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Happy Days are Around the Corner
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It has been nearly a decade since I have been able to write a newsletter addressing folks needing capacity.  However, for the most part, that is where most people find themselves today.  The decline in manufacturing has lasted longer than a decade.


During the bad times people try to “save themselves” into prosperity.   Businesses are not in business to save money – they are in business to make money. 


Enough negative thinking.  Let’s get excited about your challenges moving forward. 


In our two-day workshop on synchronous flow there is a section where we address the reality that all organizations/systems have a constraint at any point in time.  The constraint will either be in the market (meaning we have more capacity than the market will take), it is internal (meaning we cannot get all our orders out on time) or it is in the vendor base (meaning our suppliers cannot get the raw materials fast enough for us to make our orders on time). 


By the way, if you are not a manufacturing company do not go to sleep on me – all of this stuff applies to you also.   We see these issues in churches.   


The next question for the attendees of the workshop is “where would you like for the constraint to be located,” and we give them the three choices


1. In the Market

2. Internal

3. In the supplier base


The vast majority of people select “internal” and they justify their answer by saying; “we want it where we can control it.” 


We normally do not tell them this is the wrong answer so we ask more questions such as, “if your constraint is internal that means you have no capacity to take an additional order.  What happens if your sales department gets lucky and sells a new customer?  How are you going to supply it?”


There is normally some pause on that one and they realize that they need to have the capacity to consume opportunity and to maintain a stable environment.  Organizations that have strained capacity are themselves strained and lack stability (good statement to ponder).


This is going to be a three or four part series on the great issue of how to bring on and manage capacity to do work.  I also plan to keep these as short as possible and recommend some next steps.


My recommended next step on this newsletter is to purchase a copy of The Goal and read it. 


Twenty years ago when I asked how many people had read The Goal every hand in the place went up.  It was required reading in many business schools.  Today when I ask the question the only hands that go up are those people over 50 years old.  The author is Dr. Eli Goldratt.  The book is an easy read as it is in the form of a novel.  Trust me on this – get your copy today.  You will enjoy the book and it will stretch your thinking in a good way.


If you are in a book buying mode we have some great ones on our website that are educational and most people tell us they are funny and enjoyable.  Go to www.chesapeakeconsultinginc.com.


See you in two weeks with our first discussion on hiring (one of the ways to increase capacity).

 

John Covington




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