I’m a big fan of Eliyahu M. Goldratt, especially his Theory of Constraints (TOC) and his work on bottleneck management. Goldratt revolutionized the manufacturing world with a critical insight into the overall operation of the plant floor. Before Goldratt, local efficiency was the key metric used to measure performance on the shop floor.
Imagine that a factory had 10 workstations, each with a specific job in the manufacturing process. At one time, management believed that if each machine was running close to 100 percent of the time then the factory would be as efficient as possible. However, Goldratt figured out that the factory as a whole could only run as fast as its slowest machine. By running machines at disparate production rates to full capacity, the manufacturer was, in fact, just creating work in process (WIP) and jamming up the factory shop floor.
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One simple example in Goldratt’s book, The Goal, involves a Boy Scouts’ hiking trip. If everyone is going to stay together, the troop can only walk as fast as its slowest scout. By offloading the slowest scout’s backpack to the fastest kid, Goldratt simultaneously increased the speed of the slowest hiker and decreased the speed of the fastest hiker. As a unit, the troop moved more quickly, even though the fastest hikers were not walking as fast as they could.
By increasing the production rate of the slowest machine in the factory, you increase the manufacturing capacity of the entire factory. One of the most elegant aspects of TOC is that with each bottleneck or constraint you find and resolve in the system, you discover a new one. The inefficiency you resolved unveils an inefficiency that was, heretofore, unnoticed. It is a process of continuous improvement, where fun and profit is found in discovering and resolving problems.