H Throughput For Entire Plant example essay topic

The beginning of the book starts off with Alex Rogo's plant having major problems and his boss gets on his case about it. His boss, Peach, tells him he has three months to fix these problems or they would be shut down. Rogo has to find a way to improve efficiency in his plant and he is at a loss of how to do that. He thinks that because the plant has new robots that this automatically improves efficiency, right? Peach calls a special meeting at the headquarters for all the plant managers. Rogo does not know what the meeting is about ahead of time, but assumes it will be bad news about how the division's performance is horrible this first quarter.

Rogo see Nathan Sel win in the parking garage; he informs Rogo that if performance isn't improved by the end of the year, then the whole division goes up for sale. Rogo ends up leaving the meeting early because he realizes that this meeting is pointless and not helping his plant be more productive. A couple weeks before this meeting, Alex had run into an old friend, Jonah, in an airport lounge. He begins telling Jonah about his plant and the new robots, etc. Jonah does not seem impressed, but asks Alex some important questions such as: "h Have they really increased productivity at your plant? "h Was your plant able to ship even one more product per day as a result of what happened in the department where you installed the robots? "h Did you fire anyone? "h Did your inventories go down? Jonah's point was that if inventories have not gone down, employee expense was mot reduce, the plant is not selling more products, etc. then the robots have not increased the plant's productivity.

Jonah tells him that there is only one goal, no matter what the company. Jonah asks Alex what the goal is and Alex does not know. After Alex leaves the meeting, he remembers this conversation with Jonah and it makes him think a lot more about the situation his plant is in. The following enable a company to make money: "h cost-effective purchasing "h employing good people "h high technology "h producing products "h producing quality goods "h selling quality products "h capturing market share Alex finally figures out what The Goal is (I don't know how it took him so long! !) to make money (which is caused by being productive). To accomplish the goal of making money, there are three things that need to be increased simultaneously: 1. Net profit 2.

Return on investment (ROI) 3. Cash flow Family issues: I believe it is important for people to be able to have a separate family and work life. It becomes difficult during stressful times at work because then it will most likely effect the family time and life at home. It is important that workers learn to manage time enough to see their family. Stress at work causes neglect ion of family.

This then causes more tension at home to add to the already stressed out worker - one more thing to deal with. Alex definitely needs to learn how to treat his wife and kids better. He should refrain from making commitments (i.e. coming home from dinner or a date with his wife) if he is that stressed out at work and will not follow through with them. There are certain measurements that can be used to know if the plant is helping the company.

The following are three measurements that express the goal of making money, but permit you to develop operational rules for running a plant: 1. Throughput: the rate at which the system generates money through sales. 2. Inventory: all the money that the system has invested in purchasing things it intends to sell.

3. Operational expense: all the money the system spends in order to turn inventory into throughput. Everything in the plant is covered by these three measurements. A company must increase throughput while simultaneously reducing both inventory and operational expenses. All three of the definitions that Jonah gave Alex contain the word money.

Alex described it as one for incoming money, money still stuck inside, and money going out. The market determines the value of the product. Also, the price has to be greater than the investment in inventory and total operational expense per unit. Alex talks with Jonah again and decides to fly to NY to meet with Jonah. Jonah only has time to talk over breakfast with Alex. Some of the advice Jonah gives this time includes the following: "h A plant in which everyone is working all the time is very inefficient "h The only way to create excess inventories (they have TONS at the plant) is 'by having excess manpower' "h He asks Rogo how he should manage the capacity of his plant "h Balanced plant: where the capacity of each and every resource is balanced exactly with demand from the market.

No plant is actually a balanced plant: the closer you come to a balanced plant, the closer you are to bankruptcy. Mathematical proof that shows when capacity is trimmed exactly to marketing demands, no more and no less, throughput goes down and inventory goes through the roof (makes carrying costs / operational expense go up). There are two phenomena in every plant. The first is dependent events which is an event or series of events must take place before another can begin. The second, statistical fluctuation, is the variation from one instance to the next. These fluctuations average out over a period of time.

Most of the factors critical to running the plant successfully cannot be determined precisely ahead of time. Jonah leaves without giving Alex any more info - Jonah tells him that he has to gain understanding for himself in order to make the rules work. This last minute trip to NY causes problems once again with Julie. When Alex gets home, he tries to straighten out things with his wife.

Alex's son, Dave, wakes him up early Saturday morning because he is supposed to help with his Boy Scout camping trip. The trip ends up teaching Alex some valuable lessons that help him with the problems at the plant. There is a fat kid, Herbie, on the trip who ends up slowing the pace of the rest of the kids. The first kid in line sets the pace, and then everyone behind him - their speed depends on the speeds of those in front of them. Alex finally sees a resemblance that this hike is like a set of dependent events - in combination with statistical fluctuations. Each person is a fluctuation in speed; the ability to go faster is dependent on all others in front.

