The Goal: A Process of Ongoing Improvement (11 page)

But Julie does not understand.
"Thanks for the advance notice,’’ she says.
"If I’d known earlier, I’d have told you,’’ I say. "Everything is unexpected with you lately,’’ she says. "Don’t I always tell you when I know I’ve got trips coming up?’’

She fidgets next to the bedroom door. I’m packing an overnight bag which lies open on the bed. We’re alone; Sharon is down the street at a friend’s house, and Davey is at band practice.
"When is this going to end?’’ she asks.

I stop midway through taking some underwear from a drawer. I’m getting irritated by the questions because we just went over the whole thing five minutes ago. Why is it so hard for her to understand?

"Julie, I don’t know.’’ I say. "I’ve got a lot of problems to solve.’’
More fidgeting. She doesn’t like it. It occurs to me that maybe she doesn’t trust me or something.
"Hey, I’ll call you as soon as I get to New York,’’ I tell her. "Okay?’’
She turns as if she might walk out of the room.
"Fine. Call,’’ she says, "but I might not be here.’’
I stop again.
"What do you mean by that?’’
"I might be out someplace,’’ she says.
"Oh,’’ I say. "Well, I guess I’ll have to take my chances.’’
"I guess you will,’’ she says, furious now, on her way out the door.
I grab an extra shirt and slam the drawer shut. When I finish packing, I go looking for her. I find her in the living room. She stands by the window, biting the end of her thumb. I take her hand and kiss the thumb. Then I try to hug her.
"Listen, I know I’ve been undependable lately,’’ I say. "But this is important. It’s for the plant—’’
She shakes her head, pulls away. I follow her into the kitchen. She stands with her back to me.
"Everything is for your job,’’ she says. "It’s all you think about. I can’t even count on you for dinner. And the kids are asking me why you’re like this—’’
There is a tear forming in the corner of her eye. I reach to wipe it away, but she brushes my hand aside.
"No!’’ she says. "Just go catch your plane to wherever it is you’re going.’’
"Julie—’’
She walks past me.
"Julie, this is not fair!’’ I yell at her.
She turns to me.
"That’s right,’’ she says.
"You
are not being fair. To me or to your children.’’
She goes upstairs without looking back. And I don’t even have time to settle this; I’m already late for my flight, I pick up my bag in the hall, sling it over my shoulder, and grab my briefcase on my way out the door.

At 7:10 the next morning, I’m waiting in the hotel lobby for Jonah. He’s a few minutes late, but that’s not what’s on my mind as I pace the carpeted floor. I’m thinking about Julie. I’m worried about her... about us. After I checked into my room last night, I tried to call home. No answer. Not even one of the kids picked up the phone. I walked around the room for half an hour, kicked a few things, and tried calling again. Still no answer. From then until two in the morning, I dialed the number every fifteen minutes. Nobody home. At one point I tried the airlines to see if I could get on a plane back, but nothing was flying in that direction at that hour. I finally fell asleep. My wake-up call got me out of bed at six o’clock. I tried the number twice before I left my room this morning. The second time, I let it ring for five minutes. Still no answer.
"Alex!’’

I turn. Jonah is walking toward me. He’s wearing a white shirt—no tie, no jacket—and plain trousers.
"Good morning,’’ I say as we shake hands. I notice his eyes are puffy, like those of someone who hasn’t had a lot of sleep; I think that mine probably look the same.
"Sorry I’m late,’’ he says. "I had dinner last night with some associates and we got into a discussion which went, I believe, until three o’clock in the morning. Let’s get a table for breakfast.’’
I walk with him into the restaurant and the maitre d’ leads us to a table with a white linen cloth.
"How did you do with the measurements I defined for you over the telephone?’’ he asks after we’ve sat down.
I switch my mind to business, and tell him how I expressed the goal with his measurements. Jonah seemed very pleased.
"Excellent,’’ he says. "You have done very well.’’
"Well, thanks, but I’m afraid I need more than a goal and some measurements to save my plant.’’
"To save your plant?’’ he asks.
I say, "Well... yes, that’s why I’m here. I mean, I didn’t just call you to talk philosophy.’’
