The Goal: Increasing batch sizes at bottlenecks or focus on throughput

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This example is found on page 154-155 of "The Goal - third revised edition". Jonah discovers that one of the bottlenecks (heat treat) is being used to process materials that will not translate directly into throughput because the Bearington plant is concerned about efficiencies. Jonah argues that this mode of operation is hurting the plants throughput, he poses the question to Alex "Tell me again how this [the increased batch sizes] improves your throughput". In turn Alex feels himself starting to turn red with the memory of earlier conversations with Jonah.
The following cloud shows how Alex, instead of turning red, can analyze the situation using a cloud.

D: Increase batch sizes in the heat treat department
D': Only process the quantities that will translate into immediate sales
B: Show higher "efficiencies" in company reports to the division
C: Assemble and ship more products (increase throughput)
A: Keep the Bearington plant open
Click on the icons on the arrows to see assumptions and injections
In order to Keep the Bearington plant open I must Show higher "efficiencies" in company reports to the division and in order to Show higher "efficiencies" in company reports to the division I must Increase batch sizes in the heat treat department. But, in order to Keep the Bearington plant open I must also Assemble and ship more products (increase throughput) and in order to Assemble and ship more products (increase throughput) I must Only process the quantities that will translate into immediate sales. I can't both Increase batch sizes in the heat treat department and Only process the quantities that will translate into immediate sales.
RelationAssumption(s)Injection(s)
D-D'1. There is no way to increase batch sizes with materials that goes into sold products.1. Because there is an abundance of material waiting to go through heat treat, a system that can identify which materials for customer orders requiring the a specific temperature, will both increase the batch size and process materials that goes into immediate sales. Such a system was created in The Goal, by a foreman who followed the priority list, but filled up spare room in the oven with other parts further down on the list.
B-D1. The effeciency numbers favor processing of large quantities regardless of whether they are sold or not.
2. There is no other way to improve efficiencies.
3. There's enough money to build inventories.
1. An injection here is simply to change the performance measures, but this is not in the hands of Alex at this time. However, Lou succeeds in "massaging" the numbers to show higher efficiency.
2. A foreman on the nightshift has an idea for doing change-overs faster. This will enable the oven to be productive for more hours and in turn impact the efficiencies positively.
3. A show-stopper for increasing batch sizes with stock units is the cash situation of the company.
C-D'1. The products in the backlog requires heat treat.
2. Increasing sales of products that doesn't require heat treat is not possible.
3. Capacity cannot be increased.
4. Sale will be lost if the lead time becomes too long or due dates are not being kept.
1. If there's a lot of orders in the backlog, where the ordered products doesn't require heat treat, simply focusing on these would enable the company to increase throughput. It also turns out in the novel, that some of the products actually only require heat treat, because they were altered to improve efficiencies on non-bottlenecks.
2. If marketing can sell more products now, where heat treat is not necessary, this is another way to increase throughput.
3. A suggestion by Jonah is to get some heat treating done outside the company. In the book they do follow this suggestion, even though a negative is an increase in product cost, which is also a number measured by the division.
4. It is obvious that if customers are very patient and forgiving, we don't have to be as concerned about losing sales (this is not true for most companies).
A-B1. The division regards efficiencies as a prime measure of company performance.
2. The division has the power to shut down the plant.
1. If Alex can convince the division head that the efficiency measures are in fact counterproductive, he will not need to increase the batch sizes. Alex tries to do this to some extent at certain parts of The Goal, without much luck.
2. Alex could also look for an investor to buy the plant who is thinking along similar lines as himself. Maybe an unlikely action for a plant manager, who is expected to let the division handle the portfolio.
A-C1. Shipping more products is vital for survival.1. Not much point in trying to invalidate this assumption.