The Goal: A Process of Ongoing Improvement (18 page)

"This is it. Hello, Herbie,’’ says Bob.
In front of us is the NCX-10.
"Are you sure this is a bottleneck?’’ I ask.
"There’s some of the proof,’’ he says as he points to the

stacks of work-in-process inventory nearby—weeks of backlog according to the report Ralph and Stacey put together and which we reviewed about an hour ago.

"We talked to the expeditors,’’ says Bob. "They say we’re always waiting for parts from this machine. Supervisors say the same. And the guy who runs this area got himself a set of earplugs to keep him from going deaf from all the bitching he gets from everyone.’’
"But this is supposed to be one of our most efficient pieces of equipment,’’ I say.

"It is,’’ says Bob. "It’s the lowest-cost, highest-rate means we have of producing these particular parts.’’
"So why is this a bottleneck?’’
"This is the only one like it we’ve got,’’ he says.
"Yes, I know that,’’ I say, and I stare at him until he explains.
"See, this machine here is only about two years old. Before we installed it, we used other machines to do what it does. But this machine can do all the operations that used to take three different machines,’’ says Bob.
He tells me about how they used to process these parts using the three separate types of machines. In one typical instance, the process times per part were something like two minutes on the first machine, eight minutes on the second, and four minutes on the third—a grand total of fourteen minutes per part. But the new NCX-10 machine can do all three processes in ten minutes per part.
I say, "You’re telling me we’re saving four minutes per part. Doesn’t that mean we’re producing more parts per hour than we were? How come we’ve got so much inventory stacked up for this thing?’’
"With the old way, we had more machines,’’ he says. "We had two of the first type, five of the second type, and three of the third type.’’
I nod, understanding now. "So you could do more parts, even though it took you longer per part. Then why did we buy the NCX-10?’’
"Each of the other machines had to have a machinist to run it,’’ Bob says. "The NCX-10 only needs two guys on it for setups. Like I said, it’s the lowest cost way for us to produce these parts.’’
I take a slow walk all the way around the machine.
"We do run this thing three shifts, don’t we?’’ I ask Bob.
"Well, we just started to again. It took a while to find a replacement for Tony, the setup guy on third shift who quit.’’
"Oh, yeah...’’ I say. Man, Peach really did it to us that day. I ask, "Bob, how long does it take to train new people on this machine?’’
"About six months,’’ he says.
I shake my head.
"That’s a big part of the problem, Al. We train somebody and after a couple of years they can go elsewhere and make a few dollars more with somebody else,’’ says Bob. "And we can’t seem to attract anybody good with the wages we offer.’’
"Well why don’t we pay more for people on this equipment?’’
"The union,’’ says Bob. "We’d get complaints, and the union would want us to up the pay-grade for all the setup people.’’
I take a last look.
"Okay, so much for this,’’ I say.
But that isn’t all. The two of us walk to the other side of the plant where Bob gives me a second introduction.
"Meet Herbie Number Two: the heat-treat department,’’ says Bob.
This one looks more like what you might think of in terms of an industrial Herbie. It’s dirty. It’s hot. It’s ugly. It’s dull. And it’s indispensable.
Heat-treat basically is a pair of furnaces ...a couple of grimy, dingy, steel boxes, the insides of which are lined with ceramic blocks. Gas burners raise the internal temperatures to the 1500-degree-Fahrenheit range.
Certain parts, after they’ve been machined or cold-worked or whatever at ordinary temperatures, can’t be worked on anymore until they’ve been treated with heat for an extended period of time. Most often, we need to soften the metal, which becomes very hard and brittle during processing, so it can have more machining done to it.
So the furnace operators put in the parts, from a dozen or less to a couple of hundred, then they fire up the thing and cook the parts in there for a long time—anywhere from six hours to sixteen hours. And afterwards, the parts always have to go through a further cool-down to air temperature outside the furnace. We lose a lot of time on this process.
"What’s the problem here—we need bigger furnaces?’’ I ask.
Bob says, "Well... yes and no. Most of the time these furnaces are running half empty.’’
"How come?’’
"It’s the expeditors who seem to cause the problem,’’ he says. "They’re always running over here and having us run five of this part or a dozen of that part just so they can have enough to assemble a shipment. So we end up having fifty parts wait while we heat-treat a handful. I mean, this operation is run like a barbershop—take a number and stand in line.’’
"So we’re not running full batches.’’
"Yeah, sometimes we are. But sometimes even if we do a full batch in number, it’s not enough to fill the furnace.’’
"The batches are too small?’’
"Or too big in size, and we have to run a second heat to handle the pieces that wouldn’t fit in the first. It just never seems to work out,’’ says Bob. "You know, a couple of years ago, there was a proposal to add a third furnace, on account of the problems.’’
"What happened to it?’’
"It was killed at the division level. They wouldn’t authorize the funds because of low efficiencies. They told us to use the capacity we’ve got. Then maybe they’d talk expansion. Besides, there was all kinds of noise about how we’ve got to save energy and how another furnace would burn twice as much fuel and all that.’’
"Okay, but if we filled the furnace every time, would we have enough capacity to meet demand?’’ I ask.
Bob laughs.
"I don’t know. We’ve never done it that way before.’’