He smiles. "No, I didn’t think you tracked me down purely for the love of truth. Okay, Alex, tell me what’s going on.’’
"This is confidential,’’ I say to him. Then I explain the situation with the plant and the three-month deadline before it gets closed. Jonah listens attentively. When I’ve finished, he sits back.
"What do you expect from me?’’ he asks.
"I don’t know if there is one, but I’d like you to help me find the answer that will let me keep my plant alive and my people working,’’ I say.
Jonah looks away for a moment.
"I’ll tell you
my
problem,’’ he says. "I have an unbelievable schedule. That’s why we’re meeting at this ungodly hour, incidentally. With the commitments I already have, there is no way I can spend the time to do all the things you probably would expect from a consultant.’’
I sigh, very disappointed. I say, "Okay, if you’re too busy—’’
"Wait, I’m not finished,’’ he says. "That doesn’t mean you can’t save your plant. I don’t have time to solve your problems for you. But that wouldn’t be the best thing for you anyway—’’
"What do you mean?’’ I interrupt.
Jonah holds up his hands. "Let me finish!’’ he says. "From what I’ve heard, I think you can solve your own problems. What I will do is give you some basic rules to apply. If you and your people follow them intelligently, I think you will save your plant. Fair enough?’’
"But, Jonah, we’ve only got three months,’’ I say.
He nods impatiently. "I know, I know,’’ he says. "Three months is more than enough time to show improvement ...if you are diligent, that is. And if you aren’t, then nothing I say could save you anyway.’’
"Oh, you can count on our diligence, for sure,’’ I say.
"Shall we try it then?’’ he asks.
"Frankly, I don’t know what else to do,’’ I say. Then I smile. "I guess I’d better ask what this is going to cost me. Do you have some kind of standard rate or something?’’
"No, I don’t,’’ he says. "But I’ll make a deal with you. Just pay me the value of what you learn from me.’’
"How will I know what that is?’’
"You should have a reasonable idea after we’ve finished. If your plant folds, then obviously the value of your learning won’t have been much; you won’t owe me anything. If, on the other hand, you learn enough from me to make billions, then you should pay me accordingly,’’ he says.
I laugh. What have I got to lose?
"Okay, fair enough,’’ I say finally.
We shake hands across the table.
A waiter interrupts to ask if we’re ready to order. Neither of us have opened the menus, but it turns out we both want coffee. The waiter informs us there’s a
ten
-dollar minimum for sitting in the dining room. So Jonah tells him to bring us both our own pots of coffee and a quart of milk. He gives us a dirty look and vanishes.
"Now then,’’ Jonah says. "Where shall we begin . . .’’
"I thought maybe first we could focus on the robots,’’ I tell him.
Jonah shakes his head.
"Alex, forget about your robots for now. They’re like some new industrial toy everybody’s discovered. You’ve got much more fundamental things to concern yourself with,’’ he says.
"But you’re not taking into account how important they are to us,’’ I tell him. "They’re some of our most expensive equipment. We absolutely have to keep them productive.’’
"Productive with respect to what?’’ he asks with an edge in his voice.
"Okay, right...we have to keep them productive in terms of the goal,’’ I say. "But I need high efficiencies to make those things pay for themselves, and I only get the efficiencies if they’re making parts.’’
Jonah is shaking his head again.
"Alex, you told me in our first meeting that your plant has very good efficiencies overall. If your efficiencies are so good, then why is your plant in trouble?’’
He takes a cigar out of his shirt pocket and bites the end off of it.
"Okay, look, I have to care about efficiencies if only for the reason that my management cares about them,’’ I tell him.
"What’s more important to your management, Alex: efficiencies or money?’’ he asks.
"Money, of course. But isn’t high efficiency essential to making money?’’ I ask him.
"Most of the time, your struggle for high efficiencies is taking you in the opposite direction of your goal.’’
"I don’t understand,’’ I say. "And even if I did, my management wouldn’t.’’
But Jonah lights his cigar and says between puffs, "Okay, let’s see if I can help you understand with some basic questions and answers. First tell me this: when you see one of your workers standing idle with nothing to do, is that good or bad for the company?’’
