The Goal Text

autocratic management style

(ch 1-12) a management style in which manager often makes decisions unilaterally and closely supervises employees to make sure they do things his or her way.

persuasive management style

(ch 1-12) a management style in which manager takes time to convince employees of benefits of doing things his/her way

negative

(ch 1-12) according to Jonah's 3 measurements, did the robots have a positive or negative effect on the plant?

-throughput goes down -inventory goes up -operational expenses increase due to the increase in inventory carrying costs.

(ch 1-12) according to Jonah, what happens when you try to run a balanced plan?

-dependent events -statistical fluctuations

(ch 1-12) according to Jonah, why is it impossible to run a balanced plant?

balanced plant

(ch 1-12) an operation in which capacity exactly equals market demand.

management style

(ch 1-12) characteristic was a person makes decisions and relates to his or her subordinates.

yes

(ch 1-12) could Jonah's three measurements apply to a service business?

The Peter Principle

(ch 1-12) everyone eventually rises to their level of competence and then stays there

-Net Profit -ROI

(ch 1-12) how do accounting and financial professionals typically measure it?

inventory

(ch 1-12) one of Jonah's three measurements. all the money that a system has invested in purchasing things which it intends to sell

operational expense

(ch 1-12) one of Jonah's three measurements. all the money that a system spends in order to turn inventory into throughput.

throughput

(ch 1-12) one of Jonah's three measurements. rate at which a system generates money through sales

-throughput -inventory -operational expense

(ch 1-12) what are Jonah's 3 measurements?

-productivity -efficiency and quality

(ch 1-12) what operational measures does Alex's division use?

sales revenue delayed or lost?

(ch 13-21) according to Jonah, what is the true cost of work-in-process inventory created by a bottleneck?

bottleneck

(ch 13-21) any resource whose capacity is equal to or less than demand placed on it

-dependent events: hikers must walk in a single file -statistical fluctuations: some hikers walk faster or slower than others -observable out come: hikers keep getting spread out on the trail

(ch 13-21) during the weekend hike, what are the dependent events, statistical fluctuations and observable outcome?

-work on overdue orders first

(ch 13-21) how do you prioritize bottleneck work?

associated cost of labor, materials, and overhead

(ch 13-21) how is the work-in-process inventory created by a bottleneck traditionally valued?

product flow

(ch 13-21) in a balanced plant, should market demand be matched with capacity or product flow?

dependent events

(ch 13-21) one or more events that must take place before another event can begin

capacity of bottleneck

(ch 13-21) the capacity of the plant is equal to....

product flow matches market demand

(ch 13-21) throughput is increased when....

matches demand due to impact of dependent events and statistical fluctuations

(ch 13-21) throughput is reduced when capacity.....

balance flow of orders through bottlenecks with market demand

(ch 13-21) understanding importance of bottlenecks and product flow, what should operations management's primary goal be?

statistical fluctuations

(ch 13-21) values, such as completion time, that we cannot precisely predict and which will always vary

-the presence of dependent events results in statistical fluctuations accumulating. -to avoid the problem, let the slowest resource drive pace of process. -to improve performance of the process, lighten burden on slowest resource.

(ch 13-21) what 3 things did Alex learn from the hike?

-reduce lost time increase productivity -offload heat treating redesign work system -move quality control change production process -bring back old machines change production process

(ch 13-21) what 4 things reduce impact of bottlenecks and find hidden sources of additional capacity?

-NCX-10 CNC Machine -Heat treating department

(ch 13-21) what are the 2 bottlenecks at Alex's plant?

impact is evidenced by reduced plant output and increasing work-in-process inventory

(ch 13-21) what did the match game teach Alex about cumulative impact of statistical fluctuations on operations?

bottlenecks increase work-in-process inventory

(ch 13-21) what do bottlenecks increase on the shop floor?

-productivity goes down -unit costs go up *throughput goes up or product flow goes up

(ch 13-21) what impact does the use of old machines have on productivity and unit costs? why is this not an issue for Jonah?

impact on flow of product/orders through plant

(ch 13-21) why are bottlenecks important?

nothing

(ch 22-33) -what were employees expected to do when not setting up for NCX-10 or working in heat treating?

capacity could be increased by: -splitting and mixing batches -using interchangeable tables

(ch 22-33) Alex followed up in person to see what was really happening in heat treating. what did the third shift foreman suggest? (2)

output rate of bottlenecks to which output rate of all other resources should be synchronized

(ch 22-33) Alex's kids came up with an idea for managing product flow using a drum and rope approach. using this approach, what's the drum?

work release process that ensures orders or jobs arrive at bottlenecks just when they are needed

(ch 22-33) Alex's kids came up with an idea for managing product flow using a drum and rope approach. using this approach, what's the rope?

no; costs, efficiency, productivity

(ch 22-33) Hilton Smyth and the Auditors arrive. Did the decision to cut lot/batch sizes have a positive or negative impact in their eyes? what was their judgement based on?

went up; plant created problem by focusing solely on output rate of individual resources rather than product flow through the entire plant

(ch 22-33) Plant began using colored tags to prioritize work on items for bottlenecks. -Tag system was improved using gold tape. with the new tag system and increased capacity, what happened to the number of bottlenecks? what was Jonah's explanation for this?

non-bottleneck resource whose scheduling is critical to utilization of bottleneck resources

(ch 22-33) Stacy has identified something she refers to as capacity constraint resources. What are CCRs?

negotiation, yes

(ch 22-33) after reducing lead times, orders may become a bottleneck. to avoid it, Alex asks customer to modify his order in terms of quantity and timing? can a supplier really know better what a customer needs than the customer does?

