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Happy Days, Part 2
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Your homework assignment from the last newsletter was to read Eli Goldratt's book The Goal

Since the last newsletter news broke that unemployment is the lowest and the number of people working is the highest in my home state of Alabama since 2008. So our topic is on point.

The issue we are addressing in this series is the need to increase internal capacity so you can:
  • Meet your due-date commitments.
  • Keep your lead-times competitive.
  • Maintain a stable work environment. Facilities that are strained on capacity are unstable and in many cases not as safe as they could be. In humans we call strained capacity "nervous breakdown."

There are several ways people increase capacity:
  1. They hire new people.
  2. They train the ones they have to perform better or to be cross functional.
  3. Purchase equipment.
  4. Off load or outsource.
  5. Get more out of what they already have.
In this newsletter we will address #5 - how you get more out of what you already have. For those of you that actually embraced my recommendation and read or re-read The Goal you already have a sense. Regardless of complexity all organizational systems at a single point in time have one limiting factor that determines their output. Let's call that a constraint and not get into some word-smithing mess. That constraint determines the absolute most your organization can achieve at this time. There are volumes of books and lectures on different types of constraints, how to find them or how to strategically place them. I want to keep this series as simple as I can. However if you have additional questions please contact me and we can talk some more. 

For the purpose of this newsletter let's say your organizational constraint is a machine work center. There are several things that machining unit can be doing:
  • Producing product at the designed rate or demonstrated max.
  • Producing product at less than the designed rate of max.
  • Not producing.
There are several reasons why the machine is not producing:
  • It is starved of raw materials.
  • There is no operator at the machine.
  • It is blocked by the machines downstream and has nowhere to go with the product. 
  • It is changing over to a new product.
  • It is shut down for planned maintenance.
  • It is shut down because of unplanned maintenance.
You should have some sort of materials buffer in front of the machine (to eliminate starved because of raw materials) and you should have a space buffer downstream of the machine (to eliminate blockage).

Keeping data on the six issues that can keep the machine from producing is a great first step in getting more out of what you already have. 

In my book Enterprise Fitness I discuss some of the things one needs to do in a manufacturing operation. You can get a copy from our website www.chesapeakeconsultinginc.com. 

John




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