The Goal Summary of Key

The Goal Summary of Key Concepts in Chapter 15 - 40

Chapter 15 . Linear dependences directly influence all aspects of the Theory of Constraints TOC), including workflows velocity and accuracy. . Creating parallel processes and workflows, each with its own TOC-based model and set of independent factors, will operate more efficiently than a single constraint-based workflow. . Definition of the linear dependency of two or more variables, and the behavior they exhibit specifically around the fluctuations of the variables will be related to the maximum deviation as defined by the previous variables. Goldratt, in using the example of the Scout Troop and its march, graphically illustrates this concept. Chapter 16 . Main protagonist of the novel, Alex, arrives home to find a note from his wife. She has left him as she felt like the "last in line" for him. The irony is too great to ignore in this instance as Alex must now contend with not only running a plant, but also now a household. . From a theoretical perspective, an entirely new set of constraints is now applied to Alex's life. He will now have to attempt to optimize not only his performance and roles but his departed wife's as well. Chapter 17 . Alex introduces the linear dependencies into the plant and initially doesn't get a reaction. With a rush order from a major customer who threatens escalation to his boss (Peach), Alex immediately begins defining the rate of progress of Pete's people (production Group) versus Robot (second production group) . Strategy using dependencies analysis begins to work given the baseline figures of performance between groups being used as the foundation.

Chapter 18 . Data warehousing and data mining introduced as a strategy for managing the thousands of variables that can impact a constraint model. Data warehousing specifically mentioned as the basis for creating constraint models. . Definition of constraints as bottlenecks in serially-based processes. Goldratt defines a bottleneck through the character Jonah as ""A bottleneck is any resource whose capacity is equal to or less than the demand placed upon it."A non-bottleneck is any resource whose capacity is greater than the demand placed on it. . Use of TOC for optimizing the flow of products through the plant is introduced as a manufacturing strategy over the previous strategy of just trying to balance supply and demand. Chapter 19 . Use of constraint modeling at the plan to find resource conflicts illustrated as bottlenecks, not as insufficient resources to meet demand. Process-centric approach to defining the workflow. . Valuation of process workflows on a per hour basis shows the economic impact of bottlenecks. A severe bottleneck would cost $1.6M with the entire plant down. The team calculates that there are 585 hours per month, and given costs per hour for the X Machine being $32 per hour and $21 per hour for heat treat, even one hour lost to down time equates to a loss of $2,735. . Valuation of downtime and bottlenecks serves as the foundation for Net Present Value (NPV) calculations and financial analysis of TOC strategies later in the book. Chapter 20 . Using business process management (BPM) and Business Process Reengineering (BPR) techniques, initial bottlenecks in the factory are alleviated. . TOC applied to BPM and BPR, in addition to further proof of valuation bottlenecks having a significant impact on plant profitability. Chapter 21 . Application of TOC concepts for modeling how to re-route production through bottlenecks. Manually-based process of applying red and green tags is used to define the priority of which products are to be routed through the bottleneck machine first. While manual and simplistic, the approach helps alleviate bottlenecks throughout the production workflow. Chapter 22 . Prioritization of products by their elapsed time and level of congruence with bottleneck machines is working. The red and green tagging is increasing production significantly. Twelve units arte produced during the week that elapses during this chapters' timeframe.

. Beginnings of using TOC as a routing and production strategy shows potential for overcoming bottlenecks by a simple approach to defining which products go through which process - the beginnings of process optimization - however rudimentary and manual - first appears in this chapter. Chapter 23 . Becoming process-centric by product area instead of being entirely focused just on product lines has increased productivity significantly. The use of resource balancing between bottleneck systems and non-bottleneck systems and their associated teams introduces production expertise as another variable in the TOC equation. Varying production expertise across bottleneck and non- bottleneck systems by staffing expertise in turn increases overall on time performance. Chapter 24 . The process workflows become more efficient, with the production center shipping more products on time. Linear dependency again becomes an issue, this time with the inventory reduction occurring. The reduction in inventory positions shows in turn a lack of optimization for inventory turn velocities and inventory management. Chapter 25 . Another example of linear dependency occurs as the bottlenecked products become more efficiently produced, forcing a backlog of non- backlogged products. This requires Alex and Jonah to create a balanced optimization strategy for ensuring both bottlenecked and non- bottlenecked systems production. The use of a multi-constraint model to manage these two processes is planned. Chapter 26 . Use of computer-based optimization for scheduling of bottleneck parts, including the interpolation of constraint-based dependencies with non- bottlenecked parts. Through the use optimization techniques created in software, both processes, both bottleneck and non-bottleneck, are synchronized as the company seeks to find the optimal balance of production across each manufacturing process. Chapter 27 . Evaluation phase of the TOC modeling for the factory, with Mr. Peach setting a new performance objective of 15% process improvement for the next month. Parallel story line details what the goals of Alex's marriage are, as his wife searches for meaning in the relationship. Chapter 28 . Just-In-Time (JIT), Vendor-managed Inventory (VMI) and lean sourcing all are prevalent in this chapter as the effort is made to cut batch sizes in half with all suppliers. Also the concepts of strategic sourcing and supplier relationship management also are introduced and used extensively. Alex scrambles to alleviate the inventory positions becoming larger through these strategies, and faces the challenge of increasing performance 15% in a single month to keep the factory open.