Once upon a time, I had an idea for doing to the plant essentially what I did with the boys on the hike. I thought the best thing to do would be to reorganize everything so the resource with the least capacity would be first in the routings. All other resources would have gradual increases in capacity to make up for the statistical fluctuations passed on through dependency.

Well, the staff and I meet right after Bob and I get back to the office, and it’s pretty obvious, awfully damn quick, that my grand plan for the perfect
un
balanced plant with Herbie in front is just not going to fly.

"From a production standpoint, we can’t do it,’’ says Stacey. "There is just no way we can move even one Herbie—let alone two—to the front of production,’’ Bob says. "The sequence of operations has to stay the way it is. There’s nothing we can do about it.’’

"Okay, I already can see that,’’ I say.
"We’re stuck with a set of dependent events,’’ says Lou. As I listen to them, I get that old familiar feeling which comes whenever a lot of work and energy are about to go down the tubes. It’s kind of like watching a tire go flat.

I say, "Okay, if we can’t do anything to change their position in the sequence, then maybe we can increase their capacities. We’ll make them into non-bottlenecks.’’

Stacey asks, "But what about the step-up in capacity from beginning to end?’’
"We’ll reorganize...we’ll decrease capacity at the head of production and increase it each stage on through,’’ I suggest.
"Al, we’re not just talking about moving people around. How can we add capacity without adding equipment?’’ asks Bob. "And if we’re talking about equipment, we’re getting ourselves into some major capital. A second furnace on heat-treat, and possibly a second n/c machine... brother, you’re talking megabucks.’’
"The bottom line,’’ says Lou, "is that we don’t have the money. If we think we can go to Peach and ask him for
excess
capacity for a plant that currently isn’t making money in the middle of one of the worst years in the company’s history . . . well, excuse my French, but we’re out of our goddamned minds.’’

My mother and the kids and I are having dinner that evening when Mom says to me, "Aren’t you going to eat your peas, Alex?’’

I tell her, "Mom, I’m an adult now. It’s my option whether or not to eat my peas.’’
She looks hurt.
I say, "Sorry. I’m a little depressed tonight.’’
"What’s wrong, Dad?’’ asks Davey.
"Well...it’s kind of complicated,’’ I say. "Let’s just finish dinner. I’ve got to leave for the airport in a few minutes.’’
"Are you going away?’’ asks Sharon.
"No, I’m just going to pick up somebody,’’ I say.
"Is it Mommy?’’ asks Sharon.
"No, not Mommy. I wish it could be.’’
"Alex, tell your children what’s bothering you,’’ says my mother. "It affects them, too.’’
I look at the kids and realize my mother’s right. I say, "We found out we’ve got some problems at the plant which we might not be able to solve.’’
"What about the man you called?’’ she asks. "Can’t you talk to him?’’
"You mean Jonah? That’s who I’m picking up at the airport,’’ I say. "But I’m not sure even Jonah’s help will do any good.’’
Hearing this, Dave is shocked. He says, "You mean...all that stuff we learned about on the hike, about Herbie setting the speed for the whole troop and all that—none of that was true?’’
"Of course it’s still true, Dave,’’ I tell him. "The problem is, we discovered we’ve got
two
Herbies at the plant, and they’re right where we don’t want them. It would be as if we couldn’t rearrange the boys on the trail and Herbie had a twin brother— and now they’re both stuck in the middle of the line. They’re holding everything up. We can’t move them. We’ve got piles and piles of inventory stacked up in front of them. I don’t know what we can do.’’
Mom says, "Well, if they can’t do the work, you’ll just have to let them go.’’
"It’s not people; it’s equipment,’’ I explain. "We can’t fire machines. And, anyway, what they do is essential. We couldn’t produce most of our products without these two operations.’’
"So why don’t you make them go faster?’’ asks Sharon.
"Sure, Dad,’’ says Davey. "Remember what happened on the hike when you took Herbie’s pack from him? Maybe you could do something kind of like that in the plant.’’
"Yeah, but it’s not quite that simple,’’ I say.
Mom says, "Alex, I know you’ll do the best you can. If you’ve got these two slow pokes holding everything up, you’ll just have to keep after them and make sure they don’t waste any more time.’’
I say, "Yeah, well, I’ve got to run. Don’t wait up for me. I’ll see you in the morning.’’

