The Goal

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And what is operational expense? It's whatever lets us turn inventory into throughput, which in our case would be the en- ergy the boys need to walk. I can't really quantify that for the model, except that I know when I'm getting tired.

If the distance between Ron and me is expanding, it can only mean that inventory is increasing. Throughput is my rate of walking. Which is influenced by the fluctuating rates of the oth- ers. Hmmm. So as the slower than average fluctuations accumu- late, they work their way back to me. Which means I have to slow down. Which means that, relative to the growth of inventory, throughput for the entire system goes down.

And operational expense? I'm not sure. For UniCo, when- ever inventory goes up, carrying costs on the inventory go up as well. Carrying costs are a part of operational expense, so that measurement also must be going up. In terms of the hike, opera- tional expense is increasing any time we hurry to catch up, be- cause we expend more energy than we otherwise would.

Inventory is going up. Throughput is going down. And op- erational expense is probably increasing.

Is that what's happening in my plant?

Yes, I think it is.

Just then, I look up and see that I'm nearly running into the kid in front of me.

Ah ha! Okay! Here's proof I must have overlooked some- thing in the analogy. The line in front of me is contracting rather than expanding. Everything must be averaging out after all. I'm going to lean to the side and see Ron walking his average two- mile-an-hour pace.

But Ron is not walking the average pace. He's standing still at the edge of the trail.

"How come we're stopping?"

He says, "Time for lunch, Mr. Rogo."

"But we're not supposed to be having lunch here," says one of the kids. "We're not supposed to eat until we're farther down the trail, when we reach the Rampage River."

"According to the schedule the troopmaster gave us, we're supposed to eat lunch at 12:00 noon," says Ron.

"And it is now 12:00 noon," Herbie says, pointing to his watch. "So we have to eat lunch."

"But we're supposed to be at Rampage River by now and we're not."

"Who cares?" says Ron. "This is a great spot for lunch. Look around."

Ron has a point. The trail is taking us through a park, and it so happens that we're passing through a picnic area. There are tables, a water pump, garbage cans, barbecue grills-all the ne- cessities. (This is my kind of wilderness I'll have you know.)

"Okay," I say. "Let's just take a vote to see who wants to eat now. Anyone who's hungry, raise your hand."

Everyone raises his hand; it's unanimous. We stop for lunch.

I sit down at one of the tables and ponder a few thoughts as I eat a sandwich. What's bothering me now is that, first of all, there is no real way I could operate a manufacturing plant without having dependent events and statistical fluctuations. I can't get away from that combination. But there must be a way to over- come the effects. I mean, obviously, we'd all go out of business if inventory was always increasing, and throughput was always de- creasing.

What if I had a balanced plant, the kind that Jonah was saying managers are constantly trying to achieve, a plant with every resource exactly equal in capacity to demand from the mar- ket? In fact, couldn't that be the answer to the problem? If I could get capacity perfectly balanced with demand, wouldn't my excess inventory go away? Wouldn't my shortages of certain parts disappear? And, anyway, how could Jonah be right and every- body else be wrong? Managers have always trimmed capacity to cut costs and increase profits; that's the game.

I'm beginning to think maybe this hiking model has thrown