This is a report on the goal:
The goal of a firm is to make money. Everything done in the firm must be in pursuit of this goal. The firm can be thought of as a system.
Throughput is the rate at which said system makes money through sales (not production – if something is produced but not sold, it should not count as throughput).
Inventory is all the money that the system invested in purchasing the products it intends to sell.
Operational expense is all the money that the system spends to turn inventory into throughput.
Alternatively expressed, the goal is to increase throughput while simultaneously reducing both inventory and operational expense.
A series of dependent events is one in ...view middle of the document...
‘‘An hour lost at a bottleneck is an hour lost for the entire system. An hour saved at a non-bottleneck is a mirage.’’
It makes sense to place QC (quality control) in front of rather than after the bottleneck so the bottleneck’s work is never wasted. The cost of a bottleneck’s time is the total expense of the system, divided by the number of hours produced by the bottleneck.
There are only for possible process combinations: a non-bottleneck (Y) feeds to a bottleneck (X), a bottleneck (X) feeds to a non-bottleneck (Y), a non-bottleneck and a bottleneck feed products to an assembly process in parallel, and a bottleneck and a non-bottleneck produce unrelated products in parallel. (diagram on p 209)
Activating a resource and utilising a resource are not the same thing. Utilising a resource moves the system towards its goal. Activating it is busy-work that uses input whether or not it produces output that will move the system towards its goal.
‘‘A plant in which everybody is working all the time is very inefficient.’’
A part spends four types of time inside the plant.
Setup time, while the part is waiting for a resource to get ready to work on it
Process time, while the part gets processed and has value added to it
Queue time, while the part is waiting for a resource working on another task