The Goal: A Process of Ongoing Improvement

The Goal: A Process of Ongoing Improvement

by

Eliyahu M. Goldratt and Jeff Cox

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The Goal: A Process of Ongoing Improvement: Chapter 37 Summary & Analysis

Summary
Analysis
At the plant, Ralph raises the concern that something about their process still feels off. Even when the constraints were changed and their capacity increased, it did not seem to affect the non-constraints, even though it theoretically should have. Stacey realizes that with the red and green tagging system still in place, the bottlenecks were still operating like bottlenecks when they no longer needed to. She surmises that if they remove the tagging system, the natural flow of the manufacturing system should self-correct and might even resolve her Capacity Constraint Resources problem.
Again, the fact that Alex and his staff are still improving upon their own system, even after the main story arc has ended, suggests that any complex system requires constant attention and development. Stacey’s decision to remove the tagging system suggests that once a system is optimized and flows according to its constraints, it may no longer need the organizing and support systems that were initially necessary.
Themes
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
Bob points out that they are shipping so far ahead of schedule now that the market is more of a bottleneck than the NCX-10 and heat-treating machines—they are limited by their sales. Lou agrees but wonder why the NCX-10 is still working at capacity. Stacey admits that to keep the bottleneck machines operating at full capacity, she ordered a few extra units to be assembled and stocked on shelves. She estimates they have roughly six weeks’ more inventory than they require. She adds a warning to Step 5 of their process: “do not allow INERTIA to become a system’s constraint.”
Stacey’s decision to order the bottlenecks to make unnecessary products in order to keep them at full capacity echoes the plant’s former practice of trying to keep everyone busy and thus efficient at all time. Even within a new and undeniably better system, old habits die hard.
Themes
The Importance of Goal-Setting Theme Icon
Efficiency vs. Optimization Theme Icon
Everyone is satisfied except for Lou, who realizes that with this new process, every metric they’ve used to measure progress (including cost accounting) needs to be completely reexamined. However, Alex is excited: with the 20 percent excess capacity that Stacey artificially filled, he thinks he can leverage that free capacity to “really take the market.” He wants Lou and Ralph to go to headquarters with him tomorrow morning to talk to Johnny Jons.
Since Stacey created unnecessary work, as soon as the plant stops producing that work, they will have more capacity than they can actually use. This new capacity allows Alex to push their new manufacturing system even further and to test its limits. Alex’s desire to always increase profits, even when the plant is not in crisis, suggests that his work is an ongoing obsession.
Themes
The Importance of Goal-Setting Theme Icon
Efficiency vs. Optimization Theme Icon