As Rogo is hiking he is thinking about this and how there is an accumulation of the fluctuations. Dependency limits the opportunities for higher fluctuations. Each boy is like an operation (in comparison to the plant) which has to be performed to produce a product. Each person is a set of dependent events. The amount of trail = inventory; whatever turns inventory into throughput (energy) = operational expense. If the distance between the first and last person keeps growing, it is like inventory is increasing.

During the break for lunch, Alex does an experiment using a pair of dice. He realizes that it is statistical fluctuations. Every time he rolls, he gets a random number that is predictable within a certain range (1-6). He makes it in to a game that the boys play using the pair of dice and matches (dependent event).

The number rolled determines how many matches get moved. Alex is trying to move matches from the box at one end through each of the bowls set up in succession. Dice represent of each resource. The bowls represent dependent events / stages of production. Each has exactly the same capacity as others, but its actual yield will fluctuate somewhat. He only uses one of the dice to keep fluctuations minimal.

Throughput is the speed at which matches come out of the last bowl. Inventory consists of the total number of matches in all of the bowls at any time. He assumes that the market demand is exactly equal to the average number of matches that the system can process. Alex keeps a chart which shows the data - it does reflect a balanced system. Throughput went down, inventory went up, and operational expense would have gone up if there had been carrying costs. Alex finally figures out that the slowest process (or Herbie on the camping trip) will determine the maximum throughput because all the jobs are necessary; on the camping trip, Alex finally puts Herbie in the front so that there are not any gaps in the line.

When Dave and Alex return from the camping trip, Julie is gone. She doesn't want to be found, but leaves it to Alex to tell the kids. Both of these adults are not handling the situation very well. He needs to definitely pay more attention to his wife - and kids. Being in college, we all know that we are dealing with school / classes, homework, working (some of us), and social lives (and most likely, working on our spiritual walk too). We are learning to balance different things and events in our lives.

Maybe it is on a smaller scale, but we are learning to decide what is important in our lives and there are certain priorities that we pick and choose. Alex needs to remember that his wife is important and does a lot for him. He is getting a dose of what it is like without her around now. This is what Noel brought up on his page (Noel Thompson).

With his work, he has not taken initiative to fix the problems he saw before his boss got on him and told him he has three months to fix these problems. When Hilton Smyth demands that his order be done by the end of the day, threatening to talk to Peach if it is not finished that day, Rogo gets his plant workers moving on the job. He looks at the numbers at the end of the day and realized that because the first two hours were below the quota necessary to finish the job, that meant that the station was behind the whole time. The maximum deviation of a preceding operation will become the starting point of a subsequent operation. Productive capacity depends on where it is in the plant. Resources at the end of the line should have more capacity than the ones at the beginning.

There are two kinds of resources in a plant that need to be distinguished: 1. Bottleneck resource: any resource whose capacity is equal or less than the demand placed upon it. 2. Non-bottleneck resource: resource whose capacity is greater than the demand placed on it. You do not balance capacity with demand. Balance the flow of a product through the plant with demand from the market.

The plant needs to always keep the flow a tiny bit less than demand because if market demand goes down, the plant will loose money. Use bottlenecks to control the flow through the system and into the market. Work center: any group of the same resources (i.e. 10 welders with the same skill = a work center). Jonah comes to see plant and try to solve problems. He tells them there are two reasons why his ideas would not work: 1. No demand for products (not the case here) 2.

They are determined not to change (again not the case) The two bottlenecks in the plant are not maintaining a flow sufficient to meet demand and make money. They need to find more capacity (increase capacity of bottlenecks only) and they need the bottlenecks to become more equal to demand). Things wrong that Jonah says to change: "h Bottleneck #1 is the NC-10 n / c machine "h It is not running while people are on break; the employees should go on break when it is running. "h The union is causing problems (the reason why it is not possible at the time). "h The machine is available for 585 hours a month, but the demand is greater than that - it will not be resourceful if you loose any of those hours. "h Throughput for entire plant is lower if that time is lost. "h Bottleneck #2 is the heat-treat "h The engineering department is unwilling to change; currently, the plant does not outsource to other vendors "h The plant thinks that it would increase the cost-per-part. For example: Each product shipped is about $1,000.1,000 units $1,000 = $1 million if parts get shipped as finished products.

They need to use external heat-treat (outsource). Also, quality inspection is currently done prior to final assembly. Defective items are lost time on bottleneck because it went through the machine and now is worthless. They need to do QC before bottleneck - that way, they will not loose time on bottlenecks on any defective parts - won't loose throughput. Also, they need to make sure the process controls on bottleneck parts are very good. The Goal By Eliyahu M. Gold ratt.