Waiting at the gate, I watch Jonah’s plane taxi up to the terminal. I talked to him in Boston this afternoon just before he was leaving for Los Angeles. I told him I wanted to thank him for his advice, but that the situation at the plant was impossible so far as we could see.
"Alex, how do you know it’s impossible?’’ he asked.

I told him, "We’ve only got two months left before my boss goes to the board of directors with his recommendation. If we had more time, maybe we could do something, but with only two months....’’

"Two months is still enough time to show an improvement,’’ he said. "But you have to learn how to run your plant by its constraints.’’
"Jonah, we’ve analyzed the situation thoroughly—’’

He said, "Alex, there are two ways that the ideas I’m giving you won’t work. One is if there isn’t any demand for the products your plant makes.’’

"No, we have a demand, although it’s shrinking as our prices go up and service deteriorates,’’ I said. "But we still have a sizeable backlog of orders.’’

"I also can’t help you if you’re determined not to change. Have you made up your mind to do nothing and let the plant close?’’
"It’s not that we want to give up,’’ I told him. "It’s that we don’t see any other possibilities.’’

"Okay then. Have you tried to take some of the load off the bottlenecks by using other resources?’’ he asked.
"You mean offloading? We can’t. These are the only two resources of their type in the plant.’’
He paused for a moment and finally he said, "All right, one more question: Does Bearington have an airport?’’
And so here he is tonight, walking out of Gate Two. He changed his flight to Los Angeles to make a stop here for the evening. I walk up to him and shake his hand.
"How was your flight?’’ I ask him.
"Have you ever spent time in a sardine can?’’ he says, then adds, "I shouldn’t complain. I’m still breathing.’’
"Well, thanks for coming,’’ I tell him. "I appreciate you changing your plans, although I’m still not sure you can help us.’’
"Alex, having a bottleneck—’’
"Two bottlenecks,’’ I remind him.
"Having
two
bottlenecks doesn’t mean you can’t make money,’’ he says. "Quite the contrary, in fact. Most manufacturing plants do not have bottlenecks. They have enormous excess capacity. But they should have them—one on every part they make.’’
He reads the puzzled look on my face.
"You don’t understand, but you will,’’ he said. "Now I want you to give me as much background on your plant as you can.’’

All the way from the airport, I talk non-stop about our predicament. When we reach the plant, I park the
Mazda
in front of the offices. Waiting for us inside are Bob, Lou, Stacey and Ralph. They’re standing around the vacant receptionist’s desk. Everyone is cordial, but as I make the introductions I can tell the staff is waiting to see if this Jonah guy—who bears no resemblance to any consultant they’ve ever seen walk through the door—really knows what he’s doing. Jonah stands in front of them and begins to pace as he talks.

"Alex called me today because you perceive a problem with the bottlenecks you’ve discovered in your plant,’’ says Jonah. "Actually, you are experiencing a combination of several problems. But first things first. From what Alex has told me, your most immediate need is to increase throughput and improve your cash flow. Am I right?’’

