Critical Chain - Eliyahu M. Goldratt [57]
Yes. We all knew it, but it's so easy to fall into the trap of the cost world.
"It's like what you've shown us about the steel mill," Charlene remarks, "measuring each work center by tons-per-hour."
"Precisely," Johnny nods. "The question is what to do instead? Look at that analogy, it might give you a clue."
We look. It doesn't.
"How can we prevent the spreading?" Johnny is not giving up on us.
Still not knowing the answer, I try to joke, "We can tie the soldiers to each other, with chains."
"That's the assembly line," Jim jumps up and starts to pace. "That's the conveyor belts of the assembly line."
I think about it for a second. "I don't get it," I admit.
"Me neither," says Jim, and sits down again.
Johnny draws chains between his funny soldiers. "What is the effect of putting chains?
"Look at the soldier before the bottleneck. By definition that soldier is faster than the bottleneck. So the chain between them is tight. Now this soldier can no longer move at his own pace; due to the chain, he is restricted to moving at the pace of the bottleneck. Spreading is prevented. Jim is right, an assembly line is a case where we use chains. The limited space of the conveyor belt serves as a chain. Look at it.
"Suppose that in an assembly line one work center is faster than the work center downstream from it. The conveyer belt between them will be full of products, the chain is tight. If that conveyor belt is full, our fast work center cannot continue to produce at it's own rate. It is forced to continue producing at the rate at which space becomes available on the conveyor belt. Which means, producing at the pace of the downstream work center."
"The same is true for Just-In-Time," Jim is saying slowly. "JIT doesn't use conveyor belts, it uses containers, of which a limited number are allowed to accumulate between work centers. It's exactly the same concept."
"Correct," Johnny agrees. "And we all know how effective assembly lines, or JIT are. Lead time under those methods is by far shorter than what we see in conventional production.
"So, what is the essence of these methods?" He continues to ask, "Why do they work so well?" And then answers, "All they've done is to put a cap on the amount of inventory they allow to accumulate between each two centers. Once the local inventory reaches its cap, the work center generating it is not allowed to continue producing at one hundred percent of its capability."
I understand, but something doesn't fit.
"Please wait," I ask him. "I'm trying to put my thoughts in order. Otherwise I don't have a chance of transferring what you are showing us in production to the project environment. Bear with me."
"Take your time."
"I'll tell you what bothers me," I say after a short pause. "In your colloquium you presented what I consider to be a generic process of five steps. If I followed you correctly, you claimed and proved that following these steps is not only beneficial, it's mandatory."
"Correct," Jim answers for Johnny.
"In my vocabulary, ‘mandatory' means that if you don't do it, good results will not occur."
I'm stuck. I cannot put my finger on what bothers me. Jim continues for me, "Now we see methods, the assembly line and JIT, that do work. Which means that either they follow the five steps or the five steps are wrong."
Thank you, Jim. Now I know how to continue. "It's apparent that assembly lines and JIT do not follow the five steps. Not only don't they start with identifying the bottleneck, they are not even considering the existence of a bottleneck at all. So where is the mistake in the five steps?"
Johnny looks at us, then at the board. Then he sits down.
"I don't follow you," Charlene says to Jim. "You talk as if it's all or nothing. What happens if JIT follows just one step? Won't it yield better results than a method that doesn't follow any?"
"It will," I agree. "But which of the five steps does JIT follow? It's apparent that it doesn't obey