The Goal: Bringing back old machines to supplement the NCX-10

| Print this cloud

The Goal: Bringing back old machines to supplement the NCX-10

B: elevate a system constraint
D: aquire/ operate old equipment
A: keep the plant open
D-D':Assumption(s)Injection(s)
There is no way to partially use old equipment. I can either choose to use it, or not.
C: prevent increasing costs
D': not use old equipment

In order to keep the plant open I must elevate a system constraint and in order to elevate a system constraint I must aquire/ operate old equipment. But, in order to keep the plant open I must also prevent increasing costs and in order to prevent increasing costs I must not use old equipment. I can't both aquire/ operate old equipment and not use old equipment.

RelationAssumption(s)Injection(s)
D-D'There is no way to partially use old equipment. I can either choose to use it, or not.
B-D1. There is no other equipment in the plant that can do the work of the NCX-10
2. Running this constraint at full capacity will still be less than market demand		2. If there was already excess capacity on the NCX-10 constraint, there would be no need to elevate it. However, if this excess capacity did exist, the NCX-10 would actually not be a constraint. If market demand was the constraint, elevating the NCX-10 would be useless.
C-D'1. We do not have all three machines necessary to supplement the NCX-10
2. It will require extra labor costs to operate these machines
3. Running more equipment will increase energy bills/costs		1. We do already have 2 of the 3 machines required. The third machine was actually acquired very cheaply - only for the rental cost of the truck to transport it.
2-3. Keeping labor/energy costs down is fairly irrelevant to the overarching goal of increasing throughput and making money.
A-B1. The constraint determines the amount of throughput the plant can make
2. Increasing plant profits/throughput is the only way to ensure the plant will stay open
A-C1. Management evaluates plant progress based on traditional cost accounting measures
2. Cutting costs is the goal of the plant and the only way to increase profit/throughput		2. According to throughput-world thinking, cutting costs is NOT the goal for the company. The true goal is to focus on throughput and increasing profit - not decreasing costs.