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(+)+(+)
(+)+(+) S.M.I.L.E(sm)
(+)+(+)
(+)+(+) Setup Minimization Improves Line Efficiency
(+)+(+)
(+)+(+) The Quick Changeover e-letter
(+)+(+)
(+)+(+) Published monthly by Changeover.com
(+)+(+)
(+)+(+) Written by John R Henry, CPP
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### AUGUST 2004
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SOME THOUGHTS ON...
WHO'S YOUR HERBIE?

This month I want to recommend a novel. It has a little of everything. Some
romance for those who like that sort of thing. Drama for those who like
that. A happy ending for others. And for everyone involved in any area of
manufacturing, lots of good information that will help you run more
efficiently.

The book is "The Goal" by Eliyahu Goldratt. If you have not read it yet,
you need to order it immediately. Once you get it, you need to read it at
least once but probably 2-3 times to make sure you capture all the
information in this excellent book.

The hero of the book, Alex Rogo, is plant manager of large job shop making
an unidentified products using typical metalworking processes. The plant is
losing money and he has been told that it will be closed in 3 months if
they can't get it under control. Alex has a chance meeting with his old
physics teacher, Jonah, now a business consultant who, though he has very
limited time, agrees to help. He does this by asking Alex questions, not
supplying the answers and then letting Alex and his staff puzzle it out.

The first question he asks is: "What is the goal of the plant?" That seems
like a pretty basic question but have you ever thought what the goal of
your plant it? Do you have it clearly defined? For 20 years, on the first
night of many of my classes, I would ask my students what the goal of the
normal business enterprise was. Some of the answers I got were pretty
amazing. Businesses do not exist to provide jobs. They do not exist to
produce products. They do not exist to capture market share. One student
told me they existed to keep him out of the house and away from his wife
during the day. I accepted that as tongue in cheek. Businesses exist for
one reason and that is to make money for their owners or shareholders. By
doing this, and only by doing this, they are able to to provide all the
other things that we count on them for. Alex, for the first time, was
forced to really think about this and realized what he needed to
concentrate on to save his plant.

The next question Jonah asks Alex is how he can maximize the amount of
money he makes for the shareholders? Of course readers of this newsletter
will have heard me say, more than once, that measurement is key to
obtaining results. "If you can't measure it, you can't control it." Jonah
gives Alex some tools and then lets him and his staff ponder through the
implications. Basically, it boils down to a need to increase throughput
while holding costs and inventory constant or, better yet, reducing them.

So now Alex has to figure out how to increase throughput and he does it by
identifying bottlenecks in the process flow and then attacking them. This
turns out to be the key to maximizing profitability. In the book, the
bottlenecks are a couple of machines and they figure out ways to maximize
their throughput. However, they also realize that the bottlenecks do not
necessarily have to be in the process. They can also be external. If
marketing does not sell enough product, throughput will suffer. This
realization leads them to change their terminology from "bottleneck" to
"constraint" and brings us to the subtitle of the book, "The Theory of
Constraints".

The above is a gross oversimplification and I am afraid that I have not
done justice to an excellent book. I only hope that I have whetted your
curiosity enough that you will buy the book and read it.

You can also find much useful information on Dr. Goldratt's websites at
www.goldratt.com and

Oh, by the way. I can hear some of you asking: "Who is the "Herbie" of this
essay title? In the book, Alex takes his son and Boy Scout troop on a 10
mile hike. Herbie is an overweight, slow, kid who acts as a constraint on
the troop as a whole. Alex compares the line of scouts with different
hiking speeds to a production line. Herbie is the constraint on the hike.
Alex experiments with different ways of minimizing his negative impact and
realizes what he needs to do to improve his process.

So, To return to the title, Who's the Herbie in your plant? Where is the
constraint or bottleneck in your process?

More importantly, what are you going to do about it?

For more information or to buy the book, visit
http://www.amazon.com/exec/obidos/ASIN/0884270610/changeovercom-20

TIP OF THE MONTH...

PROCESS TRICKS AND TIPS NEWSLETTER

I have not personally evaluated VATSCORP's productivity software. However,
some of it may be of interest to readers here and you can check it out here
http://www.vatscorp.com
They also publish a free Process Tricks and Tips Newsletter which I have
been finding very interesting. Lots of ideas that you will find useful. You
can subscribe here
http://www.vatscorp.com/pages/landingpage.asp

Happy reading!

John Henry CPP