduct a new campaign which will promise customers earlier deliveries."

"Can we do it?" asks Lou.

I tell them, "Already, our lead times have condensed consid- erably over what they were before thanks to the priority system and making the bottlenecks more productive. We have reduced lead time of about three to four months down to two months or even less. If we cut our batch sizes in half, how fast do you think we can respond?"

There is an eternity of hemming and hawing while this is debated.