Process Improvement — Work Smarter, Not Harder

April 2009 By Jay Foster And Peter Doyle

multipage

OF THE MANY insights that stand out in Eli Goldratt’s book, “The Goal,” one of the most memorable is the plant manager’s frustration with a machine operator reading a newspaper while on the clock. Like most of us, the plant manager thought that working harder or faster would naturally generate more money for the business. That’s pretty straight forward, right?

Not according to Goldratt. He makes it clear that running an operation at 100 percent rated capacity is not the objective. He reminds us that making money is the “Goal” of being in business. Goldratt’s “Theory of Constraints” teaches that you might actually make more money and offer faster ship dates when operators—who are not constrained—turn off their equipment. Perhaps, the only challenge greater than believing such a radical insight is to have the real-time information and frontline leadership necessary to act upon it.

Goldratt’s story of the idle operator and upset plant manager highlights the complexity of today’s manufacturing “systems.” Most businesses can be modeled as classic systems with inputs, such as labor and materials, and outputs, such as shipments and finished goods inventory. Unfortunately, manufacturing tends to fall on the complex end of system theory, where the relationship between cause and effect is not as intuitive as a simple system.

Consider a simple system, such as your car’s cruise control. You set the desired output speed; the speed control system monitors the actual speed, compares it to the target speed and makes the necessary adjustment on the gas pedal. This is referred to as a first-order system with a balancing feedback loop. First order basically means that a single cause (input = gas pedal) leads to a single, immediate effect (output = speed). Good feedback loops are critical to any well-behaved system.

Complex Manufacturing

Goldratt highlights that today’s manufacturing process is anything but a simple, first-order system. Perhaps, in the good old days of mass manufacturing and building to inventory—where a print run of, say, 500,000 units lasted several days—manufacturing was closer to the simple end of the spectrum. Controlling such a system to make more money was somewhat like setting a speed target in your car and adjusting the gas pedal as needed (faster = more gas, slower = less gas). There are minimal information and basic leadership skills required to optimize such a simple system. No one ever got fired for keeping operators busy running their machines.

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