Have you ever said, or done, something pretty stupid and
felt pretty bad about it later? Did it
embarrass you knowing that you will soon be eating “humble pie”? The answer is: probably yes. Nevertheless, this has recently happened to
me and now I must swallow the bitter pill.
As I have written in other posts I am currently getting my MBA. One of the classes this semester is
Operations Strategy and one of the books we are required to read is “The Goal” by Eli Goldratt. Before the semester began I emailed our
Director of the MBA program basically telling her the book is old and asking
why we couldn’t review some new information that is out there. You see I have read “The Goal” three different times since it came out in 1985. Last weekend I read it for the fourth time
and I am glad to say it again has changed my life.
In 1987 I was working at IBM and I remember that a new book
had come out titled The Goal and our
management team wanted us all to read it.
They told us that if we were to read this book it would change our lives
and everything we ever thought about process improvement. We had all heard this before and I felt at
the time that this would just be another book of the month. Every time some quality guru wrote a book it
seemed we were implementing a new process improvement program. We had dabbled in TQM and Quality Circles and
we were even going through a certification process to get ISO 9001. The last thing I wanted to do was read a book
on process improvement, but I went ahead and read it. Actually I found it very hard to put the book
down at the time and finished it over a weekend. I remember that when I finished the book I
had this feeling that my life had somehow been changed and now as I look back I
truly believe it was. The Goal is written in the form of a
novel and the story follows the daily life of a plant manager named Alex
Rogo. In the story Alex is experiencing
many of the same issues we all face in our various roles. His company was late on orders, struggling
with profitability, and he was even having issues at home with his wife. The book basically touched many of the points
I think we can all relate to.
You might be asking yourself if I have read the book three
different times why haven’t I been putting its message to use in my business. Why wouldn’t a book that has changed so many
businesses be a staple in every leader’s book collection? I think the answer is that every time a new
program comes out we drop what we are doing and try the next best thing. We think wow this is new and improved and it
must be better than what we are currently doing. I think we have been wrong for many years.
There are many businesses out there today that are
struggling with issues that have plagued every business since the beginning of
time. Authors have made a fortune
selling books, Speakers have been giving speeches, and consultants have been providing
consulting services to businesses and honestly not very much has changed. The answers to the issues that we are facing
can be acquired with common sense. I
think companies need to approach process improvement much like we teach our
children how to ride a bike. Think back
to your childhood when you first learned to ride your bike. Did your parents go out and buy you a bike
like Lance Armstrong rides for your first one?
Did they get you gloves, a $200 helmet, $100 cycling shoes, a bike
computer? The answer is: probably
no. They probably got you the cheapest
one they could find. It might have even
been a used bike that some other kid had outgrown. Why am I asking all of this? What has this got to do with
manufacturing? I think you will find the
answer in what follows.
Most processes today are complex and difficult to understand,
and technology has given us many innovative ways to produce products. Technology is a wonderful thing as long as
everything runs smoothly, but honestly how long can we expect that to
happen? In “The Goal” Jonah helped Alex Rogo understand that the true goal of
any business should be to make money now and in the future. Jonah explained that in order to make money
businesses need to increase throughput while at the same time reducing
inventory and operational expenses.
Furthermore, Jonah explained that every business had at least one constraint
(bottleneck) hampering throughput and it was the job of the leader to optimize
that constraint.
Now let’s look at the case of your first bicycle again and
apply it to the scenario Jonah was describing.
Let’s take for example there is a struggling machine shop. This machine shop is having trouble shipping
anything on time. Orders to its
customers are late and many of the parts produced are defective. Management has seen overtime, scrap, rework,
inventory and many other costs increase for some time. Everyone agrees that this process must be
improved and something has to be done now, but not sure how to proceed. As we mentioned earlier there are so many
options out there today to help manufacturing.
Management of this struggling machine shop could go out and buy the
latest and greatest manufacturing information software. They could buy state of the art inspection
equipment. They could implement
elaborate process improvement techniques like Lean, Toyota Production, 6 sigma,
and Quick Response Manufacturing. Isn’t
this starting to sound a lot like buying your kid $12,000 worth of junk just to
learn to ride a bike? Keep all of this
in mind and think about this. What would
happen if instead of doing all of the elaborate stuff mentioned we just did the
following?
We buy our struggling machine shop a used kid’s bike with
training wheels. We walk out on the
floor and look where all of the parts are backed up. We look at all of the backed up parts and try
to see if they can be processed on another machine. If we still have too many parts we look to
see if the machine is running to its full capacity. Does it shut down every shift for 30 minutes
for lunch and another 30 minutes for breaks?
Can some of the parts be subcontracted?
Do we have parts released into the shop that are not due to any
customers right now and just being processed for inventory? These are the used kid’s bike kinds of things
we could be doing right now in order to increase throughput, reduce inventory,
and reduce operational expenses which by the way are the only metrics we should
be tracking.
I do not want anyone to misunderstand me on this. I think all of the new and innovative things
and ideas that have come out are all awesome.
They have the potential to help many companies make the incremental
improvements needed to remain a going concern today. All I am trying to say is that before you
learn to run you must learn to walk.
Before you ride in the Tour De France you need to make it down the
sidewalk without falling over. And
finally before you can become a “world class” business you have to understand
the basic, easy, less costly message of “The
Goal”.
P.S. Sorry Dr. Brazier
