The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt
My rating: 4 of 5 stars
The goal talks though the conversion of a manufacturing plant which had been running using cost accounting and its embracing of Lean manufacturing. The way the book is presented is quite novel in that its presentation is as a story where you go on a journey with the plant manager as he faces being closed down.
Through the course of the book Kanban is presented and applied to the plant. The book covers things such as challenging the productivity views of robotics, showing how the entire productivity of the plant is dictated by its bottlenecks, that you need excess capacity and you can’t run everything at 100% without building up large amounts of inventory which may or may not be sold.
The production line approach, made famous by Ford for the production of cars, was an extremely efficient form of production because of the flow of work but for such a system you need large volumes to warrant a dedicated line. The aim of lean manufacturing is to take the idea of flow and apply it in environments where the volumes are not sufficiently large to warrant their own production line.
Flow is key to shipping products to costumers – the key is to reduce the time from when a customer places an order to the point where we get the money for it.
This does not work with traditional local optimisations. This usually means large batch sizes since the set up of the machine is likely to be significant and traditionally people then try to produce as much of the parts as possible from the single set up. This results in large amount of in progress inventory which adds no value in its current form. Additionally the larger the batch the longer the parts need to wait – 99% of the lead time to produce a product can just be it waiting to be processed. To facilitate flow it is key that the focus on these machines is to improve the the efficiency of the set up time so that the machine is able to produce smaller batches which reduce the amount of over produced inventory and the waiting time thus reducing costs and lead time.
When there is an issue with flow inventories accumulate and the order lead time increases and reduces bussiness cash flow. One way to improve flow is by limiting space, this prevents the building up of large inventories. This is counter to previous approaches since limiting space means that not every worker will be busy all of the time, only bottlenecks will have the high levels of utilisation. By stopping people work it quickly highlights any issues in the flow and these can then be resolved. This means that the focus is always of making the bottlenecks more efficient – which is key since any time lost at a bottleneck will impact the output/productivity of the entire site. Things such as putting quality control before the bottleneck will improve the throughput since the bottleneck won’t work on parts which will be rejected later. Ensuring the bottleneck is able to run none stop, such as by splitting breaks so that people can cover it continuously.
The challenge of small production quantities and small buffers is that gridlock could happen where parts are not available for assembly when the space is already filled up. A solution for used in Kanban is instead of restricting buffer space between manufacturing steps the amount of products which can be produced are. The Kanban system uses the idea that when you want to ship something to the customer this triggers all of the preceding steps required to manufacture the product. The way this is achieved is through the use of cards, these cards are passed from the end of the production line towards the beginning each one triggering the manufacturing of the parts required to produce the product which is trying to be constructed.
Lean can not be applied to all industries, because of the time it takes for Kanban to produce an efficient manufacturing process it only works for products which do not change for a significant period of time – this works better in a car plan where new models are only released once a year. Additionally Lean does not work where the products are produced sporadically – because of the buffers the product needs to be being produced on a continuing basis. Lean also only works where the mix of products being produces are fairly consistent. Any of these three will reduce the effectiveness of lean.