-schedulers constantly preview work awaiting processing at the bottlenecks looking for holes. -holes indicate that the CCRs are not processing work for the bottlenecks in the correct sequence to insure that is it available when needed *by changing schedule or sequence of work being processed by the CCR changes were made not to today's schedule, as done in the past, but the schedule several days out.

(ch 22-33) how did Stacy's department use a knowledge of CCRs to better manage product flow? (2) *how did schedulers fix those holes? why did these schedule changes not impact flow?

make it harder

(ch 22-33) how do dependent events impact efforts to manage or improve product flow?

goes down

(ch 22-33) if product flow of operation is improved, what will be impact on operational expenses

goes down

(ch 22-33) if product flow of operation is improved, what will be the impact on inventory?

goes up

(ch 22-33) if product flow of operation is improved, what will be the impact on throughput?

upstream operations can starve bottlenecks. buffer

(ch 22-33) in managing CCRs, schedulers learned that... to address this issue, what was added to the drum and rope approach to managing flow?

inventory or time that insures constraint is never starved by upstream operations and downstream operations are protected from the constraint

(ch 22-33) in the drum-buffer-rope approach to scheduling, what is the buffer?

bottleneck or constraint to which operations are synchronized to ensure its effective use

(ch 22-33) in the drum-buffer-rope approach to scheduling, what is the drum?

process for releasing work into the operations to ensure that work is on-hand at the constraint when it is needed

(ch 22-33) in the drum-buffer-rope approach to scheduling, what is the rope?

product flow; differing rates interrupt product flow

(ch 22-33) like cycle time. rate at which orders move through an operation. what is the impact on product flow of differing rates of output for different types of resources?

queue time

(ch 22-33) one of the four time elements of a job. time job spends waiting for a resource that is working on something else to be available.

setup time

(ch 22-33) one of the four time elements of a job. time job spends waiting for a resource to make ready or prepared to process it.

wait time

(ch 22-33) one of the four time elements of a job. time job spends waiting for arrivals of items needed by a resource to process or complete a job

process time

(ch 22-33) one of the four time elements of a job. time required to actually process a job

buffers

(ch 22-33) small amounts of inventory or time used to insure bottleneck is never starved or idle

-supplement NCX-10 using older machines. -increased staffing by adding setup crew for NCX-10 and dedicated crew in heat treating. -to improve department's performance, plant started collecting data on heat treating. -Alex followed up in person to see what was really happening in heat treating. -Plant began using colored tags to prioritize work on items for bottlenecks. -Tag system was improved using gold tape.

(ch 22-33) the quest of bottleneck capacity includes what 6 things?

cutting current production lot sizes in half; Economic Production Quantity (EPQ)

(ch 22-33) to achieve Peach's demands of wanting evidence that results will continue and an additional 10-15% improvement, Jonah recommends... current lot sizes set using a method referred to as Economic Batch Quantity (EBQ) which is another name for

mad

(ch 22-33) to improve department's performance, plant started collecting data on heat treating. what was the department manager's reaction?

-process time -setup time -queue time -wait time

(ch 22-33) what are the four time elements of a job?

-reducing current lot or batch sizes will reduce one or more of time elements of a job. -reducing a time element will reduce total job time and shorten lead time for new orders

(ch 22-33) what does Jonah hope to accomplish by increasing product flow and reducing lots/batches?

appreciation

(ch 22-33) when work is dirty, boring and/or unattractive, how do you motivate people to perform it well?

they have a negative impact on throughput if they do not process jobs in correct sequence

(ch 22-33) why are CCRs important?

theory of constraints

(ch 34-40) a chain is only as strong as its weakest link

constraint or bottleneck

(ch 34-40) any resource which has a capacity equal or less than the demand placed on it

-equipment -people -policies -practices

(ch 34-40) what are four examples of internal constraints

-market demand -product life cycle -consumers' preferences and interests

(ch 34-40) what are three examples of external constraints

Chapter 12

Focuses on his relationship with his wife, promises to spend the weekend with her

Chapter 11

Jonah confirms their problems can be fixed in 3 months Jonah says, "A plant in which everyone is working all the time is very inefficient." Jonah says the closer to a balanced plant, the closer to bankruptcy Jonah says to consider dependent events and statistical fluctuations