"It’s bad, of course,’’ I say.
"Always?’’
I feel this is a trick question.
"Well, we have to do maintenance—’’
"No, no, no, I’m talking about a production employee who is idle because there is no product to be worked on.’’
"Yes, that’s always bad,’’ I say.
"Why?’’
I chuckle. "Isn’t it obvious? Because it’s a waste of money! What are we supposed to do, pay people to do nothing? We can’t afford to have idle time. Our costs are too high to tolerate it. It’s inefficiency, it’s low productivity—no matter how you measure it.’’
He leans forward as if he’s going to whisper a big secret to me.
"Let me tell you something,’’ he says. "A plant in which everyone is working all the time is very inefficient.’’
"Pardon me?’’
"You heard me.’’
"But how can you prove that?’’ I ask.
He says, "You’ve already proven it in your own plant. It’s right in front of your eyes. But you don’t see it.’’
Now I shake my head. I say, "Jonah, I don’t think we’re communicating. You see, in my plant, I don’t have extra people. The only way we can get products out the door is to keep everyone working constantly.’’
"Tell me, Alex, do you have excess inventories in your plant?’’ he asks.
"Yes, we do,’’ I say.
"Do you have a lot of excess inventories?’’
"Well... yes.’’
"Do you have
a lot
of a lot of excess inventories?’’
"Yeah, okay, we do have a lot of a lot of excess, but what’s the point?’’
"Do you realize that the only way you can create excess inventories is by having excess manpower?’’ he says.
I think about it. After a minute, I have to conclude he’s right; machines don’t set up and run themselves. People had to create the excess inventory.
"What are you suggesting I do?’’ I ask. "Lay off more people? I’m practically down to a skeleton force now.’’
"No, I’m not suggesting that you lay off more people. But I am suggesting that you question how you are managing the capacity of your plant. And let me tell you, it is not according to the goal.’’
Between us, the waiter sets down two elegant silver pots with steam coming out of their spouts. He puts out a pitcher of cream and pours the coffee. While he does this, I find myself staring toward the window. After a few seconds, I feel Jonah reach over and touch my sleeve.
"Here’s what’s happening,’’ he says. "Out there in the world at large, you’ve got a market demand for so much of whatever it is you’re producing. And inside your company, you’ve got so many resources, each of which has so much capacity, to fill that demand. Now, before I go on, do you know what I mean by a ‘balanced plant’?’’
"You mean balancing a production line?’’ I ask.
He says, "A balanced plant is essentially what every manufacturing manager in the whole western world has struggled to achieve. It’s a plant where the capacity of each and every resource is balanced exactly with demand from the market. Do you know why managers try to do this?’’
I tell him, "Well, because if we don’t have enough capacity, we’re cheating ourselves out of potential throughput. And if we have more than enough capacity, we’re wasting money. We’re missing an opportunity to reduce operational expense.’’
"Yes, that’s exactly what everybody thinks,’’ says Jonah. "And the tendency for most managers is to trim capacity wherever they can, so no resource is idle, and everybody has something to work on.’’
"Yeah, sure, I know what you’re talking about,’’ I say. "We do that at our plant. In fact, it’s done at every plant I’ve ever seen.’’
"Do you run a balanced plant?’’ he asks.
"Well, it’s as balanced as we can make it. Of course, we’ve got some machines sitting idle, but generally that’s just outdated equipment. As for people, we’ve trimmed our capacity as much as we can,’’ I explain. "But nobody ever runs a perfectly balanced plant.’’
"Funny, I don’t know of any balanced plants either,’’ he says. "Why do you think it is that nobody after all this time and effort has ever succeeded in running a balanced plant?’’
"I can give you a lot of reasons. The number one reason is that conditions are always changing on us,’’ I say.
"No, actually that isn’t the number one reason,’’ he says.
"Sure it is! Look at the things I have to contend with—my vendors, for example. We’ll be in the middle of a hot order and discover that the vendor sent us a bad batch of parts. Or look at all the variables in my work force—absenteeism, people who don’t care about quality, employee turnover, you name it. And then there’s the market itself. The market is always changing. So it’s no wonder we get too much capacity in one area and not enough in another.’’
