Production the TOC Way with Simulator, Revised by Eliyahu M. Goldratt

Author:Eliyahu M. Goldratt [Goldratt, Eliyahu M.]
Language: eng
Format: azw3
Published: 2006-12-31T16:00:00+00:00

Now to the conflict. Statement D: "Managers try to manage according to the cost-world," is a necessary condition for B; in order for managers to try to control cost they must try to manage according to the cost-world. while statement D': "Managers try to manage according to the throughput-world," is a necessary condition for C; in order for managers to try to protect throughput they must try to manage according to the throughput-world

Which is the arrow we feel less confident about? Which of the necessary conditions are you willing to challenge? If you are like me, it's the arrow, "trying to manage according to the cost-world is a necessary condition for cost control." Let's examine the assumption underlying this arrow.

The claim is that in order for managers to try to control cost they must try to manage according to the cost-world. Why? Because we assume that the only way to reach good cost performance is through good local performance everywhere. Is the assumption correct?

Let's view our experience with the simulator. The difference between our first run of the simulator and our second run was that in the second run we strived for higher performance on each resource; we wanted higher efficiencies. No other differences. The resources were the same, products and tasks the same, everything the same. It's like having two identical twin plants, where in one we try harder to achieve good local performance. What an opportunity to check the validity of our assumption.

Examine the results you wrote of the first run and those of the second run, the one with the high efficiencies. Now answer the following questions:

1. Which plant shipped more finished products to the market - first run or second run?

[If you ran the second plant like the vast majority of managers, then towards the end of the week when you needed the cyan resources and the magenta resources to concentrate on finishing the orders for this week, they were busy fiddling around with the inventory you released for efficiency reasons. No wonder that in the second plant you probably missed more shipments. Think about it, this phenomenon must exist, and not just on the simulator. In real operations pre-release of work messes up the priorities to the point that even on resources which are not bottlenecks we have hot, red-hot and do-it-now jobs.]

2. In which plant were the resources more loaded - the first run or second run?

[The same thing will happen in the real world. Relatively high loads are to be expected for a real world operation if it operates under the efficiency syndrome. Even when there are not enough orders, we can almost always produce to forecast. And if pressured, workers and foremen can usually "massage" the numbers.]

In light of the above answers:

3. In which plant is there more pressure to hire/buy more resources?

[And in real organizations? If you ship everything on-time and the efficiencies of your resources are low, what chance do you have to convince headquarters to authorize the hiring of

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