Goal by Eliyahu Goldratt Term Paper

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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)Buy full Download Microsoft Word File paper
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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.

Term Paper on Goal by Eliyahu Goldratt Assignment

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… [END OF PREVIEW] . . . READ MORE

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