"Alex, the real reason you cannot balance your plant is much more basic than all of those factors you mentioned. All of those are relatively minor.’’
"Minor?’’
"The real reason is that the closer you come to a balanced plant, the closer you are to bankruptcy.’’
"Come on!’’ I say. "You’ve got to be kidding me.’’
"Look at this obsession with trimming capacity in terms of the goal,’’ he says. "When you lay off people, do you increase sales?’’
"No, of course not,’’ I say.
"Do you reduce your inventory?’’ he asks.
"No, not by cutting people,’’ I say. "What we do by laying off workers is cut our expenses.’’
"Yes, exactly,’’ Jonah says. "You improve only one measurement, operational expense.’’
"Isn’t that enough?’’
"Alex, the goal is not to reduce operational expense by itself. The goal is not to improve one measurement in isolation. The goal is to reduce operational expense and reduce inventory while simultaneously increasing throughput,’’ says Jonah.
"Fine. I agree with that,’’ I say. "But if we reduce expenses, and inventory and throughput stay the same, aren’t we better off?’’
"Yes,
if
you do not increase inventory and/or reduce throughput,’’ he says.
"Okay, right. But balancing capacity doesn’t affect either one,’’ I say.
"Oh? It doesn’t? How do you know that?’’
"We just said—’’
"I didn’t say anything of the sort. I asked you. And you
assumed
that if you trim capacity to balance with market demand you won’t affect throughput or inventory,’’ he says. "But, in fact, that assumption—which is practically universal in the western business world—is totally wrong.’’
"How do you know it’s wrong?’’
"For one thing, there is a mathematical proof which could clearly show that when capacity is trimmed exactly to marketing demands, no more and no less, throughput goes down, while inventory goes through the roof,’’ he says. "And because inventory goes up, the
carrying cost
of inventory—which is operational expense—goes up. So it’s questionable whether you can even fulfill the intended reduction in your total operational expense, the one measurement you expected to improve.’’
"How can that be?’’
"Because of the combinations of two phenomena which are found in every plant,’’ he says. "One phenomenon is called ‘dependent events.’ Do you know what I mean by that term? I mean that an event, or a series of events, must take place before another can begin... the subsequent event
depends
upon the ones prior to it. You follow?’’
"Yeah, sure,’’ I say. "But what’s the big deal about that?’’ "The big deal occurs when dependent events are in combination with another phenomenon called ‘statistical fluctuations,’’’ he says. "Do you know what those are?’’
I shrug. "Fluctuations in statistics, right?’’
"Let me put it this way,’’ he says. "You know that some types of information can be determined precisely. For instance, if we need to know the seating capacity in this restaurant, we can determine it precisely by counting the number of chairs at each table.’’
He points around the room.
"But there are other kinds of information we cannot precisely predict. Like how long it will take the waiter to bring us our check. Or how long it will take the chef to make an omelet. Or how many eggs the kitchen will need today. These types of information vary from one instance to the next. They are subject to
statistical fluctuations.’’
"Yeah, but you can generally get an idea of what all those are going to be based on experience,’’ I say.
"But only within a range. Last time, the waiter brought the check in five minutes and 42 seconds. The time before it only took two minutes. And today? Who knows? Could be three, four hours,’’ he says, looking around. "Where the hell is he?’’ "Yeah, but if the chef is doing a banquet and he knows how many people are coming and he knows they’re all having omelets, then he knows how many eggs he’s going to need,’’ I say. "Exactly?’’ asks Jonah. "Suppose he drops one on the floor?’’ "Okay, so he has a couple extra.’’
"Most of the factors critical to running your plant successfully cannot be determined precisely ahead of time,’’ he says. The arm of the waiter comes between us as he puts the totaled check on the table. I pull it to my side of the table. "All right, I agree,’’ I say. "But in the case of a worker doing the same job day in, day out, those fluctuations average out over a period of time. Frankly, I can’t see what either one of those two phenomena have to do with anything.’’