In the most recent segment of The Goal: A Process of Ongoing Improvement, the protagonist, Alex Rogo, struggles to apply Jonah's equation to the issues in his UniCo manufacturing plant. To recap, Jonah is an old acquaintance who is advising Alex on the issues with his failing plant. Alex's plant is in danger of closing within three months if he does not make several serious improvements. The issue is in identifying what needs to be changed to bring about those improvements. Jonah has Alex ponder the goal of a business, which is ultimately to make money. In order to do this, Jonah claims that the plant must increase throughput while simultaneously decreasing both inventories and operational expense. In this equation, throughput is the rate at which the system generates sales, inventories are the money the plant invests to purchase things it plans to sell, and operational expense is the money the company invests to turn inventory into throughput. Now, Alex must determine how to make all three changes occur simultaneously within his plant.
Alex spends much time brainstorming how he can increase throughput while decreasing inventory and operational expense, but has difficulty at first. One problem he encounters is that in order to make some of those changes occur, he may lower his efficiencies, which would upset his boss, Bill Peach, and further threaten the existence of the plant. To get more advice, Alex flies to New York to discuss the problem with Jonah. Jonah discusses the myth of a balanced plant with Alex, who believes that the plant may need to balance capacity with market demand. However, this would raise inventory and carrying costs through the roof and ultimately lead to bankruptcy. Jonah now describes dependent events and statistical fluctuations, which are events that depend on other events to occur, and variances from one event to the next, respectively. He leaves Alex to ponder the dependent events and statistical fluctuations within the plant.
Alex is baffled and doesn't know where to start. It isn't until he is asked to lead his son's boy scout troop on a ten mile hike that he gets ideas. During the hike, large distances constantly appear between the boys. Alex tries to figure out a way to prevent the gaps in the line from occurring, but struggles to do so and decides to observes from the back of the line. During the hike, he realizes that if one boy moves slower, that causes everyone behind him to move slower. If another person moves slower, that hold the rest back as well. Essentially, no one can move faster than the person in front of them. Each hiker's speed is an event dependent on the speed of the hiker in front of him. The speed and any pauses are statistical fluctuations.
There is one boy in particular, Herbie, who is overweight and out of shape. Herbie moves much slower than the other boys and holds back those ahead of him. He runs to keep up with the boy in front of him. Still, gaps continue to appear. After a while, the boys rearrange themselves to a position that they find optimal. The fastest hiker is in the front, and Herbie is at the end with Alex. At this point, the gaps are even worse. The troop is already behind schedule and Alex must find a way to finish the hike on time. He recognizes that the line is only as fast as it's slowest member because the hike is not complete until it's last member has completed it. He decides to test an idea and moves Herbie to the front of the line to lead to troop. The group realizes that Herbie has a massive backpack and distributes the items in the bag throughout the group to lighten Herbie's load. Herbie is able to move at a brisk pace, and the other boys can keep up with him and stay condensed. They manage to finish their remaining hike in an optimal time after this change.
Alex is able to take the lesson he learned on the hike and apply it to his plant. He decides that he must find the "Herbies" in his plant, or the machines that are bogged down and holding up work-in-progress. While searching though the plant, Alex and his group find that there are two essential machines that are slowing down progress. While searching for these machines, the group realizes that most of their data on the machines in the plant are very outdated and not useful. They also cannot think of alternatives to the two machines, or how to alleviate and redistribute the workload from those two machines that are so vital to the processes that go on in the plant.
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