I first read The Goal: A Process of Ongoing Improvement when I actively became involved in process improvement.  I was bit late to the party; however since my first read of this business novel, a copy has always graced my bookshelf.  The Goal uses the story of Alex Rogo, plant manager, to illustrate the theory of constraints and how the wrong measurement focus can harm an organization. The focus of the re-read is less on the story, but rather on the ideas that have shaped lean thinking. Even though set in a manufacturing plant the ideas are useful in understanding how all projects and products can be delivered more effectively.  Earlier entries in this re-read are:

Part 1                Part 2                  Part 3                      Part 4                Part 5           Part 6             Part 7


Chapter 21: This chapter is bookended by Alex’s martial travails. The chapter opens with Alex making a date with Julie (Alex’s wife). I remember the first time I read the book being worried about Alex’s ability to set a date and time and meet it . . . heck, his plant can’t meet dates.

When Alex’s team identifies the late orders (which was easy), they find that the majority of the late orders are processed through one or both of the bottleneck steps. Some people conceive of manufacturing sector as a set of assembly lines in which the process seldom, if ever, varies. The description of the manufacturing in The Goal is much more akin to a job shop in which the process steps vary depending on the job. This is VERY similar to much of the work done in software development, enhancement and maintenance. If you surface read The Goal you might not see the applicability to software development or other business processes because of this false impression.

Alex tasks his team to ensure that the work following through the bottlenecks is focused on the critical orders. The team sets out to implement the initial wave of changes they discussed with Johan. As with any change the unless specifically addressed those asked to change do not automatically understand why which casues resistance. The Goal uses two situations to push the ideas of communication and transparency as a change management tool. The first occurs when Alex finds the NCX-10 is not running. The inventory for the next critical order is not at the machine therefore the operator is waiting. The material is at an earlier stage. The operator did not recognize the material as being important, therefore opted to follow standard operating procedure. This scenario generates one of the best lines in the book, “if you have to break the rules to do the right thing, maybe the rules are not the right rules.” Similarly, the union head immediately pushed back when asked to change the work rules needed to keep the NCX-10 running during lunch and breaks. Alex recognizes that everyone needs to see the big picture and needs a signal to know which work behavior is needed. Based on these two issues, Alex immediately implements two changes. The first is a   signal card (red tag) to indicate priority orders (very similar to Kanban), and second Alex and his staff begin briefing EVERYONE in the plant (transparency, one of the pillars of Scrum) on the the impact of the changes they were being asked to make. The transparency of the management team about reason the plant was being asked to change helped sway the union.  After Alex personally address everyone in the plant in small meetings the union agreed to the work rule changes and the other changes begin to take hold.

Alex’s date with Julie? In the end Alex showed up on time and they went for the date.

Chapter 22: Alex reviews the progress with his team. The situation has improved by ensuring that the priority orders move through the bottlenecks first and moving quality control to before the both of the bottlenecks. Before the changes the latest order was 58 days behind, now the latest order was only 44 days behind. The problem as Alex sees it, it is not enough.  Goldratt speaking though Alex says, “a few weeks ago we were limping along; now we’re walking but we ought to jogging.”  The changes generated some progress, but not enough. Alex pushes Donavan to address the other ideas that they had addressed with Johan, These included outsourcing some of the processing through the bottlenecks to generate capacity.

As they use the signaling system (red card = a critical order), they begin to discover problems. For example, parts that are queued for processing through the bottleneck steps are not easily distinguishable before and after the process, risking mistakes.  A yellow flag is added to the red card to signal processing is complete (the changes to the process is a reflection of an attitude of continuous process improvement). Alex points out that he does not want stop gap measures and is assured that his team will get to the bottom of the problem, fix the process and re-train the staff (dealing with the deeper issue is a reflection of a culture where root-cause analysis is performed so that problems aren’t just glossed over). The tweaks to the process improve throughput, but don’t generate the quantum change the plant needs.