Chapter 18

Jonah teaches Alex about bottlenecks: Bottleneck: A bottleneck is any resource whose capacity is equal to or less than the demand placed upon it. Non-Bottleneck: A non-bottleneck is any resource whose capacity is greater than the demand placed on it. Jonah explains that Alex should not try to balance capacity with demand, but instead balance the flow of product through the plant Alex & his team find the plant's bottlenecks and work on ideas to improve it like the slow kid in the hiking line their machines NCX-10 and their furnace are the bottlenecks

Chapter 17

Jonah tells his team about what he learned hiking and applies it to complete an overdue order

Chapter 19

Jonah visits the plant and points out bottlenecks Jonah shows them how to increase productivity by increasing it at the bottleneck's locations Relates bottleneck downtime with the loss of throughput Every minute of downtime at a bottleneck translates into thousands of dollars of loss throughput, because without the parts from the bottleneck, you can't sell the product.

Chapter 3

Mr. Peach holds a meeting Division closes in 1 year if they don't improve Peach wants to set new goals and work to achieve them

Chapter 20

Alex creates a priority chart of overdue orders and instructs the bottlenecks to work on them from latest to earliest

Chapter 9

Alex forms a group (Bob, lee, Stacy) and they plunge into the basic nature of each element of the plant and categorize them according to the three figures They discover the robots increased costs, operational expenses, and therefore were less productive

Chapter 23

Alex hires foremen One of these employed foreman comes with the idea of mixing of the priority of the orders in order to match the production of its parts. This new method hiked the production by 10%

Chapter 5

Alex leaves the meeting at break time Alex realizes that money is the goal and everything else are just means to achieve the main goal

Chapter 14

Alex plays a game with dice called the Match bowl experiment with the hikers. Alex realizes the effects of bottlenecks and learns that balanced plants aren't ideal Dependent events and statistical fluctuations tend to pull down the throughput for each day, and the operational expenses as well the cost of inventory increase

Chapter 15

Alex puts slowest hiker in front and reduces his weight to increase productivity

Chapter 4

Alex reflects on meeting Jonah Jonah tells him he's running an unproductive plant predicts high inventories and low shipping rates Jonah tells him to figure out the GOAL of every company

Chapter 2

Alex rogo is from bearington and his wife hates it Machine employee quits job Machine breaks down Forced to use employees from different areas of the plant Order 41427 gets shipped

Chapter 8

Alex talks to Jonah again and learns that he learns 3 terms to run his plant: Throughput: The rate of sales Inventory: the $ invested in their products Operational Expense: the costs associated with converting inventory into throughput

Chapter 6

Alex talks to Lou (plant controller) about how to achieve the goal of Money Net profit needs to increase along with simultaneously increasing return on investment and cash flow.

Chapter 13

Alex went hiking with his son and notices their walking line spreading and closing and relates that to statistical fluctuations and then states that the dependent events of each scout cause them Even if there were no limits, the last event must make up for all the others for all of them to average out

Chapter 10

Alex's staff make their own definitions of: Throughput: $ coming in Inventory: the $ currently inside the system Operational Expense: $ we have to pay to increase throughput They make a plan to meet with Jonah in NY

Chapter 7

Decides to stay with the plant Decides he needs to find Jonah again

Chapter 1

The plant has to finish order 41427 by the end of the day Plant already laid off half their employees Plant has 3 months to improve or they close losing 600 more jobs

Chapter 22

They fulfill 12 overdue orders They bring in an old machine to aid the NCX-10 bottleneck

Chapter 21

They institute a tagging policy on parts to be worked on Red tags for bottleneck parts to be worked on first as to not hold up the bottleneck machine, and green for the non-bottleneck parts.

time

for Julie and Alex, what was the constraint in their relationship?

Chapter 16

his wife leaves him and leaves children

gave common goal, active part of it

how did Alex motivate his management team at the plant to work together? how did he promote collaboration and cooperation between functional areas?

-process batch size is equivalent to EPQ which minimizes inventory holding and setup costs -transfer batch size is set to maximize product flow and utilization of constraints

in terms of lot size, what is the difference between a process batch and a transfer batch?

transfer batch

theory of constraints stresses use of _____ _____.

what to change? -core problems in complex situations what to changeto? -solutions that solve core problems without creating new ones. how to change -building enthusiasm and overcoming resistance to accomplish change smoothly

what are the 3 basic questions every manager should learn to ask

-identify the system's constraint. -exploit the constraint (maximize its use) subordinate everything to the constraint. -elevate/overcome/eliminate the constraint -repeat process for next constraint to continue process improvement and avoid inertia

what are the 5 steps in the theory of constraints process of improvement?

increased throughput reduced inventory lower operational expenses

what are theory of constraints' three benchmarks of success?

there is only a limited number of constraints. if unlimited, system is completely dysfunctional.

what does theory of constraints assume about the number of constraints in any system? if unlimited, system is....