VELOCITY - DEE JACOB [43]
“The trouble is, Mr. Reese, I rarely see a customer in here. Certainly not on a daily basis. I have no way of knowing whether they are satisfied and no way to measure their delight. So I just keep my eye on the dollars.”
“How do you know … ?”
“How do I know what the numbers are? I use a computer. I look them up. By the way, there are two other key measurements that are very important. There is operating expense – money spent on payroll, maintenance costs, and so on. And there is what I call inventory and investment. For the short term, inventory is the one that is important. Inventory, as a set of numbers, includes all of our raw materials and work-in-process – all the money that we intend to transform into throughput. Investment, of course, is capital – money that buys equipment and other assets that enable us to turn inventory into throughput. Are you following me, sir?”
Wayne shrugged his shoulders. “Sort of.”
“It is the relationship between those measurements that tells me how well we are doing. Over time, I want to see throughput go up. That is, I want to see increases in the rate at which we are turning inventory into completed sales. I also want the amount of inventory that is needed inside my plant here to be only what is sufficient to service the primary constraint at all times. And I want our operating expenses to become lower and lower relative to the money being made in throughput. Finally, I do not want to see the level of required investment in machines and so on increase. In other words, I always want to be striving to do more with less.”
Puzzlement was all over Wayne’s face, and he said, “Well, if I understood you correctly, that’s not at odds with Lean. Tell me, where did you come up with all this?”
“From a book. A novel, actually.”
“A novel? What was the name of it?”
“It was called The Goal. Written quite a while ago by two guys … I forget their names.”
“The Goal. I’ve heard of it; never read it,” said Wayne.
“Anyway, our former president, B. Donald Williams, sent a copy to me years back when we were having a lot of inventory and expediting problems here at Oakton. After I read it, B. Don and I put our heads together and figured out that the bottleneck – the ‘Herbie,’ which you would understand if you read that book – was this piece of equipment we call Godzilla. And once we realized that and exploited the constraint–”
“Exploit the constraint?” asked Wayne, staring with incredulity at Murphy.
“Yes, sir. You see, you must exploit the constraint and make all other processes subordinate to it–”
“All right, Maguire,” said Wayne. “I don’t think we’re getting anywhere with this conversation. Why don’t you show me this problem operation, this Godzilla, whatever it is.”
“It is not a problem operation! I assure you of that, sir!”
The two men strolled down the aisle together, along the M57 Line and through Lamination, past the curing racks and the staging area where batches were made up. And eventually they came to stand before one of the biggest, and one of the ugliest pieces of equipment that Wayne Reese had ever encountered in a manufacturing plant.
“This,” said Murphy, “is Godzilla.”
“Well, it sure is a monster. How could something that big be a constraint?”
“Because of time, Mr. Reese. Time within the overall flow. That is why we subordinate all other processes to Godzilla. Because the productivity of the ’Zilla determines the productivity of the entire production system – and so determines our throughput.”
Wayne was barely listening.
“Okay, I think I kind of see what’s been going on here,” he said to Murphy. “Look, I don’t know what you’ve read or what kind of coping mechanisms you’ve used in the past, but I promise you that Lean will be a much more elegant solution to all the issues you have raised. Trust me, Lean and Six Sigma are going to solve all your problems and revolutionize this plant. Once we apply LSS, this plant is going to be tight as a drum. Variation on all processes is going