The chapter ends with Donavon, who has been missing in action, who shows up with the old machines of type that the NCX-10 replaced. Even though, as they put it, the machines he had scavenged from another plan were “state of the art circa 1942”, but they provided extra capacity for the bottlenecked NCX-10. The added capacity, when implemented, will increase the capacity of the bottlenecked step. Remember the overall process capacity is directly governed by the capacity of the bottleneck.

I was talking recently with a Scrum team that included a product owner, coach, 4 coders and one tester. The tester was the only person allowed to test. It had been six months since the team was consistently able to complete a story during the sprint it was accepted in. They wondered if increasing the sprint duration from one week to three would solve their consistency problem. We built a Kanban board to visualize the flow of work through the team. Once the board was built it was immediately apparent that the bottleneck was the single tester. The question I left them to wrestle with was whether the answer would be to reduce the number of coders (implement work-in-progress limits) or to increase the number of testers (add capacity). This is a real life example of how the ideas and concepts expressed in The Goal are just relevant in the world of software development as they are in manufacturing.

Summary of The Goal so far:

Chapters 1 through 3 actively present the reader with a burning platform. The plant and division are failing. Alex Rogo has actively pursued increased efficiency and automation to generate cost reductions, however performance is falling even further behind and fear has become central feature in the corporate culture.

Chapters 4 through 6 shift the focus from steps in the process to the process as a whole. Chapters 4 – 6 move us down the path of identifying the ultimate goal of the organization (in this book). The goal is making money and embracing the big picture of systems thinking. In this section, the authors point out that we are often caught up with pursuing interim goals, such as quality, efficiency or even employment, to the exclusion of the of the ultimate goal. We are reminded by the burning platform identified in the first few pages of the book, the impending closure of the plant and perhaps the division, which in the long run an organization must make progress towards their ultimate goal, or they won’t exist.

Chapters 7 through 9 show Alex’s commitment to change, seeks more precise advice from Johan, brings his closest reports into the discussion and begins a dialog with his wife (remember this is a novel). In this section of the book the concept “that you get what you measure” is addressed. In this section of the book, we see measures of efficiency being used at the level of part production, but not at the level of whole orders or even sales. We discover the corollary to the adage ‘you get what you measure’ is that if you measure the wrong thing …you get the wrong thing. We begin to see Alex’s urgency and commitment to make a change.

Chapters 10 through 12 mark a turning point in the book. Alex has embraced a more systems view of the plant and that the measures that have been used to date are more focused on optimizing parts of the process to the detriment to overall goal of the plant.  What has not fallen into place is how to take that new knowledge and change how the plant works. The introduction of the concepts of dependent events and statistical variation begin the shift the conceptual understanding of what measure towards how the management team can actually use that information.

Chapters 13 through 16 drive home the point that dependent events and statistical variation impact the performance of the overall system. In order for the overall process to be more effective you have to understand the capability and capacity of each step and then take a systems view. These chapters establish the concepts of bottlenecks and constraints without directly naming them and that focusing on local optimums causes more trouble than benefit.

Chapters 17 through 18 introduces the concept of bottlenecked resources. The affect of the combination dependent events and statistical variability through bottlenecked resources makes delivery unpredictable and substantially more costly. The variability in flow through the process exposes bottlenecks that limit our ability to catch up, making projects and products late or worse generating technical debt when corners are cut in order to make the date or budget.

Chapters 19 through 20 begins with Johan coaching Alex’s team to help them to identify a  pallet of possible solutions. They discover that every time the capacity of a bottleneck is increased more product can be shipped.  Changing the capacity of a bottleneck includes reducing down time and the the amount of waste the process generates. The impact of a bottleneck is not the cost of individual part, but the cost of the whole product that cannot be shipped. Instead of waiting to make all of the changes Alex and his team implement changes incrementally rather than waiting until they can deliver all of the changes.

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