Chapter 29 . The critical concept of Collaborative Planning and Forecasting (CPFR) with a customer who requests one thousand products in two weeks coupled with lean manufacturing concepts and the development of optimum manufacturing workflows overall. These three concepts are combined, and the forecast is defined initially from a production constraint standpoint of being 250 units per week. Chapter 30 . Goldratt relies on this chapter to show the variation in reporting systems that show a high level of variation in results, in addition to the concept of manufacturing auditing. Internal key performance indicators (KPIs) show a 17% increase while auditors report 12.8%. This is an example of how even in organizations where TOC and lean manufacturing, in addition to forecasting all work together to fulfill orders on time, there is still significant room for improvement in terms of reporting methodologies and approaches. Chapter 31 . Alex gets promoted to Mr. Peaches' position primarily for his ability to both provide valuation of business process improvements, process re- definition of manufacturing processes, all culminating in significant improvements in manufacturing and cost controls. The combination of TOC, CPFR, lean manufacturing, and BPM all have been successfully combined into a higher level of sustained performance. Chapter 32 . Leadership and change management get introduced as key concepts, including the ability to lead change in major manufacturing operations. Bringing permanent change into an organization is also presented. Chapter 33 . Change management and the ability to create small, effective team at the plant level are key concepts and lessons learned in this chapter. The need for synchronizing plant-level requirements and divisional plans is illustrated in this chapter as well. Chapter 34 . Change management strategies and the ability to instill ownership for the process changes at the manufacturing level are presented in this chapter. More insight into the complexities of bringing change at the divisional level, in addition to the development of a core change management and leadership team is also shown. Chapter 35 . Leadership and the creation of organizational structures, and the need for creating organizational change management teams that can capitalize on structures is critical. Finding a foundation for change and then capitalizing on it is the key message of this chapter. Making lean manufacturing for example a core part of the company culture is also shown. Chapter 36 . One of the most critical aspects of the book is presented in this chapter. The process is as follows: . Step one: Identify the system's bottlenecks . Step two: decided how to exploit those bottlenecks . Step three: subordinate everything else to step two decisions . Step four: evaluate the systems bottlenecks . Step five: If a bottleneck is broken during this process go back to step one and begin again. . This process is shown to be applicable to the many different areas of the divisions and the overall areas of change most needed, including suppliers and customer relationships. Chapter 37 . After finding the five-step process in the previous chapters' lessons learned the team experiments with the steps and creates a revised set of steps: . Step one - identify the systems constraints including all bottlenecks and all variables including in the constraint model . Step two - define strategies for how to cope with, overcome, and capitalize on constraints within the model . Step three - take all tasks to step two decisions . Step four - evaluate all systems constraints and look to quantify them . Step five - If in the previous steps a constraint was encountered, then broken, the process needs to go back to Step One. . The team finds for the first time that they can use synthetic orders to overcome bottlenecks and increase capacity as a result. Doing these bottlenecks with synthetic orders increases capacity by 20% initially due to greater clarification of bottlenecks. Chapter 38 . Excess capacity can be filled with orders for Europe, yet first there needs to be a more accurate job of completing forecasts through the use of CPFR, lean, Kanban, and a better sense of what is happening with suppliers. Specifically what needs to happen is that there needs to be better coordination with suppliers, both between them and among them, to ensure that all supplies required to fulfill the orders from Europe. The coordination of demand with the customer, the focus on keeping the process optimized, and ensuring suppliers are coordinated with are critical. Chapter 39 . New orders are quickly taken from Europe as there is excess capacity in the factories and forecasting forces an inventory build-up in front of bottlenecks. This becomes a major issue, and also forces the company to push deliveries out to four weeks from two weeks. Collaborative forecasting and inventory planning continues with the customer to make sure they are fully informed as to the delay. Chapter 40 . Change management from both a production process and personnel management standpoint are now the critical concerns, and the lessons learned specifically in the areas of defining core business process change are also evaluated.