The Goal : A Process Of Ongoing Improvement
By Eliyahu M. Goldratt and Jeff Cox
Solution
Furnace
The heating furnace is being run at partial loads.
For utilization of bottleneck they took these steps.
- Ensure that the bottleneck is not processing defective parts
- Ensure zero defect based processing to minimize re-work & system impact cost.
- Implement the Red & Green Tag system.
Minimize the Batch Size
They minimized the batch size and get following major
advantages
- Reduce the total capital commitment used during production.
- Reduces the total time spent in WIP.
- Speed the throughput (Asset Turnover) also increase.
- Faster customer order fulfillment
- They minimize these four time components.
- Setup time
- Process time
- Queue time
- Wait time
Although the cost is increase apparently, but if we study
this change in depth than we realized that they are on a right track.
Market Expansion
Alex sits down with Jonah to talk about further market
expansion. Due to the improvements, the plant now has twenty percent additional
capacity available to fulfill demand. Jonah explains that Europe has many
potential customers, but the prices they demand are so low below the domestic market,
UniCo couldn't possibly take them without losing money. Alex points out that
when production is used from spare capacity, the only costs are the cost of the
materials and as such, any price above material cost represents profit.
Combined with an unbelievably short delivery time to shut out unimproved
competitors, Jonah has a deal in-pocket to ensure the future sales of the
plant.
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