"That sure would be a big help,’’ says Lou. "How do you think we might be able to do that?’’
"Your bottlenecks are not maintaining a flow sufficient to meet demand and make money,’’ he says. "So there is only one thing to do. We have to find more capacity.’’
"But we don’t have the money for more capacity,’’ says Lou.
"Or the time to install it,’’ says Bob.
"I’m not talking about more capacity from one end of the plant to the other,’’ says Jonah. "To increase the capacity of the plant is to increase the capacity of
only
the bottlenecks.’’
"You mean make them into non-bottlenecks,’’ says Stacey.
"No,’’ he says. "Absolutely not. The bottlenecks stay bottlenecks. What we must do is find enough capacity for the bottlenecks to become more equal to demand.’’
"Where’re we going to find it?’’ asks Bob. "You mean it’s just layin’ around out there?’’
"In effect, yes,’’ says Jonah. "If you are like most manufacturers, you will have capacity that is
hidden
from you because some of your thinking is incorrect. And I suggest that first of all we go into your plant and see for ourselves exactly how you are managing your two bottlenecks.’’
"Why not,’’ I say. "After all, no one visits this plant and escapes without a tour.’’
The six of us put on the safety glasses and hats and go into the plant. Jonah and I head the column as we walk through the double doors into the orange light. It’s about halfway into second shift now and somewhat quieter than it is on day turn. That’s good because it lets us hear each other better when we talk. I point out various stages of production to Jonah as we walk. I notice Jonah’s eyes measuring the stacks of inventory piled everywhere. I try to hurry us along.
"This is our NCX-10 n/c machine,’’ I tell Jonah as we arrive at the big machine.
"And this is your bottleneck, correct?’’ asks Jonah.
"One of them,’’ I say.
"Can you tell me why isn’t it working right now?’’ asks Jonah.
Indeed, the NCX-10 is stopped at the moment.
I say, "Well... ah, good question. Bob, why isn’t the NCX-10 running?’’
Bob glances at his watch.
"Probably because the set-up people went on break about ten minutes ago,’’ says Bob. "They should be back in about twenty minutes.’’
"There is a clause in our union contract which stipulates there must be a half-hour break after every four hours of work,’’ I explain to Jonah.
He asks, "But why should they take their break now instead of when the machine is running?’’
Bob says, "Because it was eight o’clock and—’’
Jonah holds up his hands and says, "Wait a minute. On any
non
bottleneck machine in your plant, no problem. Because, after all, some percentage of a non-bottleneck’s time
should
be idle. So who cares when those people take their breaks? It’s no big deal. But on a bottleneck? It’s exactly the opposite.’’
He points to the NCX-10 and says, "You have on this machine only so many hours available for production—what is it . . . 600, 700 hours?’’
"It’s around 585 hours a month,’’ says Ralph.
"Whatever is available, the demand is even greater,’’ says Jonah. "If you lose one of those hours, or even half of it, you have lost it forever. You cannot recover it someplace else in the system. Your throughput for the entire plant will be lower by whatever amount the bottleneck produces in that time. And that makes an enormously expensive lunch break.’’
"But we have a union to deal with,’’ says Bob.
Jonah says, "So talk to them. They have a stake in this plant. They’re not stupid. But you have to make them understand.’’
Yeah, I’m thinking; that’s easier said than done. On the other hand...
Jonah is walking around the NCX-10 now, but he’s not just looking at it alone. He’s looking at other equipment in the plant. He comes back to us.
"You’ve told me this is the only machine of its type in the plant,’’ says Jonah, "But this is a relatively new machine. Where are the older machines that this one replaced? Do you still have those?’’
Bob says vaguely, "Well, some of them we do. Some of them we got rid of. They were practically antiques.’’
"Do you have at least one of each type of the older machines necessary to do what this X-what-ever-it-is machine does?’’ Jonah asks.
Lou edges in and and says, "Excuse me, but you’re not actually suggesting we use that old equipment, are you?’’
"If it’s still operational, then yes, I might suggest it,’’ says Jonah.
Lou’s eyes blink.
He says, "Well, I’m not sure what that would do to our cost profile. But I have to tell you that those old machines are going to be much more expensive to operate.’’
Jonah says, "We’ll deal with that directly. First, I just want to know if you have the machines or not.’’
For the answer, we turn to Bob—who chuckles.
"Sorry to disappoint you all,’’ he says, "but we got rid of an entire class of machine that we’d need to supplement the NCX-10.’’
"Why did we go do a dumb thing like that?’’ I ask.
Bob says, "We needed the floor space for that new pen to hold inventory.’’
I say, "Oh.’’
"It seemed like a good idea at the time,’’ says Stacey.